- Some Russian companies are seeing their business boom thanks to trade with China, Reuters reported.
- Oil, logistics, and auto sectors are major beneficiaries of Beijing and Moscow’s economic alliance.
- Analysts warn of China’s potential losses if sanctions extend to companies there that do business with Russia.
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Even as the West keeps up the pressure with sanctions on Russia’s economy, some companies in the country are finding that their business is thriving under lucrative trade deals with China.
Reuters reported on Wednesday that some firms have seen business double since the invasion of Ukraine in February 2022. The report pointed to a logistics company doing business in the border region between China and Russia which has seen a big jump in activity since Western companies left the country two years ago.
As China buys more Russian energy supplies, Chinese companies are supplying Russian firms with machinery and vehicles, Reuters said.
Chinese car makers have helped Russia’s sluggish automobile market bounce back from less than a million vehicles sold in 2022 to 1.06 million in 2023, with car exports to Russia surging nearly sevenfold.
Meanwhile, Russia’s dealerships that once offered Volkswagen, Renault, and Stellantis models have shifted focus to Chinese brands like Geely and Chery, with salespeople saying that the Chinese products bring more money amid few alternatives in the country.
Beijing’s deepening economic bond with Moscow is an expression of the “no-limit” partnership the countries have touted as the war in Ukraine drags on, but also point to how the US-led alliance’s sanctions may be losing their bite over time.
Reuters said Russia-China trade has surged 64% to $240 billion since the Kremlin’s military action in Ukraine.
The support of the world’s second-largest economy has been a source of vital support to Vladimir Putin as he pursues another six-year term in this month’s presidential election.
Still, experts warn of underlying risks in Russia’s economic reliance on China, as China may have much to lose if sanctions extend to domestic companies.
Kremlin spokesperson Dmitry Peskov minimized the concerns, affirming that the two nations have pursued the objective of enhancing trade and economic ties beyond $200 billion even prior to the war.
