Rouble's fall disrupts Sino-Russian trade amid economic strain
Last week witnessed a dramatic decline in the rouble's exchange rate. The challenges faced by the Russian currency have prompted Chinese companies to suspend 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 reported, Wednesday's session on the Moscow stock exchange saw a significant collapse of the rouble. On that day, the yuan strengthened by 0.4961 points to a level of 14.9572 roubles, marking an increase of 3.43 per cent compared to Tuesday's close. This is the most substantial one-day weakening of the Russian currency against the yuan in many months.
Furthermore, the rouble's rate plummeted to its lowest position since the onset of the full-scale war in Ukraine, reaching 105 roubles per U.S. dollar.
The yuan's rate is particularly pivotal from Moscow's perspective. In June 2024, the Bank of Russia declared that the yuan to rouble exchange rate would set the course for other currency pairs. The Russian central bank observed 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 surpassed 54 per cent, establishing the Chinese currency as dominant in stock trading. Issues in the currency market have led "Chinese companies to begin suspending the sale of consumer goods in Russia."
Chinese alarm
Chinese companies engaged in online trading have already ceased operations. Entrepreneurs from China are reportedly troubled by the developments with the rouble.
"According to customs data, Russia imports goods from China worth $10–11 (€9.5-10.5) billion each month, twice as much as before the war. Over half of the goods purchased by Russians on e-commerce platforms originate from China, and the share of Chinese cars in the federation's automotive market has reached 70 per cent," notes "Rz".
It is reported that Chinese platforms are not receiving payments from Russian partners. This includes an anonymous entrepreneur from Shenzhen, who is awaiting payment for goods sold on the e-commerce platform Wildberries, known as the "Russian Amazon."
Andy Guo, the founder of the Waimaojia platform in Russia, confirms that the devaluation of the rouble "raises prices." This leads to Chinese companies suffering "serious losses," and currency fluctuations "eating up the margins of Chinese exporters after payment."
