Russian companies unable to pay for Chinese electronics

In late March, Chinese banks started blocking payments from Russian companies for electronic components, according to market participants. First problems arose back in December around purchasing finished products. Now it is also challenging to buy components for servers, data storage systems and laptops.

Pavel Lisitsyn / RIA Novosti

As a result, Russian manufacturers who ordered components from China have been unable to start the final assembly of their products in Russia. Market participants hope that the Central Bank will address the problem and negotiate payment terms with Chinese suppliers.

Experts note that Chinese banks are being careful because of potential secondary sanctions that the West may impose.

“Interestingly, it is yuan payments that don’t go through,” says Sergei Khestanov, economist and Associated Professor at the Russian Academy of National Economy and Public Administration (RANEPA). “It appears that the sanctions spiral has reached its new level.”  

Companies are seeking alternative payment options; however, this problem is causing delays in the production of Russian electronics by about six months, as there will be no shipments of components to any Russian manufacturers within the next two to three months.

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