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US Secretary of State Antony Blinken’s visit to Beijing has been canceled due to the Chinese balloon flying over the United States. A lost opportunity to discuss a subject that annoys the White House more and more: that of the flourishing trade between China and Russia. In defiance of Western sanctions, including on military equipment.
Throughout 2022, Chinese state-owned defense companies delivered dual-purpose civil-military products to Russian arms manufacturers blacklisted by the United States, according to an investigation by THE Wall Street Journal. Some products shipped to Russia are incorporated directly into military equipment used against Ukraine.
The American daily scrutinized Russian customs statements, based on data provided by the American institute Center for Advanced Defense Studies. Beijing has not supplied lethal weapons to Russia, at least, nothing proves it so far, but therefore actively participates in the circumvention of sanctions. It is part of topics that were to be discussed during Antony Blinken’s visit.
China, Russia’s main source of supply
All types of products combined. Forty percent of Russian imports come from China. Beijing has become, among other things, its biggest supplier of semiconductors. Russian imports of microchips plummeted after the restrictions were put in place but picked up again in the following months. Today, they are almost back to pre-war levels.
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Global trade between the two countries exploded in 2022, it amounts to 190 billion dollars, it is 30% more than the previous year. This year, Moscow plans to surpass the $200 billion mark. Just before the start of the war in Ukraine, the two countries signed a so-called “limitless” partnership agreement.
More limits to cooperation between China and Russia?
The Kremlin insists on this limitless aspect by opportunely evoking the growth potential of bilateral trade. However, there are very clear limits set by Beijing. China refrains from helping Russia financially and militarily as it requests. She prefers to import the raw materials, oil, coal and Russian gas, which she needs. And export whatever suits him.
The number of Chinese cars sold in Russia doubled in 2022. But Chinese investment in Russia has not taken off. China remains opportunistic in its economic relationship with its neighbor and obligated. The other ceiling for Moscow is the trade imbalance. Because the relationship is clearly to China’s advantage. Russia is increasingly dependent on China, but it accounts for only 3% of Chinese trade.
Beijing also calibrates its ties with Russia by the yardstick of its economic relationship with the United States.
China sees the United States as a great rival, which it wants to overtake economically and contain in terms of influence. The strengthening of economic and diplomatic ties with Russia helps it achieve this objective, but the good health of the Chinese economy also depends on dynamic exchanges with the United States which remains, despite the technological war, its first trading partner. .
Now that the Middle Kingdom has emerged from its “zero Covid” policy and the paralysis of the economy it has brought about, its priority is to restore growth. And for that, in the immediate term, the economic relationship with the United States is much more important than trade with Russia. Here again, pragmatism prevails in Beijing.