China has landed a huge economic blow on Russia following the invasion of Ukraine two days ago.

In what is seen as a restriction of support to Moscow, two Chinese banks owned by the state have halted lending to Russia.

Basically, the financing required for purchasing Russian commodities have been hampered. This will mean that Moscow’s long-running financial benefits from Beijing will stop.

Sources show that the Bank of China has limited the required funding as offshore units of its Industrial and Commercial branches will no longer issue U.S dollar-denominated letters of credit.

For selected clients, an approval from senior executives will be required for the use of letters of credit in Yuan denominations.

The move also comes as a global marvel since Russia and China have been geopolitical allies over the years; with both global powers working against the U.S in recent years. Russia is also a very major player in energy support to China.

Billions of Russian assets are also held by major banks in China—culminating in an increased level of funding to Moscow; in tens of billions.

Nonetheless, China will not effect any changes to normal trade regularities with Russia and Ukraine, amidst the restrictions from these banks.

The main goal for Beijing is to uphold their economic ties with other Western nations via its lucrative customer-exports over the years. These countries not only serve as technological and investment sources for China, they are also in control of the Asian giants access to the international dollar system.

China President Xi Jumping had urged Putin to negotiate a way out of the lingering crisis via a phone call on Friday.

“The situation in eastern Ukraine has undergone rapid changes, drawing great attention from the international community. China’s position would be based on the right and wrong in relation to the Ukraine issue itself,” Xi said.

“China supports Russia and Ukraine in resolving the issue through negotiation,” he added.

The news also adds to a number of severe sanctions Russia has suffered economically, after Putin ordered a full-scale invasion of the eastern Europe nation.

4 thoughts on “Ukraine Crisis: China Deals Huge Blow To Russia”
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