Punitive sanctions unleashed by the west leave Russia increasingly economically isolated. They may have the unintended consequence of drawing Russia and China closer together. This could be accelerated by the two countries’ efforts to create alternative payment systems. But fears that it will give rise to a powerful new economic bloc look overblown.
In theory, Beijing could provide the financial infrastructure needed to help Moscow bypass western sanctions. In practice, it is far from a straightforward process. The credit card payment sector is a case in point.
Over the weekend, Visa, Mastercard and American Express became the latest companies to suspend operations in Russia following its invasion of Ukraine. Cards issued by the three companies in Russia will no longer work outside the country. Those issued elsewhere in the world will not be usable in Russia.