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Is Russia’s economy holding up well against Ukraine-war induced sanctions? China is watching and keen to know how
- Russia’s economy appears to have defied the Western sanctions that followed its invasion of Ukraine in February 2022
- Its economic performance could offer China some insight amid its economic and technological rivalry with the West, led by the United States
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Having all majored in Russian, William Liu and his classmates from college enjoyed a bumper year in 2023 after their businesses made considerable inroads into Russia following the invasion of Ukraine a year earlier.
From machinery and cars, to medical devices and home appliances, Chinese products have flooded the vast market to the north, filling the void left by Western companies who withdrew following the outbreak of war in February 2022.
“Two years ago we were concerned about the possible colossal damage on the economy, but it turned out Russia has held up well so far,” Liu said.
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Nearly two years into the war, Russia appears to have defied the Western sanctions that could have strangled its economy.
It did suffer a mild recession, with a 2.1 per cent drop in economic growth in 2022, but it was considerably better than the contraction of between 10 and 15 per cent predicted at the start of the war.
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Moscow said its economy rose by 5.5 per cent in the third quarter of 2023 year on year, and Russia is expected to see full-year growth of 3.5 per cent.
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