While China and Russia have reduced dollar use in trade, payment challenges persist as Chinese banks navigate sanctions risks. This highlights the balancing act required to trade with Russia while maintaining access to the dollar-based financial system.

China and Russia have largely moved away from the US dollar in bilateral trade settlement, with most transactions now settled in their own currencies. Yet cross-border payment bottlenecks persist as Chinese banks carefully manage their exposure to Washington’s sanctions regime, according to a senior Russian banker. At the heart of the friction is a stark balancing act facing Chinese lenders: how to ease trade with Russia while safeguarding access to the US dollar-based global financial system –....