Trade relations between Russia and China: Declining trust

Trade relations between Russia and China: Declining trust

China remains Russia's key trading partner, but economic rapprochement between the two countries is showing signs of stagnation. According to the Russia Capital report, Chinese investors have sharply scaled back their activities in Russia. This development is particularly notable given the ongoing geopolitical tensions and associated sanctions imposed on Russia following the Ukraine war. These sanctions have made the Russian economy increasingly dependent on China, so that over a third of Russia's total foreign trade is now conducted with China.

The decline in trade is significant. In the period from January to April 2025, trade turnover between the two countries fell by 7.5% to $71 billion. In 2024, bilateral trade reached a record high of almost $245 billion, with China exporting around $115.5 billion in goods to Russia and imports from Russia remaining almost stable at $129.3 billion. As Telepolis reported, this decline is related to various factors, including increasing skepticism among Chinese investors towards the Russian market.

Challenges for Chinese investments

Alexander Gabuyev from the Carnegie Center in Berlin cites several reasons for the decline in Chinese investment. A key problem is Russia's poor reputation, which is exacerbated by a lack of investment protection and an unclear regulatory framework. Experts also express concerns about the level of information available to Chinese companies about the Russian market and its potential. The last significant Chinese investment exceeding $100 million was in 2021, when Sinopec invested $360 million in Russia.

The reluctance is understandable, considering the current geopolitical developments. Western countries and the US Treasury Department are warning about the consequences of business relationships with Russia, especially in the energy sector. Janet Yellen has already made threats against Chinese companies that support Russia in the Ukraine conflict.

Insight into the trading market

Despite the challenges and concerns about future Western sanctions, demand for Chinese goods remains strong in Russia. There is particular growth in electronics and transport vehicles, partly driven by reduced alternative options on the Russian market. However, the delivery of passenger cars from China to Russia is declining. In April 2025, the value of these exports fell by 16.2% to $507 million, and in the first four months of the year, Chinese car exports halved to $1.86 billion.

But not all areas are affected by declines. Shipments of automotive parts from China to Russia rose 4.4% to nearly $754 million in the same period. Zhou Liqun, chairman of the Association of Chinese Entrepreneurs in Russia, sees potential for trade turnover of $300 billion in the next two to three years if challenges such as insolvency and sanctions are addressed.

Given current developments, experts predict slower trading growth in 2025, while some optimistic voices such as Montufar-Helu continue to believe in potential growth in trading volumes.

The balance between China and Russia remains complicated. Despite the difficulties, there are trends towards further financial integration, including the use of national currencies. Nevertheless, it remains to be seen whether economic relations can overcome the current hurdles.

For detailed information about the trade relations between the two countries, we recommend taking a look at the reporting from Russia Capital and Telepolis.