On a state visit to China this week, Russian Prime Minister Mikhail Mishustin signed various pacts on deepening investment cooperation in trade services and exporting more Russian agricultural products to China. Bilateral trade, he said, would reach or exceed $200 billion this year.
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While China is Russia’s largest trading partner, Russia is a small market for China. Exports to Russia in 2022 accounted for just 2 percent of China’s total exports, though they are on the rise. April’s exports of $9.62 billion were a 153 percent increase from the year before.
“China-Russia ties are growing but in the grand scheme of things, they remain pretty small,” said Agathe Demarais, global forecasting director at the Economist Intelligence Unit in London.
“Russia has lost access to its largest energy market, which was Europe, and high-tech products, [and] car parts from Western countries and what we see is that China is not fully making up for that. It’s helping but it’s not a magic fix,” she said. China also faces U.S. export controls to restrict its access to high-tech chips.
Trade between the two countries has long been dominated by energy, machinery, electronics and more recently cars and other transportation equipment, with China basically trading its machines for Russia’s oil and gas.
For the first quarter of this year, machinery and electrical equipment accounted for 60 percent of China’s exports to Russia, while energy and mineral resources accounted for 79 percent of China’s imports from Russia.
Bilateral trade increased more than 30 percent in 2022 to reach $190 billion, mostly as a result of Chinese purchases of Russian oil, gas and coal.
But other non-energy categories, from beer and seafood to industrial machinery, cars and appliances, are increasing too. In April, exports of cars and auto components rose more than 500 percent from a year ago to $2 billion.
Chinese brands, from condiments to appliances, are increasingly appearing in Russian supermarkets. Trade in household items grew, with mattress sales jumping 256 percent to $2.1 million and exports of washing machines rising 534 percent to $28 million. Chinese shipments of seafood also increased more than 300 percent to $15 million.
Still, attracting private Chinese businesses to the Russian market will be difficult. Worries about the Russian economy and the possibility of secondary sanctions have already put off Chinese investors.
“China-Russian economic and trade exchanges are more politically oriented, with mainly state-owned enterprises leading the way,” said Wan Qingsong, a research fellow at the Center for Russian Studies of Shanghai-based East China Normal University.
“Private companies are less motivated to tap that market due to a lack of immediate returns. When there’s not enough investment, China and Russia will find it hard to go beyond what they have now,” he said.
The fact the trade boom is driven by external crisis also underlines its fragility, Wan said.
Expanding Russia-China economic ties would represent a shift in a relationship that has chiefly been about political alignment against the West.
“The trade side of the relationship has always lagged behind the strategic relationship, but since the war the trade side really has accelerated,” said Joseph Torigian, an assistant professor at American University in D.C. who researches China and Russia.
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For China, bolstering the economic relationship could have a downside of complicating efforts to appear neutral on the Ukraine war while also supporting Moscow. In recent months, Beijing has tried to present itself as a potential peacemaker in the conflict.
Following Mishustin’s visits, English-language articles in the state-run Global Times stressed that China-Russia cooperation “has nothing to do with the Ukraine crisis.”
“For the Chinese, it’s kind of a double-edged sword in the sense that they want to benefit from the economic trade, but at the same time they want to be careful about not allowing this trade relationship to lead to conclusions in places like Europe that the Chinese are directly enabling Russian aggression,” said Torigian.