[1]
By John Helmer, Moscow
@bears_with [2]
On September 3 [3] President Donald Trump accused Vladimir Putin, Xi Jinping, and Kim Jong Un of “conspir[ing] against the United States of America”.
Four days later on September 7 [4], when asked by a reporter “Mr. President! Are you ready, are you ready to enter the second phase — Are you ready to enter the second phase of sanctions against Russia or punishing Putin”, Trump replied: “Yeah, I am.”
Trump then promised [5] to telephone Putin “over the next couple of days”, adding that this week at the White House “certain European leaders, are coming over to our country on Monday or Tuesday and, uh, individually. And I think we’re gonna get that settled. I think we’re gonna get it settled.”
By the start of Wednesday there has been no telephone call to Putin, and no European leaders have appeared in Washington to talk to Trump. Instead, Trump dialled into a conference call with EU leaders to announce he would join the European Union (EU) in a 100% penalty tariff on India and China for buying Russian oil on condition the EU moved first. As Trump was threatening, his Treasury Secretary Scott Bessent was meeting an EU delegation to determine if the EU can follow through over opposition from Hungary, Slovakia and other member states.
“We’re ready to go, ready to go right now, but we’re only going to do this if our European partners step up with us,” a US Treasury official briefed the Financial Times [6]. “The president came on this morning and his view is that the obvious approach here is, let’s all put on dramatic tariffs and keep the tariffs on until the Chinese agree to stop buying the oil. There really aren’t many other places that oil can go.” A second US official told the Japanese-owned propaganda platform against China: “Washington was prepared to mirror any tariffs on China and India imposed by the EU, potentially leading to a further increase in US levies on imports from both countries.”
There was no corroboration of EU agreement on the US terms from David O’Sullivan, the EU sanctions official who led the European delegation at the US Treasury. US Treasury Secretary Bessent was threatening in principle, evasive in practice after meeting O’Sullivan. “The United States and European Union are aligned on the importance of ending the war in Ukraine,” Bessent tweeted [7]. “All options remain on the table as part of @POTUS’ strategy to support peace negotiations. Business as usual has not worked. We are willing to take strong measures against Russia, but our European partners must fully join us in this to be successful. I made this clear today when meeting with @EU_Commission Sanctions Envoy David O’Sullivan.”
The Kremlin responded [8] that “this unprecedented number of sanctions that have been imposed against our country over the past four years has had no effect…no sanctions will be able to force the Russian Federation to change this stalwart position.”
Putin had told [9]reporters in Beijing on September 3 he is waiting for the commitment of the Trump administration “to find a solution, not just to issue appeals…We will see how it goes from here. If not, we will have to achieve the tasks set before us by military means.” He then added in Vladivostok on September 5 [10]: “We have an open dialogue with President Trump. We have agreed to call each other, if need be, and talk. He knows that I am open to such talks, as well as he is – I know it. However, so far, based on the results of these consultations in Europe, we have not had any discussions.”
Putin acknowledged [10] also: “Regarding possible military contingents in Ukraine. This is one of the basic reasons for dragging Ukraine into NATO. So, if any troops appear there, especially now, during combat operations, we will deem them legitimate targets for destruction. And if any decisions leading to peace, a lasting peace, are achieved, then I will not see the sense of their deployment in Ukraine, that’s it. If agreements are achieved, then no one should doubt that Russia will execute them in full. We will observe the security guarantees, which, of course, would be drafted both for Russia and Ukraine. And I will say it again: Russia will observe these agreements. Anyway, nobody has ever discussed it with us seriously, that’s that.”
While Trump and Putin wait on each other, Putin and Xi appear to have agreed to begin state to state financing of the two countries’ energy trade, bypassing US and EU sanctions on Russian and international banks, and replacing US dollar pricing and payment systems for their oil and gas trade. The Tianjin Declaration of last week, the 25-page communiqué [11] of the Shanghai Cooperation Council (SCO) summit meeting chaired by Xi, had camouflaged the new details in a general commitment to “emphasize the important role of cooperation in the financial sphere in promoting economic growth in the SCO area”. Also, “given the instability in international energy markets, member states noted the importance of strengthening cooperation, including in the areas of energy security, energy infrastructure protection, promotion of investment cooperation.”
Agreement by China to the new scheme was leaked to the Financial Times [12] from unidentified Japanese sources. “China is preparing to reopen its domestic bond market to major Russian energy companies, in a shift of policy that reflects deepening diplomatic and economic ties between Beijing and Moscow. Two [Japanese] people familiar with the matter said senior Chinese financial regulators told top Russian energy executives at a late August meeting in China’s southern city of Guangzhou that they would support their companies’ plans to sell renminbi panda bonds. Such borrowing would be the first Russian corporate fundraising in mainland China since Moscow’s full-scale invasion of Ukraine in 2022 and the first Russian debt sold on China’s public onshore market since state aluminium producer Rusal’s panda bond issue raised a total Rmb1.5bn ($210mn) in 2017.”
