Digital platform Qifa Expands to Facilitate Russia-China Trade and Payments
Qifa expands into facilitating two-way trade between Russia and China to address payment challenges. Strong demand for industrial goods from China drives Qifa's current focus. Qifa plans to include commodities in its offerings in the future.
With the threat of secondary U.S. sanctions on Chinese banks involved in trade with Russia, Moscow and Beijing have resorted to complex measures, including utilising small regional Chinese banks, to avoid payment delays.
Previously, Qifa primarily focused on importing Chinese consumer goods to Russia. However, this year, the platform has launched bilateral trade, charging commissions from buyers in China in yuan and buyers in Russia in either yuan or roubles, according to Sun Tianshu, the founder and majority shareholder of Qifa.
Tianshu highlighted that there is a strong demand for industrial goods from China, such as car parts, agricultural machinery, tools, and equipment. While the platform currently focuses on these products, Tianshu mentioned that Qifa plans to expand its offerings to include commodities in the future. Tianshu also expressed optimism about the long-term presence of energy products on their platform.
Trade between Russia and China reached a record US$240 billion in 2023. Qifa projects that annual trade will exceed US$350 billion by 2028, with a significant increase in market share for B2B digital commerce.
To ensure smooth payments, Qifa relies on a wide network of financial institutions, particularly as settlement issues have become more acute this year. Deputy board chairman Kyle Shostak explained that the challenges stem from secondary U.S. and EU sanctions. However, Qifa has been able to navigate these obstacles due to its status as a Chinese company and its longstanding relationships with numerous banks in China. Shostak clarified that these banks are not necessarily major international Chinese banks, but rather regional banks located where Qifa's suppliers are based.
In a recent report, Reuters revealed that China has authorised small regional banks to facilitate payment flows with Russia, allowing them to operate below the radar of U.S. sanctions.
Qifa expands into facilitating two-way trade between Russia and China to address payment challenges.
Strong demand for industrial goods from China drives Qifa's current focus.
Qifa plans to include commodities in its offerings in the future.
Source: REUTERS