🇨🇳Financing in China: trade finance, Sinosure and RMB payments

Concept

Trade finance in China is built around a real delivery. A bank or an insurer underwrites a specific commercial cycle rather than a company in the abstract: the contract, the goods, the buyer, the invoice, the logistics, the customs paperwork and a traceable source of the payment. A Chinese bank lends against a confirmed transaction and a verifiable turnover of goods and money. An intention to finance trade, with no shipment behind it, is not a fundable object here.

Quoting a rate or a limit outside a transaction is not possible either. Pricing starts from the Loan Prime Rate, which the People's Bank of China publishes monthly — 3.00% for the one-year tenor and 3.50% for five years and above at the fixing of 20 September 2026, the sixteenth consecutive month without a change (official publication by NIFC, authorised by the PBoC) — and the weighted average rate on newly issued corporate loans was 3.04% in June 2026 (PBoC quarterly monetary policy report, Q2 2026, PDF). From that anchor the actual price of a trade line moves with the currency, the bank, the tenor, the collateral, Sinosure coverage, the buyer's country, the commodity and the credit record. How a borrower reaches that pricing, and what changes when the beneficiary is foreign, is covered in corporate lending in China.

Financing rests on the quality of the goods perimeter: HS codes, a transparent buyer, a clean payment route. Large turnover on its own guarantees nothing — a bank that cannot reconstruct the shipment will not price the risk.

Core instruments

Documentary credit

A letter of credit moves the payment risk from the counterparty to a bank. The issuing bank pays against a document set — contract, commercial invoice, packing list, bill of lading, certificate of origin — and pays only if the documents match the terms. This is the default instrument for a first transaction with an unfamiliar supplier, and the reason discrepancies in paperwork stop money that the goods themselves would not. For a Russian importer there is a further question: whose letter of credit the Chinese side will accept at all. A letter of credit opened by a Russian bank on OFAC's SDN list is as a rule not accepted — after the package of 21.11.2024, Bank of China, Bank of Kunlun, Ping An Bank, Bank of Ningbo, ICBC, China CITIC Bank, Industrial Bank and Bank of Taizhou each stopped accepting transfers from banks on that list (Russian legal news portal Pravo, 03.12.2024).

The trigger for a refusal is the sanctions status of the sending bank, not the payer being Russian, so the working address remains a Chinese bank holding a Russian licence: AKB Bank of China (JSC) is a Russian legal entity supervised by the Bank of Russia (Bank of Russia register card, OGRN 1027739857551) and offers an international letter of credit (the bank's product page, updated 14.04.2026).

Buyer's credit and supplier's credit

Medium-term export lending comes from China Exim Bank and the larger commercial banks. Under an export buyer's credit China Exim Bank lends, in local or foreign currency, to an overseas borrower — the importer, its bank, or a finance ministry or government-authorised institution of the importing country — to pay for Chinese goods, technology or services. The bank's published conditions concern the borrower rather than the cargo: a reasonably stable country, a creditworthy borrower able to repay, goods that comply with Chinese and importing-country rules and, where the bank asks for them, a repayment guarantee and export credit insurance (China Exim Bank, Export Buyer's Credit). The instrument is built for large deliveries and projects; a single small consignment rarely justifies it.

Sinosure

China Export & Credit Insurance Corporation is the state export credit insurer: it underwrites the risk that a foreign buyer fails to pay, which is what allows a Chinese supplier or its bank to accept deferred settlement. For an importer the effect is indirect but decisive — the cover makes the credit risk acceptable to the Chinese side, and payment terms or bank financing appear where a prepayment demand used to stand. The importer is not the insured party and never receives a loan; it receives payment terms.

For a Russian buyer this comes with a material caveat: according to Vedomosti of 06.11.2024, since November 2024 Sinosure has systematically declined to insure exports to Russia and has zeroed the credit limits of Russian buyers. There is no public act excluding Russia from cover, and the refusal does not prohibit the shipment, but it moves the deal from 90–120 days of deferred payment to prepayment. The policy families, the buyer-limit procedure and the economics of the premium are set out separately in Sinosure.