In Moscow, the strategic significance of the new Sino-Russian financing plan is acknowledged without fanfare. Read the analysis just published by Vzglyad [13], the Moscow security analysis platform.
NEW TRUMP TARGET — RUSSIAN CRUDE OIL AND REFINED PRODUCT FLOWS TO EUROPE
[14]Source: https://www.spglobal.com/commodity-insights/en/news-research/latest-news/refined-products/090225-european-diesel-trade-map-redrawn-following-russia-ukraine-conflict [15] Direct Russian crude oil deliveries to the EU via the Druzhba pipeline went to the Czech Republic until April 2024 and have subsequently stopped. The deliveries continue to Slovakia and Hungary. Russian gas flows into the EU as LNG transported by tanker and as natural gas through the Turkstream pipeline. In 2024, France, Spain, and Belgium accounted for 85% of Europe’s Russian LNG imports, and France and the Netherlands increased their Russian LNG imports by 81% compared to 2023.
[16]Source: https://vz.ru/economy/2025/9/9/1358356.html [13]
The following translation is verbatim. Illustrations have been added for clarification of the main points.
[17]September 9, 2025
China to open access to cheap money for Gazprom and Rosatom
By Olga Samofalova
China is ready to open its capital market to Russian energy companies. Rosatom and Gazprom are the first in line to issue panda bonds. For four years now, they have had to rely only on domestic financing since the United States and the EU stopped lending. If this happens, the issue of Russian panda bonds will be the first since 2017. Why do our companies need them?
China plans to open its domestic bond market to large Russian energy companies, reflecting even deeper ties between Moscow and Beijing, the Financial Times says, citing sources. The last time panda bonds were placed in China by Rusal for 1.5 billion yuan.
[18]Source: https://en.cicc.com/media-relations/details118_1312.html;jsessionid=268C33479B815BC7F59F0F1B8D30693E [19] According to the Shanghai broker, the first tranche was secured by China United SME Guarantee Corporation, with bond rating of AAA. The coupon rate was 5.5%. The volume was just RMB 1 billion; Rusal had announced its target to raise RMB 10 billion [20].
According to the FT sources, the revival of panda bonds will begin with two or three companies. And the first in line is Rosatom and its subsidiaries, which are not subject to large-scale sanctions. Gazprom is second in line, sources tell Reuters.
At the same time, the Russian Finance Ministry would prefer that yuan-denominated sovereign bonds be issued in Russia rather than panda bonds in China, according to a statement released on Monday.
One of the first Western sanctions after 2014 was precisely restrictions on borrowing in the capital markets in order to deprive Russian companies of the opportunity to develop and invest in new projects. First, long-term loans were hit, and since 2022, the American and European markets have been completely closed. At the same time, the Chinese debt market, the world’s second largest, did not look very attractive until 2022 due to its high interest rates. Plus, Chinese banks themselves have become more cautious about Russian companies for fear of falling under secondary sanctions.
[21]Source: https://ycharts.com/indicators/china_loan_prime_rate [22]
According to Yulia Khandoshko, CEO of the European broker Mind Money (ex-Cerih), “until 2022, Russian companies actively issued Eurobonds. That’s where the market depth, transparent infrastructure, and clear rating frameworks were. At that time, China remained more of an experimental destination. And Rusal’s issuance of panda bonds in 2017 was an attempt to diversify its sources of borrowing against the background of existing restrictions after 2014. But the cost of such a loan turned out to be more expensive than classic loans in London or Luxembourg.”
After 2022, access to Western markets was completely closed, and for four years our companies lived off domestic bonds and loans from the state-owned banks. Most of the bonds on issue belong to Rusal and Gazprom. But the Russian market has limitations: the volumes are smaller, the interest rate is higher, and there is no currency diversification, Khandoshko adds.
In addition, in the last two years lending in Russia has become very expensive due to the high interest rate, so an alternative borrowing market would be very useful now.
