Shadow over ties: China’s Union Pay stops cooperation with Russian banks

Russian newspaper RBC reported last week that Chinese state-led financial services network UnionPay had suspended talks with Russian banks on issuing new bank cards to its customers, now resulting in the withdrawal of Visa and MasterCard. Unable to shop outside Russia. Due to Russia’s local Mir payment system, Russians can still use the card to make home purchases.

The payment processor is reportedly concerned about being the target of sanctions from the US and other countries if it works with approved Russian banks. May include importing goods or exporting goods, according to a report in leading business magazine Fortune.

UnionPay, launched in 2002, is a state-led financial services network operated by China’s central bank, the People’s Bank of China, and according to 2020 data from the Nielsen Report, the world’s second largest with 32% market share. Card brand.

According to a Fortune report, “UnionPay’s hesitation to enter the Russian market is the latest example of large Chinese companies being wary of doing business in Russia, despite the fact that China is not officially among Western leaders in sanctions on Russia.” Has happened.”

“China’s three major state-owned oil companies have reportedly been warned by Beijing to avoid making new investments in Russia, and last month, state-owned oil producer Sinopec sacked Sibur, the country’s largest petrochemical company. negotiations on a major joint venture with Russia were suspended,” Fortune reported.

“The Bank of China and the Industrial and Commercial Bank of China, China’s two largest lending banks, have also stopped offering finance options to customers for purchases of Russian goods,” Fortune quoted Bloomberg as saying.

According to Russian media outlet Izvestia, Huawei has suspended new orders for network equipment for Russian customers.