China limits exports to Russia amid fear of Western sanctions
China fears becoming too economically close to Russia. Data recently published by Chinese customs indicates that in March 2024, exports to Russia were 14 percent lower than a year ago, and in April, they were 13 percent lower.
Since Russia invaded Ukraine, China has been trying to balance between the parties involved in the conflict. A report by the Polish Economic Institute shows that Beijing is limiting its activities to avoid falling victim to Western sanctions.
China restricts exports to Russia. They fear sanctions
This does not mean, however, that relations between Beijing and Moscow have frozen. As reported in the latest issue of the PIE weekly, Vladimir Putin's visit to China on May 16-17, 2024, was a demonstration of cooperation between Beijing and Moscow.
Trade data, however, shows that Chinese exports to Russia have recently decreased due to Western sanctions. Data recently published by Chinese customs indicates that in March 2024, exports to Russia were 14 percent lower than a year ago, and in April, they were 13 percent lower.
This is primarily due to China's fear of American sanctions on banks involved in selling goods to Russia that are subject to restrictions.
Simultaneously, Russian sales to China continue to grow. According to Chinese data—the only ones available since Russia stopped publishing statistics—in April, they were 17 percent higher than a year ago. Between 2021 and 2023, Russia's exports to China increased by 62 percent. This is primarily due to increased deliveries of Russian oil and gas.
However, recent declines in trade with Russia do not significantly reduce the scale of economic cooperation. Exports of products from China to Russia reached a value of CAD $150 billion in 2023, the highest in history. This is a 47 percent increase compared to 2022 and a 65 percent increase compared to 2021.
Russia seeks other partners
According to estimates from the German Ifo Institute, China mainly delivers sanctioned goods from Europe and the USA. In the first half of 2023, their share in the import of sanctioned goods was 57 percent. The attempt to find more effective cooperation mechanisms in fear of American sanctions is evidenced by the fact that along with Vladimir Putin, the heads of the economy, defence, and central bank departments appeared in Beijing, writes the author of the study.
There are also many indications that pressure from the West is yielding results. The study's author writes that the war has led to the geographical reorientation of Russia's trade. Before the full-scale invasion, EU countries were the largest recipients of Russian exports, accounting for about 38 percent of supplies. At that time, about 16 percent of exports went to China. The war has reversed these proportions.
As reported, in 2023, EU countries accounted for about 14 percent of Russia's exports, while China accounted for 37 percent. Meanwhile, Russia's share in Chinese exports increased from 2 percent in 2021 to 3.3 percent in 2023. This also illustrates the strong asymmetry in economic relations between Moscow and Beijing.
More evidence supports this thesis. According to Mikhail Krutikhin, a Russian energy expert, the Power of Siberia 2 gas pipeline project, pushed by President Vladimir Putin, did not meet with enthusiasm from the Chinese side during the recent meeting of the leaders of both countries in Beijing, reports The Moscow Times.
