As it turns out, American megabanks like JPMorgan and Goldman Sachs aren't the only ones buying up distressed Russian assets. Chinese banks are also getting in on the fun.
China is considering buying or increasing stakes in Russian energy and commodities companies, such as gas giant Gazprom and aluminum giant Rusal International, according to people familiar with the matter, Bloomberg reports.
Beijing is in talks with its state-owned firms, including China National Petroleum, China Petrochemical, Aluminum Corp. of China and China Minmetals Corp., about potential opportunities for potential investments in Russian companies or assets, the people said. Any deal would be to bolster China’s imports as it intensifies its focus on energy and food security, not as a show of support for Russia’s invasion in Ukraine, the people said.
The talks are still in an early stage, and it's unclear whether a deal will result, as the discussions aren’t public. Some talks between Chinese and Russian energy companies have started to take place. The Chinese companies involved refused to comment to Bloomberg.
As European and American firms cut ties with Russian firms, China has vowed to continue normal trade relations with Russia. The decision comes as American and European energy giant Exxon Mobil, Shell and BP have walked away from Russian assets worth billions of dollars.
China Foreign Minister Wang Yi said during a press briefing earlier this week that China-Russia ties remain “rock solid", even as Beijing called on Russia to engage in peace talks to try and end the war.
Among China’s current energy investments in Russia, CNPC has a 20% stake in the Yamal LNG project and a 10% stake in Arctic LNG 2, while Cnooc owns 10% of Arctic.
China and Russia have been strengthening ties for years. Just last month, President Xi and President Putin signed a series of deals to boost the Russian supply.
Gazprom and Rosneft have sealed major supply deals with China, which have helped soften the impact of western sanctions (which, remember, have largely left Russia's vital gas and oil industry untouched). The partnership has inspired Russia's own "pivot to Asia", a policy that Barack Obama had also tried to impose on the US.
An investment by China could help solidify Moscow’s effort to accelerate its own “Pivot to Asia” as it looks for new markets for its energy products. China has doubled purchases of Russian energy products to nearly $60 billion over the past five years, and most analysts expect this figure to continue to rise.