Ruble crisis strains Russia-China trade as exports falter
Last week saw a collapse in the ruble's exchange rate. Problems with the Russian currency have led Chinese companies to halt the export of certain goods. "The sharp depreciation of the Russian rouble ... have caused widespread concern among Chinese exporters, prompting many to suspend sales on Russian e-commerce platforms," writes South China Morning Post.
As we reported, Wednesday's session on the Moscow stock exchange brought a dramatic drop in the ruble. On that day, the yuan strengthened by 0.4961 points to reach 14.9572 rubles, representing a 3.43 percent increase compared to Tuesday's close. This marks the most significant one-day weakening of the Russian currency against the yuan in many months.
Additionally, the ruble's rate fell to its lowest level since the outbreak of the full-scale war in Ukraine, reaching 105 rubles per U.S. dollar.
The yuan's rate is particularly significant from Moscow's perspective. In June 2024, the Bank of Russia announced that the yuan to ruble exchange rate would set the trend for other currency pairs. The Russian central bank noted that the role of the U.S. dollar and the euro in the Russian market has consistently diminished over the past two years, which is the result of redirecting trade flows to the East.
In May, the yuan's share of trading on the Moscow stock exchange exceeded 54 percent, making the Chinese currency dominant in stock trading. Problems in the currency market led to "Chinese companies beginning to halt the sale of consumer goods in Russia."
Chinese alarm
Chinese companies trading online have already stopped trading. Entrepreneurs from China are reportedly worried about what's happening with the ruble.
"According to customs data, every month Russia imports goods from China worth approximately $10–11 (CAD 14-15.5) billion, which is twice as much as before the war. Over half of the goods purchased by Russians on e-commerce platforms come from China, and the share of Chinese cars in the federation's automotive market has reached 70 percent," notes "Rzeczpospolita."
Chinese platforms are reportedly not receiving money from Russian contractors. This is true for an anonymous entrepreneur from Shenzhen, who is waiting for payment for goods sold on the e-commerce platform Wildberries, known as the "Russian Amazon."
Andy Guo, who founded the Waimaojia platform in Russia, confirms that the devaluation of the ruble raises prices. This results in Chinese companies suffering "serious losses," and currency fluctuations "eating up the margins of Chinese exporters after payment."
