Russia and China may start using barter trade schemes — they may conclude agreements related to agriculture as early as autumn. In this way, they want to limit the use of banking systems controlled by the US and avoid sanctions.
Reuters writes about it.
During Putinʼs visit to China in May, one of the main topics was the delay in bilateral payments. Although the countries found workarounds, for example, using small regional Chinese banks, whose activities are difficult for Washington to control, but problems with payments remained.
Barter trade will avoid bank payments, limit currency risk, and also reduce the visibility of cooperation between the two countries in the eyes of Western regulators.
Russia is currently developing regulations for barter trade. Most likely, China is busy with the same.
Both China and Russia have experience in barter trade. For example, in 2019, Beijing agreed to receive palm oil from Malaysia in exchange for construction services, natural resources, and defense equipment. For two years, China exported auto parts to Iran in exchange for pistachios.
Barter deals between Moscow and Beijing were commonplace before the collapse of the Soviet Union, with some continuing into the early 1990s. However, with the development of the banking sector, all trade moved to bank settlements.