How China and Russia are growing even closer, economically and militarily
- Not only is trade expanding between the two economies, they are moving to reduce US dollar exposure, as Russia continues to combat Western sanctions
- The recent Vostok 2022 drills and the remarks of Beijing’s No 3 official on his visit to Russia are also signs of closer ties
As the most recent customs data indicates, for the first eight months of 2022, Russian exports to China grew by 50 per cent to US$72.9 billion (energy commodities traditionally constitute more than 75 per cent of Russian deliveries to China), while imports from China increased by 8.5 per cent to US$44.2 billion; clearly, Russian energy deliveries are a key factor in the record increase in bilateral trade. China accounted for 25 per cent of Russia’s total imports in 2021, while in 2002 it had just a 5 per cent share.
Along with expanding trade, Moscow and Beijing are seeing closer relations in other areas. On September 1, it was reported that Moscow is considering purchasing US$70 billion in yuan and other “friendly” currencies to prevent the rouble from surging further. Such a plan marks a shift from the decades-long economic policy of accumulating savings in US dollars and euros, which proved ineffective for Russia when US$300 billion of its foreign reserves was frozen around late February.
During a plenary session of the Eastern Economic Forum in Russia’s eastern city of Vladivostok last week, President Vladimir Putin made a point of highlighting the independence of Sino-Russian relations from the West. Specifically, he noted that China would pay Gazprom half in roubles and half in yuan.
The forum was first held in 2015 as a mark of Russia’s pivot to the East, after its relations with the West started to decline in 2014. Unlike in previous years, the forum was not attended by a prominent leader from the Asia-Pacific this time.
Also notable is how this year’s forum shows the growing distance between Russia and the West. The largest foreign delegations were from China, India, South Korea, Armenia, Mongolia and Myanmar, while many African states participated for the first time. Furthermore, Russia has announced a second Russia-Africa summit, scheduled for mid-2023; the first such summit was held in 2019.
Despite the stated purpose of the Eastern Economic Forum, it cannot avoid high politics entirely. Last week, Putin took to the podium to reprimand the West for causing the current headwinds buffeting the global economy. He said: “I am referring to the Western sanctions frenzy and the open and aggressive attempts to force the Western mode of behaviour on other countries, to extinguish their sovereignty and to bend them to its will.”
After speaking to Putin in Vladivostok, Li travelled to Moscow, where he met Federation Council chairwoman Valentina Matviyenko and State Duma chairman Vyacheslav Volodin. Russian state news agency TASS reported Li as saying during his visit that China fully understands all the measures taken by Russia to protect its interests in Ukraine. He added that Beijing would provide assistance to Moscow when it comes to the protection of core interests; he also blamed the US and its allies for encircling Russia and instigating the crisis.
Danil Bochkov is an expert at the Russian International Affairs Council