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Sanctions have forced Russia to rely heavily on China to keep its economy afloat.
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China ships high-tech products to Russia and buys Russian oil cheaply—a combination that strengthens Beijing’s influence.
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As China’s economic influence has grown, Russia’s role has been reduced to that of a secondary partner.
Moscow’s wartime pivot to Beijing helped Russia’s economy remain stable under the weight of sweeping Western sanctions, but it came at a cost.
Today looks like a lifeline that could allow Moscow to serve as Beijing’s junior economic partner for a long time. A report released on Friday by the Atlantic Council, a think tank, said Russia currently relies heavily on China to provide key manufactured goods and advanced inputs that have been hampered by Western sanctions.
“Economically and politically, Russia’s relationship with China is both deeply asymmetrical and mutually beneficial,” wrote Elina Ribakova, non-resident senior fellow at the Peterson Institute for International Economics, and Lucas Risinger, economic analyst and non-resident fellow at the Kyiv School of Economics.
China buys Russian oil at a discount, in quantities that offset lost European customers, while Russia buys machinery, vehicles and electronics from the East Asian giant amid Western boycotts and sanctions.
“This is a complete and embarrassing reversal from the 2000s, when Russia exported higher value-added goods to China,” the analysts wrote.
Since Russia’s full-scale invasion of Ukraine in February 2022, the Kremlin has steered the country’s economy into a wartime state. Substantial defense and government spending has helped maintain revenue resilience despite sanctions and export restrictions.
But as energy export revenues plummet in a low oil price environment, cracks are emerging. While inflation remains high, consumer demand has also weakened.
At present, China accounts for a large share of Russia’s imports, and the vast majority of its trade with China is settled in RMB.
In 2023, Russia will become China’s largest crude oil supplier, but the country only accounts for one-fifth of China’s crude oil imports. At the same time, oil and gas revenues account for one-third of Russia’s budget inflows.
To be sure, China’s vast manufacturing industry needs global buyers, and Russia has become one of them. Still, the gains are “much more important to Russia than to China,” analysts wrote, because Beijing is not as dependent on Moscow as Europe is on Russian energy.