EXIAR-backed finance for Russian exports

Bank of China Russia's published product finances clients' Russian export contracts under EXIAR cover. It requires Russian content, excludes raw-material contracts such as oil, gas and coal, and generally covers financing up to 80% of contract price, with transaction-specific exceptions. This is the bank's product description, not a universal EXIAR indemnity percentage. Its export direction differs from Sinosure support for purchases from China.

Invoice and receivables finance

Discounting invoices or assigning receivables works where the buyer is repeat and the payment history is documented. A first invoice to a new counterparty carries no history and is not financeable on its own.

Five financing and insurance instruments

How a borrower reaches a Chinese bank line at all, and what the price is built from, is the access tree in corporate lending in China. Sinosure's scale is easily misread when set against Western agencies: about 84% of its 2024 volume is short-term cover of trade flows, the segment served in the West by the private insurers Allianz Trade, Atradius and Coface, so the fair comparators for medium- and long-term credit are Euler Hermes, Bpifrance, UKEF and NEXI — that comparison is laid out in Sinosure.

Underwriting and the payment perimeter

Goods. HS code, technical specification, end use and export-control status. Dual-use classification, or an end user the applicant cannot describe, stops the file before the credit committee sees it.

Counterparties. Shareholders, directors, ultimate beneficial owner, the supplier and the buyer are all run against sanctions and control lists (sanctions screening). One flagged link in the chain is enough to close the route, including for banks with no direct exposure to the listed party.

Documents. SAFE requires banks to examine trade documents and satisfy themselves that a cross-border receipt or payment corresponds to a genuine and lawful underlying transaction (SAFE, foreign exchange administration of trade in goods). That is why "process the payment now, the paperwork will follow" does not work in China, and why document quality is a credit factor rather than a formality.

Money. Where the payment comes from, how long the cash cycle runs, what the bank statements show, whether accounting and tax filings reconcile with the claimed turnover.

Country risk. The buyer's jurisdiction sets the insurance category and the appetite behind it; the same contract prices differently depending on where the goods land.

Russian nexus: what the bank checks on top

Where one party to the deal is a Russian company, the list gains a check that the Chinese bank runs without any requirement from its own regulator. Neither the PRC nor Hong Kong has issued a normative act prohibiting dealings with Russian persons; what is observed are the institutions' own de-risking decisions, which makes them reversible and negotiable.

The cause of those decisions is US secondary sanctions. EO 14114 of 22.12.2023 allows the US Treasury to act against a foreign financial institution for a significant transaction for a blocked person or on behalf of Russia's military-industrial base, and the measure is the bank's own SDN listing or a ban on US correspondent accounts. A "significant transaction" has no dollar threshold, so no safe payment size can be calculated. Since 12.06.2024 every person blocked under EO 14024 counts as part of the military-industrial base, and from that point refusals became systematic (OFAC FAQs 1146–1151; US Treasury press release JY2404 of 12.06.2024).

A refusal on this ground comes without reasons, and that is a property of the mechanism rather than negligence. The typical pattern is a long review with requests for further documents, then a refusal with no explanation; the bank does not name sanctions as the cause — in the Heihe Rural Commercial Bank case the halt in settlements was attributed to adjustments of internal infrastructure. The practical conclusion for contract work: such a refusal creates no evidentiary basis for force majeure, and the risk of a payment not going through has to be allocated in the contract itself.

Two facts change the assessment of the risk itself. As at 14.11.2025 the United States had never sanctioned a Chinese bank for facilitating settlements with Russia, as recorded in a staff research paper of the U.S.-China Economic and Security Review Commission (USCC) (USCC, China's Facilitation of Sanctions and Export Control Evasion, 14.11.2025) — the effect has been achieved by the threat rather than its use. The EU listed Chinese banks for the first time in its 18th package of 18.07.2025, and for Heihe Rural Commercial Bank the effect is traceable by dates: listing on 19.07.2025, a ban for EU persons from 09.08.2025 and a halt to accepting payments from Russia from 28.08.2025. The full chronology of Chinese banks closing to payments from Russia is set out in restrictions of Chinese banks.

Instead of checking the beneficiary, the bank applies proxy filters: territorial limits (accounts only within its own province), lists of undesirable registered addresses, sector codes. The reason is that the KYC gap cannot be closed. The Russian side widens that gap itself: Russian Government Resolution No. 1102 of 04.07.2023 allows sanctioned issuers not to disclose their management bodies, affiliates, subsidiaries and segment data — precisely the data against which the 50% rule and sector affiliation are checked. It is a choice rather than an oversight: an opaque structure protects against Western targeting and costs dearly with a Chinese bank, so the decision to disclose to the extent of a bank file is taken explicitly.

