Chinese financial market regulators expressed their support for issuing bonds in Chinese currency (“panda bonds”) by major Russian energy groups during a meeting with Russian executives in Guangzhou at the end of August.
This initiative would mark the first fundraising by Russian companies in Chinese public markets since the 2022 invasion of Ukraine, and the first operation of this kind since the Russian aluminum producer Rusal issued “panda bonds” worth 1.5 billion yuan (about 180 million euros) in 2017.
The project could initially involve two or three groups, including the state-owned Rosatom and its affiliates, which are not subject to comprehensive Western sanctions, according to sources.
Gazprom, also involved, received a top credit rating (“AAA”) from the Chinese agency CSCI Pengyuan last week, a necessary step to access the market.
This move comes as China and Russia strengthen their strategic cooperation. On Tuesday, the Chinese and Russian presidents, Xi Jinping and Vladimir Putin, met in Beijing and announced an agreement for the construction of the Power of Siberia 2 pipeline, a project that could redefine global energy flows.
Most major Chinese banks have so far avoided financing Russian companies, fearing secondary U.S. sanctions. However, the growing importance of the yuan as an external currency and close ties with Moscow are prompting a revision of these restrictions.
Sources warned that legal risks persist: Chinese banks intermediating these issuances remain subject to potential sanctions from the U.S. Treasury Department, especially if the issuers are directly sanctioned.
In addition to Gazprom and Rosatom, other Russian energy companies, such as Novatek and Zarubezhneft, have already obtained credit ratings in China, according to reports.
Entities such as the People’s Bank of China, the China Securities Regulatory Commission, and the National Association of Financial Market Institutional Investors declined to comment.
The initiative comes at a time when Russia’s access to Western financial markets is heavily restricted, potentially representing another step in Moscow’s attempt to diversify funding sources and reduce dependence on the dollar, it was noted.
