Russia may celebrate its “no borders” partnership with China – the phrase was coined when Presidents Vladimir Putin and Xi Jinping met just before the Ukraine war – yet these relations are becoming increasingly one-sided.
Although low oil prices resulted in a softening of bilateral trade last year, Russia’s goods exports to China have nearly doubled since February 2022, when Moscow’s full-scale offensive began.
In 2024, Russia shipped about $129 billion (€111 billion) worth of goods to China – the vast majority of crude oil, coal and natural gas sold at deep discounts.
The Center for Research on Energy and Clean Air calculates that China has bought more than €319 billion ($372 billion) of Russian fossil fuels since the conflict began, giving Moscow vital hard currency to fund its military amid Western sanctions.
In return, China exported about $116 billion worth of goods to Russia in 2024, supplying machinery, electronics and vehicles that replaced Western suppliers pulling out of the Russian market.
Although Beijing has stopped direct exports of finished military hardware to Russia, China has supplied billions of dollars worth of dual-use goods – civilian products and technologies that also have military applications. These have also helped in maintaining Russia’s defense industry.
As Putin and Xi prepare to meet for high-level talks in Beijing this week – marking the 25th anniversary of the two countries’ cooperation treaty – this growing imbalance makes Moscow more sensitive to Beijing’s priorities.
Why is Russia increasing dependent on Chinese technology?
Western sanctions, imposed since 2022 and repeatedly tightened, have disrupted Russia’s access to advanced Western technology.
The United States, the European Union, the United Kingdom and allies banned exports of semiconductors, microelectronics, precision machine tools and other dual-use goods critical to arms production. These steps created a huge shortage in Russia.
In response, Moscow turned to China, which, according to Bloomberg, is expected to supply about 90% of Russia’s approved technology imports in 2025 — up from 80% last year.
Obtaining items such as machine tools for missile and drone assembly is much more difficult and expensive than before the war. Russia must use complex piracy networks through third countries and often has to pay premiums of about 90% above pre-war prices.
Bloomberg reported last year that Beijing also provided Russia with Earth observation intelligence, satellite imagery and drones for military purposes.
Chinese technology has enabled Russia to maintain and even expand production of missiles, drones, and other weapons while keeping the war economy running.
Why are Russia, China trading more in yuan?
As the Ukraine scandal unfolded, the US, EU and allies locked major Russian banks out of the SWIFT payment system and seized about $300 billion of Russia’s central bank’s reserves held abroad.
This effectively weaponized the dollar-dominated financial system against the Kremlin, making dollar or euro transactions risky or impossible. The move left foreign banks, individuals and entities around the world facing secondary sanctions if they continued to work with sanctioned Russian entities.
In response, Moscow and Beijing accelerated so-called de-dollarization, that is, stopped using the US dollar toward their national currencies. According to Russian Finance Minister Anton Siluanov, by the end of last year, the two countries were settling more than 99% of their bilateral trade in rubles and yuan.
This trend has been reinforced by BRICS, a group of emerging economies, which promotes local-currency settlements among its nearly dozen members and has also planned a single BRICS currency.
However, Yuanization, as it is known, has created new dependencies. Russia now faces occasional yuan shortages, high borrowing costs and has to endure Beijing’s upper hand in all bilateral negotiations.
China is not trying to replace the dollar overnight, but a more widely used yuan increases Beijing’s global economic influence. Countries that hold or borrow the yuan become more closely linked to China’s economy and politics.
Is China likely to increase its economic dominance over Russia?
Many top Russia-China analysts believe that Beijing’s influence over Moscow is likely to grow further in the coming years.
During his visit this week, Putin is expected to emphasize progress on new and expanded pipelines that will further strengthen Russia’s export revenues and China’s energy security.
Boosting Russian pipeline capacity to China “would significantly enhance Beijing’s oil security in a Taiwan contingency,” Joseph Webster, a senior fellow at the Atlantic Council, wrote in a post on Substack on Sunday.
Webster was referring to China’s repeated threats to invade Taiwan, a move that could lead to Western sanctions on Beijing or even a US naval blockade that disrupts China’s seaborne oil imports.
The Kremlin is particularly keen to finalize the construction of the long-delayed Power of Siberia 2 gas pipeline, which could deliver 50 billion cubic meters of gas annually to China via Mongolia. The project is stalled due to pricing disputes and technical details.
Beijing’s desire for reliable land energy supplies has increased since the disruption of the Strait of Hormuz during the Iran war. But any success in those plans would tie Russia’s energy future to China, strengthening Beijing’s influence over Moscow.
The Putin-Xi summit comes just days after US President Donald Trump’s high-profile visit to Beijing as Washington and Beijing attempted to stabilize their ties on trade, technology and global issues after some years of ups and downs.
However, a thaw in US-China relations will not help Putin. This reduces China’s incentive to fully engage with Russia against the West, as Beijing prioritizes protecting its larger economic interests with the US and Europe.
Edited by: Srinivas Majumdaru