Russia owns $140 billion in Chinese bonds, which could help it skirt Western sanctions, analysts say

• Russia owns about $140 billion in Chinese bonds, per estimates by analysts cited by Bloomberg.
• The yuan debts are held by the Bank of Russia and the National Wealth Fund, the analysts said.

Russia's central bank and sovereign fund own about $140 billion in Chinese bonds, according to estimates by the Australia and New Zealand Banking Group, or ANZ, which were cited by Bloomberg.

This could be used to cushion the blow from the sanctions Western nations imposed on Russia after it invaded Ukraine, analysts at the group said in a report Wednesday.

The estimates suggest that the Central Bank of Russia could hold about $80 billion of yuan debt and the National Wealth Fund could own $60 billion, Bloomberg reported.

Russia's $140 billion in bonds makes up almost a quarter of all foreign ownership in China's domestic bond market, the analysts wrote, according to Bloomberg.

Western nations have tried to tank the Russian economy by imposing huge financial sanctions after Russia invaded Ukraine. Actions so far have included blocking transactions from the country's central bank, barring Russian aircraft from their airspace, and banning some banks from using SWIFT.

But as other countries cut ties with Russia, China has said it opposes Western sanctions, and it appears unwilling to criticize Russia over the invasion.

"Russia's China bond holdings and CNY could be major foreign assets and currency that Russia can access," the ANZ analysts wrote in the report, according to Bloomberg. "We are watching if Russia will liquidate the assets if CNY cash is needed to meet other payment obligations."

It added that Russia could use both its yuan assets and China's SWIFT alternative for cross-border transactions to lessen the impact of some sanctions.