China's profit from the Ukraine conflict
Instead of imposing sanctions like the West, China is making use of the situation with Russia. Trade is thriving between the two countries following the war of aggression against Ukraine, not just for Russian energy exports.
While it's believed that China might help curb Russia in the conflict with Ukraine, Russia sees China as its most significant trading partner. Janis Kluge from the German Institute for International and Security Affairs shares in a study on Russian-Chinese economic relations, "Economic cooperation with China has become crucial for Russia's survival."
China is the only significant industrialized nation that has maintained trading relations with Russia with minimal restrictions. Although Chinese exports to Russia declined during March and April due to the potential threat of secondary sanctions from the US, overall trade between the two countries has risen by nearly 8% since the start of the year. In the first half of 2023, trade turnover reached a record high of $114.5 billion, with more than a third of Russian imports coming from China, as Kluge states. "Moscow's invasion of Ukraine has propelled Russian-Chinese trade to new heights."
Becoming a key supplier for Russia's arms industry
China is Russia's primary source of goods that the EU and other countries have imposed sanctions on. IFO Institute's Feodora Teti highlights in a study that over 61% of sanctioned products now come from China. "China is Russia's most critical trading partner," she notes, adding that half of all goods vital for Russia's economy or military industry are imported from China.
Vehicle parts and trucks have been recording high export numbers recently as Russian vehicle production, previously largely controlled by Western companies, has plummeted. IFO explains that the rise in China's share of imports to Russia can be attributed partly to the increase in local production in China.
Although China doesn't provide heavy weapons to Russia, the significant exports of dual-use items, which have military applications, are boosting the expansion of Russian arms production. US Secretary of State Antony Blinken expresses concern that China is Russia's primary supplier of various components essential for ammunition and rocket fuel production.
The new oil and gas supplier for China
China is Russia's largest oil supplier since the EU imposed an import ban on tanker deliveries from Russia. Russia has also become China's leading supplier of natural gas. Gazprom recently became the primary supplier of pipeline gas for China and also supplies LNG by sea.
Putin is expected to try and maintain trade relations during his visit to China. In terms of the conflict with Ukraine, both China and Russia portrayed themselves as open to negotiation. China prepared to play a constructive role, says Xi. However, it's highly unlikely that China would leverage its economic steering wheel against Russia. Kluge concludes, "It's likely that the Kremlin is more amenable to accepting increased economic isolation than shifting course. Furthermore, it's significant for Beijing for Putin to remain politically stable since Putin is currently the most pivotal figure upholding the Russian-Chinese affiliation and political instability in the closest ally could potentially impact the image of the Chinese leaders themselves."
The People's Republic has yet to confirm its attendance at a proposed peace conference in Switzerland. Putin's attendance has been moved to a Russian-Chinese trade show in the northern Chinese city of Harbin.
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Source: www.ntv.de
