Sanctions imposed in recent years have radically changed the way Belarus conducts international payments, especially with China. Whereas settlements used to take two to three days, they now often take up to three weeks. This is a direct consequence of the restrictions imposed on the country's financial sector.
Against this background, Belarusbank has made it one of its key tasks to ensure payments of sanctioned companies. For this purpose, the bank created a separate Export Center, which develops bypass schemes and supports risky operations. According to sources, up to 70% of trade turnover with China passes through the bank, which actually makes it the heart of the entire system of sanctions circumvention.
How schemes work: from gray routes to trying to enter CIPS
Each enterprise under sanctions is developed an individual payment scheme to hide the participants and the real routes of money movement.
A logical continuation was the desire to connect Belarusbank to the Chinese interbank system CIPS, which bypasses SWIFT. In 2023 for this purpose:
- bought special equipment,
- laid a direct fiber-optic line to China,
- spent about 380 thousand rubles.
But the project was never launched: China refused - the risks of secondary sanctions proved to be too high.
It is indicative that it was in 2023 that Belarus imported a record volume of Chinese military and dual-use products, including equipment for arms production. If CIPS were to work, Belarus could turn into a major assembly plant of equipment for Russian needs.
Nevertheless, the authorities continue to lobby for the connection.
The gold issue: externally managed reserves
Belarus has about $945 million worth of monetary gold deposited with the British ICBC Standard Bank (a subsidiary of China's ICBC). To reduce the risk of its blocking, Belarus and ICBC are discussing an option:
- take out a loan in RMB for a similar amount,
- to enter into a three-year swap agreement for 7 billion yuan.
But China's proposed terms are problematic:
Foreign exchange reserves must exceed three months of imports - Belarus does not fulfill this criterion. The loan is granted as a short-term loan only.
That is, it will be almost impossible to actually use such money. Despite this, Minsk hopes that the signing of the agreement will open the way for further negotiations.
What the economy is based on
It was Chinese support that allowed the authorities to avoid drastic cuts in social spending in 2022. But the payback for this is growing. In January 2025, Belarus will have to pay about $228 million in obligations to the Eximbank of China alone, including the debt for the unprofitable Belintersat-1 satellite project.
Liquidity is melting: the yuan is running out of money
The financial condition of Belarusbank itself is deteriorating. In the second half of 2024, there was an acute shortage of liquidity in yuan: balances on accounts in China halved to 1.9 billion yuan.
Reasons:
- the transition to a negative trade balance with China,
- limited access to yuan after sanctions against the Moscow Exchange,
- reduction in RMB revenues from Russia.
The inevitable finale
All these factors are adding up to a systemic financial crisis, which the authorities are trying to compensate for with manual management. But dependence on China continues to grow, sanctions pressure is intensifying, and a return to the «conditions of 2020» is no longer possible - that period was only a short pause on the long path of economic degradation.
If the current political model persists, Belarus will continue to lose its economic sovereignty and the financial system will be destroyed.
Long Live Belarus!