[23]Source: https://tradingeconomics.com/russia/interest-rate [24] At the Eastern Economic Forum in Vladivostok on September 5, President Putin defended the Russian Central Bank’s exceptionally high interest rate from criticism of other state bankers and Russian businessmen. “The Central Bank is working to curb this inflation and bring it back to the well-known and necessary target of no more than 4–5 percent. But this requires keeping the key rate high, which raises concerns for those engaged in real production. Many people here in this hall will no doubt say: ‘This is unacceptable, it is impossible, the key rate must be sharply reduced.’ But if that happens, prices will only rise further. So the only thing I can say is this: I want to assure you that Russia’s financial authorities – the Government of the Russian Federation and the Central Bank – are acting professionally. We have always, and I want to stress this, always proceeded from the principle that a stable macroeconomic policy is the foundation for developing the Russian economy and, consequently, the social sphere. We have pursued this course for many years, at least a decade and a half, and it has consistently delivered positive results, creating the conditions for the country to move forward. I am confident this will be the case again… [Question:] German Gref says he has noted signs of technical stagnation in the Russian economy. Do you agree with this? Vladimir Putin: No… He knows this well. We maintain constant contact. He regularly participates in our meetings, including those I hold with the Government and the Central Bank. Some members of the Government share his opinion, mainly because the Central Bank is holding the rate high to combat inflation…We can discuss anything but I do not want to give assessments now. I have my own view, of course, but let me refrain from evaluating the Central Bank’s work. Let me note instead that our Central Bank is highly respected across the international finance community. This is first-hand information. The Central Bank’s policy is deliberate. In 2023, Russia’s GDP grew by 4.3 percent; and in 2024, by 4.4 percent. At the same time, inflation rose, too. We need to address macroeconomic challenges and ensure a soft, smooth landing of the economy to stabilise key macroeconomic indicators and slow down price growth. Yes, I know the debates very well: we discuss this daily. Just yesterday we were talking about this. Some experts believe that the economy has cooled down, but lending has not stopped. Ask Mr Gref himself: has lending stopped? No. The pace has slowed down, yes. I know some industries are going through rough times, and people present here also understand this very well. However, everyone also understands that nothing good will happen if inflation spins out of control. It would become impossible to plan anything, not just years ahead, but even ten days ahead. This is a very delicate issue. Take banks, for example. You can ask the Chairman of VTB. He will tell you: yes, perhaps they have overdone it, maybe the economy has cooled somewhat too much. [10]”
“The main question is whether the interest rates of the Chinese banks will be lower than the Russian ones,” says Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation and the National Energy Security Fund (NWF). “If so, then, of course, it will be beneficial for Russian energy companies. They still take loans for current activities, not to mention large–scale projects.”
And there are large projects for which money is needed. After the expected signing of the contract, Gazprom will soon face the task of financing the construction of a new gas supply route to China via the Power of Siberia–2 pipeline, which is being called the largest cost-effective project in the gas sector. In addition, Gazprom needs to increase production by 8 billion cubic meters of gas in order to meet the required increase in supplies via the Power of Siberia-1 and the Far Eastern route, as recently agreed by the parties. Rosneft continues to build Vostok Oil.
MAP OF RUSSIAN GAS PIPELINES TO THE EAST, INCLUDING POWER OF SIBERIA-2
[25]According to Yushkov, “if OPEC+ continues to increase production quotas, it will be necessary to increase the cost of developing new fields and increase production costs in old fields, where the quality of the resource base is deteriorating. Therefore, Russian energy companies have a need for cheap money, and the question is whether China is ready to provide debt financing on favourable terms for them. So far, this has not happened.”
“It is logical for a number of companies to continue part of their borrowings in Russia, as they have low dependence on external channels, but diversification of capital sources is always preferable for large projects, especially export-oriented ones. And borrowing in Russia is expensive now, although the rate is decreasing,” says analyst Vladimir Chernov from Freedom Finance Global. In his opinion, companies with significant revenue and contracts in China, such as Rosatom (through non-sanctioned entities), Gazprom or Novatek, will be among the first candidates for the purchase of panda bonds.
It is interesting how Western and Chinese rating agencies view Russian energy companies in diametrically opposite ways. “The western agencies classify Russian bonds as speculative because sanctions and lack of access to clearing formally increase the default risk. The Chinese agencies look at it differently. Gazprom is a strategic partner for China, not an issuer with technical limitations,” notes Khandoshko. Therefore, it has a high rating in China; so too Atomenergoprom, a subsidiary of Rosatom; Novatek; and Zarubezhneft.
“At the same time,” she believes, “the key point is that China still does not allow the Russian Ministry of Finance to place money on the domestic market. And while this restriction is in effect, it is premature to talk about Russia’s full-fledged entry into the Chinese borrowing market. Panda bonds should be considered as an addition, not a substitute for domestic borrowings.”
[26]“There remain risks in the form of secondary sanctions, high operating costs and settlement difficulties. In addition, investors demand a premium for political risks. Risks can be minimized through subsidiaries or non-sanctioned entities; through obtaining a local Chinese credit rating with extensive information disclosure and legal guarantees. Settlements and clearing are likely to be carried out entirely in yuan through Chinese banks to minimize the involvement of Western intermediaries. But, in my opinion, none of these techniques provides a 100% guarantee against secondary sanctions, but they do reduce the likelihood,” Chernov concludes.