In two years, trade volume between China and Russia has increased by over 60%, aiding Russia's military-industrial complex in acquiring necessary equipment for its aggressive war in Ukraine.
According to Chinese customs data released on July 12, trade volume between China and Russia grew by 4.6% in the first half of 2024 compared to the same period last year. Bilateral trade between the countries continues to rise, reaching 143.9 billion yuan ($19.81 billion) last month, a 2.3% increase from 140.7 billion yuan in May.
Trade between China and Russia is not only bilateral. Central Asian countries and Belarus also expand Kremlin's access to dual-use technologies, reflected in growing trade statistics. The involvement of Western companies in this trade is a critical issue, requiring strict scrutiny and tough measures for direct sanctions evasion and supply chain negligence.
In two years, Russia surpassed Germany, Australia, and Vietnam in trade volume with China, reaching $240 billion in 2023. China benefits from discounted Russian oil and other goods, while Russia gains access to a wide range of consumer and high-tech products.
CSIS analysts report that Beijing's share of Russian machine tool part imports, which was 32% in 2022, rose to 80-90% in 2023. Additionally, 90% of Russia's metalworking machine imports last year came from China.
"Only with China's support has Russia been able to wage its aggressive war in Ukraine as it does," said Mareike Ohlberg from the German Marshall Fund's analytical center in an interview with IPPEN.MEDIA.
"Together with Russia, China forms a united front against the US, NATO, and thus Europe. That's why China won't abandon Russia. There is no public evidence that Beijing supplies lethal weapons to Russia, but the export of dual-use goods impacts Moscow's ability to continue the war. This prevents shortages, maintains high political support for the war by stabilizing living standards, and enhances military capabilities."
According to Bloomberg, countries continuing business with Russia face increasing US pressure, mainly through the threat of secondary sanctions. In June 2024, the US expanded its criteria for defining Russia's military-industrial base for secondary sanctions, complicating trade between Russia and China.
Despite this, China has become Russia's main trading partner, with the yuan accounting for about 40% of Russia's export-import payments and over half of its foreign exchange market turnover. The scale of Russia's yuanization is impressive, given it started almost from scratch at the beginning of 2022, before Russia's full-scale invasion of Ukraine. In the long term, this will undermine Russia's sovereignty and make it completely dependent on China, which is testing its payment systems in Russia and adapting them to mitigate the impact of Western sanctions.