Since 20.03.2024 an EU exporter must include in its contract with a third-country counterparty a ban on re-export to Russia (Article 12g of Regulation 833/2014). The PRC and Hong Kong are not on the list of partner countries, so for a Chinese intermediary buying European goods the clause is mandatory and visible in its contracts.

When financing is realistic

• There is a repeat flow of goods, not a one-off idea: the same commodity, comparable volumes, a visible history.
• The supplier is willing to work with a bank and with Sinosure — to disclose contracts, accept an assignment of insurance proceeds and ship on open account.
• The buyer and the end use are clear and can be documented.
• The applicant keeps proper accounting, has audited statements, bank statements and a tax record.
• Nothing in the perimeter is sanctioned: no listed bank, no prohibited commodity, no concealed end user.

When it does not work

• A loan is requested before any contract exists — a credit line "to look for deals with" has no underwriting object.
• The goods are dual-use and no classification opinion has been obtained.
• The chain touches a sanctioned bank, carrier, insurer or beneficiary.
• The supplier refuses to disclose contracts, invoices or shipping documents to the bank.
• Turnover is manufactured through intra-group invoicing; the same money circling between related companies is visible in the statements and is read as a fabricated flow.

RMB settlement and the currency of the deal

The renminbi trades as two currencies with two prices: onshore CNY inside the mainland, under capital-account rules, and offshore CNH in Hong Kong and elsewhere, freely convertible and priced by offshore supply. Quotes and funding curves differ, and the Hong Kong Monetary Authority expects banks selling renminbi investment products to explain to clients whether the exchange or interest rates behind the product are onshore CNY or offshore CNH rates (HKMA circular of 6 January 2015 on the selling of investment products, PDF).

Cross-border settlement runs through CIPS, launched in 2015. At end-August 2026 it had 211 direct and 1,642 indirect participants (CIPS operator announcement of 4 September 2026), spread across every inhabited continent. Four of the direct participants are Chinese-owned banks in Russia — Bank ICBC's renminbi settlement centre, Bank of China (Russia), China Construction Bank (Russia) and Agricultural Bank of China (Moscow) (CIPS participant list). Under the CIPS business rules in force since 1 February 2026, only a direct participant holds a CIPS account; an indirect participant has a CIPS code but no account and routes its payments through a direct participant, and messages follow standards that the CIPS operator itself publishes (CIPS business rules, PDF). A yuan payment from abroad therefore needs either a direct participant or a correspondent bank holding a renminbi clearing account, and the bank checks that route as carefully as the goods. Yuan settlement is usually simpler where the supplier prices in RMB, where the buyer holds a yuan balance, or where a dollar leg would add a correspondent bank that does not want the transaction. Routing options for the payment itself are set out in payments to Chinese suppliers.

Paying from Russia: channels and cost

The main currency of Russian imports from Asia is the rouble, not the yuan. In June 2026 the rouble accounted for 51.2% of settlements for imports from Asian countries, other currencies — the yuan among them — for 42.0%, and currencies of unfriendly states for 6.8% (Bank of Russia, external sector statistics, file cur_str_new.xlsx, updated 14.09.2026).

The practical consequence: an importer paying its supplier in roubles has no yuan position, and a yuan loan does not close one — it creates one.

Few channels carry a payment through to a Chinese supplier, and each has its own price.

The spread of market participants' estimates follows from how the market is built: the price depends on the commodity group, the amount and the channel, and a large volume moved through a banking route and a retail agency scheme are different products sold under one name. Hence the main conclusion of this section: the "payments problem" left the agenda in 2025–2026 not because the sanctions regime softened — it did not — but because a workaround clearing costing about one per cent was built.

