Going Steady: China and Russia’s Economic Ties are Deeper than Washington Thinks

Natalia Chabarovskaya

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Executive SummaryTrade cooperation between China and Russia has grown in tandem with anti-Russian sanctions and tensions with the West. A common border, economic compatibility, shared geopolitical perspectives and joint opposition to the US have encouraged bilateral relations.

Since its full-scale invasion of Ukraine Russia has been increasingly isolated economically, mainly due to Western sanctions, forcing it to rely heavily on China.

The two countries have orchestrated unprecedented levels of coordination through trade in energy resources, electronics, chemicals, and transportation components.

The relationship is unbalanced because Moscow is more dependent on Beijing than Beijing is on Moscow. A “reverse Nixon” strategy by the West — building relations with Russia to wean it off China — is unlikely to succeed because the economic ties are so important to both countries.

Russia is becoming increasingly interconnected with China throughthe use of the Chinese Yuan. A significant sharing of national currencies between the two powers is reflective of their economic ties, and the use of services like China’s UnionPay cards has helped embed the Yuan in Russia’s economy.

While Moscow and Beijing have deepened collaboration, Chinese investors have reduced engagement in Russia due to the risk of Western sanctions. Investment patterns show that while Russia and China are valuable to each other, their economic relationship is not fully unified.

Introduction

The China-Russia partnership has strengthened since the full-scale invasion of Ukraine in 2022, with their economic cooperation expanding steadily at a time of massive Western sanctions against Moscow. Unlike Russia’s deteriorating relationships elsewhere, its strategic alignment with Beijing remains close, and is built on more than a decade of deliberate economic and geopolitical rapprochement. The two countries’ synergy stems from naturally complementary economic systems, shared geoeconomic goals, and mistrust toward the West.