Beijing is to extend nearly $11bn to two Russian state entities that are under western sanctions. The renminbi-denominated funds allow the Russian counterparties – the Russian Direct Investment Fund, a $10bn sovereign fund, and Vnesheconombank, Russia’s state development bank – to escape possible penalties under US sanctions for dollar transactions, the Financial Times reports. The funding was announced after Russian president Vladimir Putin met his counterpart Xi Jinping in Moscow on Tuesday. The funds from Beijing’s state-run China Development Bank are the fruit of years of efforts by Moscow to attract funding for private industry in Russia. Western corporate lending has fallen dramatically after recession and US and EU sanctions. CDB is to create a Rmb68bn fund with RDIF, which invests in Russian private equity projects with foreign partners. The joint fund will invest primarily in Russia-China cross-border projects as part of Xi’s One Belt One Road initiative and Putin’s Eurasian Economic Union, said Kirill Dmitriev, RDIF’s chief executive.