FirstFT: Chinese lenders extend exposure to Russian banks after western sanctions

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Good morning. Chinese language lenders stepped in to increase billions of {dollars} to Russian banks as western establishments retreated from the nation through the first 12 months of Moscow’s invasion of Ukraine.

The strikes by 4 of China’s greatest banks are a part of Beijing’s efforts to advertise the renminbi as a substitute world forex to the greenback.

China’s publicity to Russia’s banking sector quadrupled within the 14 months to the tip of March this 12 months, in line with the newest official information analysed for the Monetary Instances by the Kyiv Faculty of Economics. 

The lenders took the place of western banks, which got here beneath acute strain from regulators and politicians of their house international locations to exit Russia, whereas worldwide sanctions made doing enterprise a lot tougher.

“The loans by Chinese language banks to Russian banks and credit score establishments, that are for probably the most half a case of the yuan taking the place of {dollars} and euros, present the sanctions are doing their job,” stated Andrii Onopriienko, deputy growth director on the Kyiv Faculty of Economics, who compiled the info. Here’s more on Russia’s embrace of the renminbi.

Be a part of FT correspondents James Kynge, International China Editor; Eleanor Olcott, China Know-how Correspondent; Solar Yu, China Economics Reporter and skilled economist Tao Wang from UBS, for an unique FT subscriber occasion to evaluate the implications of China’s financial slowdown and its wrestle with deflation. Register at no cost here and submit your questions forward of the webinar here.

Right here’s what else I’m holding tabs on at the moment:

• Black Sea grain deal: Russia’s president Vladimir Putin is anticipated to fulfill his Turkish counterpart Recep Tayyip Erdoğan in Sochi to debate reviving the Black Sea deal that allowed Ukrainian grain to succeed in world markets. The assembly comes a day after Russia launched a massive drone attack on Ukraine’s southern Odesa port area, hitting grain delivery infrastructure on the river Danube.

• Holidays: Monetary markets shall be closed within the US (Labor Day) and Vietnam (Independence Day).

5 extra prime tales

1. An investigation in South Africa has rejected a US allegation that the nation equipped weapons to a Russian ship beneath US sanctions that was docked at a Cape City naval base. President Cyril Ramaphosa stated the inquiry “discovered that there was no proof to assist the declare” from the US ambassador to Pretoria earlier this 12 months. The declare got here after rising frustration in Washington over South Africa’s ties to Russia.

2. China is constructing battery crops far past ranges wanted to fulfill home demand for electrical vehicles and grid vitality storage. Battery producers are following a sample exhibited in different industries akin to metal and photo voltaic panels, business govt warned, the place Chinese language firms profit from subsidies to take an enormous share of the worldwide market and squeeze out competitors internationally. “We’re fearful,” stated Olivier Dufour, co-founder of Verkor, a French battery start-up backed by Renault. Read the full story.

• Extra China information: China’s slowing progress is sparking warnings of contagion in Asia, as waning client demand and slower manufacturing hit the area.

3. Terry Gou, the billionaire founding father of Apple provider Foxconn, has left the corporate’s board following his resolution to run to be Taiwan’s subsequent president. The transfer appeared aimed toward shielding the world’s largest contract electronics producer from any political fallout from his marketing campaign for the election on January 13. Here’s more on Gou’s future with Foxconn as he pursues Taiwan’s presidency.

4. A whole bunch of protesters gathered in southern Syria this weekend calling for President Bashar al-Assad’s removing as, as demonstrations that erupted over the nation’s financial disaster entered their third week. Crowds chanted “Bashar, we don’t need you!” and “Come on, depart oh Bashar”, resurrecting one of many 2011 uprisings’ hottest slogans. FT Middle East correspondent Raya Jalabi reports on the protests.

• Extra Center East information: Iran has begun a crackdown on dissent forward of this month’s first anniversary of the demise of Mahsa Amini in police custody that triggered the nation’s greatest protests in additional than a decade.

5. Republican main candidate Nikki Haley stated it was time for America’s older political leaders in each political events to “step away” as the previous US ambassador steps up her assaults on US gerontocracy to spice up her bid for the White Home in 2024. Haley’s feedback got here after Mitch McConnell, the Republican senate chief, had a well being scare final week, showing to freeze whereas talking to reporters for a second time in as many months. Haley blasted the Senate as the “most privileged nursing home in the country”.

The Massive Learn

The demise of the Dalai Lama has the potential to spark one of many most extraordinary stand-offs in international politics. Behind the scenes, there are already indicators that each the Tibetan exile neighborhood and the Chinese language management are stepping up preparations for his passing. The succession course of could be a tug of warfare that might additionally attract India and the US, making the Nobel laureate’s well being a matter of rising worldwide curiosity.

We’re additionally studying . . . 

• Army briefing: Right here’s why the sandy soil in southern Ukraine might give Kyiv’s counteroffensive a better chance of success than a few of its allies worry.

• China vs the wine world: Wine critic Jancis Robinson does a blind tasting of Chinese language wine alongside prime bordeaux. Here’s what she learned.

• How to not community: A nakedly self-serving method to constructing connections places individuals off, writes Miranda Green.

Chart of the day

India’s Hindi and regional language leisure sector has grown into one of many world’s largest movie industries, churning out extra motion pictures than another nation yearly since 2005, in line with Sony. The Japanese leisure big’s chief Kenichiro Yoshida discusses Sony’s plans to crack Bollywood in this interview with the FT.

Take a break from the information

Cantonese meals is greatest recognized within the west as an affordable takeaway. However eating places akin to The Chairman in Hong Kong are altering perceptions overseas of certainly one of China’s 4 nice cuisines. The restaurant’s proprietor, Danny Yip, tells FT Journal why Cantonese food is not what you think it is.