The world thought that Russia and China were best friends being the two leading communist nations in the world. That may not be entirely correct as one of Russia's biggest banks grumbles that China has foregone doing business with them due to Western sanctions.
In a report by Wopular, the second largest lender in Russia, VTB Bank, said that majority of Chinese banks have ceased transacting with them following EU-US sanctions on Russia.
Yuri Soloviev, First Deputy Chairman of VTB Bank said that Chinese banks were not financing Russian trade, at least not through them. They also do not carry out interbank transactions and have considerably restricted their participation in Russia's trade deals.
It seemed that Chinese banks don't want to be deeply involved with the disagreement between western nations and Russia with regards to Russia's war in Crimea. After all, China has more business with the U.S. and Europe than with Russia.
China's unclear position and apparent reluctance to help Russian banks in the wake of US and EU sanctions is a major concern that can inhibit progress toward greater bilateral cooperation.
Russia's top banks Sberbank and VTB were sanctioned last year by the U.S. and European Union for Russia's unofficial support of a separatist uprising in eastern Ukraine. Since the sanctions began, Russia has been pressing its friendship with China to get through the rain. It may not have been peddling enough as China seemed diffident and unreliable.
In a related report of Forbes, economic indicators show that the recession in Russia will likely to get worse. Industrial production decreases by 5.5% and investment fell by 7.6% annually. While consumer demand improved moderately, real wages and retail sales actually fell by 7.3% and 9.2%, respectively.
While the Russian economy has effectively maintained their below consensus forecast of -4% GDP this year, the prospect for a recovery and better economy seemed far away especially with their supposedly best friend China is disobliging.