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China to Support Russia’s Oil and Gas Giants With Yuan Financing, Financial Times Reveals
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![Photo of Ivan Khomenko]( "Photo of Ivan Khomenko")
China is preparing to open its domestic bond market to major Russian energy companies for the first time in eight years.
The move would provide access to capital markets that have been largely closed to Russia since the beginning of the full-scale invasion of Ukraine.
According to the Financial Times on September 8, Chinese regulators informed executives of Russian energy companies during a meeting in Guangzhou in late August that they would support plans to issue so-called “panda bonds”—yuan-denominated bonds sold in mainland China.
The last time a Russian company raised funds this way was in 2017, when Rusal placed bonds worth 1.5 billion yuan (about $210 million).
Allen Wang, a partner at the Beijing law firm Jincheng Tongda & Neal, told Financial Times that while the idea is “attractive,” implementation would require “approval from above.”
Wang noted that most leading Russian energy firms are under Western sanctions, which raises concerns for Chinese banks acting as buyers or brokers of panda bonds. “The broker will still face the risk of secondary US sanctions,” he said.
Sources told the Financial Times that initial issuers could include Rosatom and its subsidiaries, which are not under Western sanctions.
Gazprom has also undergone certification with a local ratings agency to prepare for possible issuance. On September 6, Shenzhen-based CSCI Pengyuan assigned Gazprom its top rating of AAA with a stable outlook, citing its strategic importance for Russia’s energy sector.
During his four-day visit to Beijing, Vladimir Putin was accompanied by Gazprom’s CEO Alexei Miller, who announced a “legally binding memorandum” on the construction of the Power of Siberia 2 pipeline.
According to the Financial Times, no such agreement was listed among official documents published by the Kremlin, and the Chinese side has not confirmed Miller’s statement.
Before Russia’s full-scale invasion of Ukraine, Gazprom sold up to 180 billion cubic meters of gas annually to Europe. Deliveries have since dropped below 50 billion cubic meters, and the European Union plans to phase out Russian fossil fuels completely by 2028, according to Reuters.
As of June 30, Gazprom reported 537.2 billion rubles in cash reserves, compared with more than two trillion rubles at the end of 2022.
The Financial Times notes that other Russian firms, including Atomenergoprom, Novatek, and Zarubezhneft, have already received Chinese credit ratings, potentially paving the way for their entry into the yuan bond market.
Earlier, Russian citizens were required to obtain visas to enter China, with applications involving invitations, proof of funds, and travel itineraries that could take days or weeks to process.
