The West was an ideal economic partner for Russia, offering both advanced technologies, capital, and ample demand for Russian natural resources.
Only after China’s rapid growth in the 2000s did the People’s Republic become a viable economic alternative. At first, China mainly provided Russia with inexpensive consumer goods. However, as Chinese industries became more technologically advanced, it evolved into a complementary partner for many sectors of the Russian economy. The start of economic cooperation between China and Russia was initially slow due to Moscow’s deep-seated scepticism towards Beijing. However, the construction of a major oil pipeline in the late 2000s led to a rapid increase in trade turnover between the two countries. China’s insatiable demand for natural resources from Russia, as well as its increasingly sophisticated export offerings, resulted in a flourishing trade relationship in the 2010s.
Simultaneously, Russia underwent a significant shift in its foreign policy, as its relations with the West became more strained in the late 2000s. Following Russia’s annexation of Crimea and its covert war in Donbas, conflicts dominated its relationship with the West. While these conflicts were not the sole reason for the increasingly warm political ties between China and Russia, they did accelerate the deepening of the partnership. In early February 2022, shortly before Russian President Vladimir Putin ordered the full-scale invasion of Ukraine, a joint Russian-Chinese statement described the bilateral relationship as a ‘limitless friendship.’
Initially, the new political reality post-2014 did not result in a complete shift of Russia’s economic dependencies to the East – despite a first round of Western sanctions. While Putin and Xi publicly praised the successes of Sino-Russian cooperation at every one of their regular meetings, Russian companies continued to rely on Western technologies and focused on European markets. China’s economic significance for Russia was growing gradually; however, Russia was still much more dependent on Western economies in almost every aspect of its economic life.
All of that changed with Russia’s full-scale invasion of Ukraine, which marked a turning point in both Russia relations with the West and Russia’s relations with China. Although the West’s sanctions on Russia do not extend to all forms of economic cooperation, a fundamental “decoupling” of Russia’s economy from the West has begun. Against this background, cooperation with China has become vital for large parts of the Russian economy as well as the political regime in Moscow. The new significance of China goes much further than just an increase in trade, which is itself impressive.
China is the only major industrial nation that still trades with Russia largely without restrictions. The volume of exports to Russia is significant, as many of the sophisticated goods that Russia obtains from China, such as machinery, electronics, or vehicles, cannot be imported from anywhere else. Additionally, in certain aspects China’s yuan and financial infrastructure have replaced the Western financial system for Moscow. Beijing’s conduct towards Russia has also become a model for non-Western nations seeking to remain neutral in the conflict between the West and Russia.
