Despite facing economic sanctions from the West, Russian companies are experiencing a boon in business thanks to lucrative trade agreements with China.

Growing Business Opportunities

Reports indicate that certain Russian firms have witnessed a doubling of business activities since the onset of the Ukraine invasion in February 2022. Notably, a logistics company operating in the China-Russia border region has reported a significant increase in operations following the departure of Western companies from the country two years ago.

Energy and Automotive Sectors

China’s increased purchase of Russian energy resources has led to reciprocal trade dynamics, with Chinese firms supplying machinery and vehicles to Russian counterparts. Chinese automakers have played a pivotal role in revitalizing Russia’s automotive market, contributing to a surge in vehicle sales from less than a million in 2022 to 1.06 million in 2023. Car exports to Russia from China have seen a remarkable sevenfold increase.

Shift in Market Dynamics

The once-dominant presence of European brands like Volkswagen, Renault, and Stellantis in Russian dealerships has been supplanted by a focus on Chinese brands such as Geely and Chery. Salespersons attest that Chinese vehicles are more profitable amid limited alternatives in the market.

Strengthening Russo-Chinese Economic Partnership

The deepening economic ties between Moscow and Beijing reflect the robust “no-limit” partnership amid the ongoing conflict in Ukraine. Moreover, the surge in Russia-China trade, which has soared by 64% to $240 billion since Russia’s military intervention in Ukraine, underscores the resilience of both nations against Western sanctions.

Vital Support for Putin’s Administration

China’s economic backing has provided crucial support to Vladimir Putin’s administration, particularly as he seeks reelection for another presidential term. This support serves as a significant factor in maintaining Putin’s political stability amidst external pressures.

Risks and Concerns

While the economic alliance between Russia and China appears robust, experts caution against the underlying risks associated with Russia’s increasing economic dependence on China. The possibility of sanctions extending to Chinese companies poses potential vulnerabilities for both nations.

Kremlin’s Response

Kremlin spokesperson Dmitry Peskov downplays concerns regarding economic reliance on China, emphasizing the longstanding objective of enhancing bilateral trade and economic cooperation between the two nations, which predates the Ukraine conflict.