Crypto settlement is not a standalone channel. Under Federal Law 259-FZ digital currency is property, not money, and Article 14 prohibits a resident from accepting it as payment; Federal Law 45-FZ of 11.03.2024 admitted digital financial assets and utility digital rights as consideration under a foreign-trade contract, and Federal Laws 221-FZ and 223-FZ of 08.08.2024 (in force from 01.09.2024) empowered the Bank of Russia to introduce experimental legal regimes for settling foreign-trade contracts in digital currency. Outside such a regime, settlement in digital currency is a violation, and the volume of such settlements is not publicly measured. The practical risk beyond the prohibition: a crypto payment severs the link to customs and currency control, which is built around a bank payment.

What the Russian party must do

The payment route is half the work; the other half is done at home and before shipment. An import contract is registered with an authorised bank and given a unique number where the obligations reach RUB 3 million (for an export contract the threshold is higher, RUB 10 million) (Bank of Russia Directive 6819-U). Where the total obligations under a contract do not exceed RUB 1 million, the resident gives the bank only the transaction-type code instead of supporting documents; that threshold, set per contract rather than per payment, was raised from RUB 600,000 to RUB 1 million from 01.04.2024 by Bank of Russia Directive 6663-U. Liability for breaching the registration and reporting procedure is set by Article 15.25 of the Code of Administrative Offences.

A settlement in roubles with a non-resident is also a currency transaction, so a rouble payment to a Chinese supplier does not escape contract registration.

Two obligations an importer usually expects do not arise here. The repatriation requirement under Parts 1 and 2 of Article 19 of Federal Law 173-FZ does not apply to foreign-trade activity (Decree No. 529 of 08.08.2022), and mandatory sale of proceeds is addressed to a closed list of exporter groups under Decree No. 771, with the ratios set to zero by Government Resolution No. 1210 of 14.08.2025. For a company outside that list the question of how many yuan it must sell does not arise — but the mechanism has not been dismantled, and the ratios are restored by a Government resolution.

An account with a Chinese or Hong Kong bank is opened without permits: the obligations come down to notifying the tax authority within one month and filing a quarterly report on account movements.

The special restrictive regimes do not apply to settlements with a Chinese counterparty either: the PRC, Hong Kong and Macao are not on the list of unfriendly states (Government Order No. 430-r of 05.03.2022), so neither the type-"C" account regime (Decree No. 95) nor Decree No. 81 applies, and no Government subcommission permit is needed to pay a Chinese supplier. The PRC and Hong Kong are on the list of automatic-exchange states, so under Part 4 of Article 12 of Federal Law 173-FZ any funds may be credited to such an account — a rare case where the Chinese route is objectively easier than the European one. The jurisdiction's status is checked at the date of the transaction against the current Federal Tax Service order, and the list is reviewed annually.

A force-majeure certificate is the Russian importer's standard tool, but it is not something to count on for a payment that a bank refused or returned over sanctions risk: that risk stays with the buyer and becomes a matter of contract work — the performance deadline, the procedure for a returned payment, the allocation of agent commissions, a currency clause.

Hong Kong, the mainland and where the deal sits

A Hong Kong company as buyer or intermediary simplifies foreign exchange, opens access to CNH funding and shortens the account-opening path compared with a mainland entity (Hong Kong as a hub). What it does not change is what the bank underwrites: the real logistics, the real supplier and the real end buyer. A Hong Kong invoice sitting on top of a shipment that moves from a mainland factory to a third country is priced on the shipment, not on the invoice.

Some instruments are unavailable outside the mainland perimeter altogether — export credit through China Exim Bank, Sinosure cover on the supplier side and direct onshore yuan clearing all presuppose a Chinese supplier or a mainland structure of the applicant's own.

Where this is heading

RMB settlement and the CIPS network keep expanding, and the share of Chinese foreign trade invoiced in yuan grows with them. Export lending through China Exim Bank and insurance through Sinosure remain instruments of industrial policy rather than purely commercial products: cumulatively Sinosure had supported over $10 trillion of domestic and international trade and overseas investment as of the end of 2025 (SINOSURE company profile), and the NFRA supervisory measures in force since 1 January 2025 require it to keep to its role as a policy financial institution and to use policy insurance in support of foreign trade and outward investment (NFRA, 金规〔2024〕21号, Articles 5–6). Transparency requirements rise in step with sanctions and export controls, so the documentary burden on a genuine transaction grows even as funding itself gets cheaper. The trend does not extend to insurance cover: Sinosure has been declining Russian buyers since November 2024, and no reversal has been publicly recorded.