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The 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 its oil cheaply — a combination that boosts Beijing’s leverage.
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Russia’s role has been reduced to a junior partner as China gains economic influence.
Moscow’s wartime pivot to Beijing helped keep Russia’s economy afloat under the weight of heavy Western sanctions — but at a cost.
What looks like a lifeline today could lock Moscow into a long-term role as Beijing’s junior economic partner. Russia is now heavily dependent on China for key manufactured goods and advanced inputs blocked by Western sanctions, according to a report by the Atlantic Council, a think tank, published on Friday.
“Economically and politically, Russia’s relationship with China is simultaneously deeply asymmetric and mutually beneficial,” wrote Elina Ribakova, a non-resident senior fellow at the Peterson Institute for International Economics, and Lucas Risinger, an economic analyst and non-resident research fellow at the Kyiv School of Economics.
China buys Russian oil in volumes that compensate lost European customers – at a discount – while Russia buys machinery, vehicles, and electronics from the East Asian giant amid Western boycotts and sanctions.
“This is a complete and embarrassing reversal in the relationship compared to 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 kept the country’s economy in a state of war. Strong defense and government spending helps sustain top-level resilience, despite sanctions and export restrictions.
But cracks are emerging as energy export revenues have fallen sharply in a low oil price environment. Consumer demand has also weakened amid still high inflation.
China now accounts for a large share of Russia’s imports, and the vast majority of its trade with China is settled in the Chinese yuan.
Russia became China’s top crude oil supplier in 2023, but the country accounts for only one-fifth of China’s imports of the commodity. Meanwhile, oil and gas revenues account for a substantial third of Russia’s budget inflows.
To be sure, China needs global buyers for its massive manufacturing sector, and Russia has become one of them. Still, the achievements are “much more important for Russia than for China,” as Beijing does not depend on Moscow the way Europe has stolen on Russian energy, the analysts wrote.