With a length of 4,209 km, China and Russia's shared land border is the sixth-longest international border in the world. China is a resource-hungry nation with a sizable developing market that consumes copious amounts of agricultural products, energy, and raw materials, all of which are resources that Russia possesses.
Vladimir Putin, the president of Russia, traveled to China to attend the Winter Olympics in Beijing twenty days prior to his country's invasion of Ukraine. About 15 cooperation agreements in the most crucial areas of trade, investment, anti-monopoly, satellites, and digitization were signed during the visit between the two nations. Lifting China's import restrictions on Russian wheat and barley due to concerns about the presence of fungi is one of the agreements.
And everyone started to wonder if China could be the potential savior to ease the sanctions against Russia in light of the massive sanctions imposed on it after the invasion of Ukraine.
In 2020, the volume of trade between Russia and China amounted to about 94.5 billion dollars, while in 2021 there was an increase of about 36 percent in the volume of trade exchanges, which amounted to 147 billion dollars. In Putin's recent visit to China, a goal was set to increase the volume of trade between them to reach 250 billion dollars by 2025.
The energy sector accounts for a third of all trade between China and Russia; as a result, Russia is China's second-largest supplier of energy after Saudi Arabia. Additionally, 5% of all-natural gas consumed in China comes from Russia. Additionally, China, the world's largest coal consumer, is the biggest purchaser of Russian coal, it imports 15 percent of its needs from Russia. China and Russia reached an agreement on a new coal purchase agreement worth more than $20 billion a week before Russia invaded Ukraine. China currently represents the largest market for Russian energy exports overall. Russia imports parts for automobiles, computers, smartphones, and other devices from China, according to the Peterson Institute for International Economics, and purchases 70% of its semiconductors from that country. Looking at the Russian smartphone market, we can see that the Chinese smartphone oligopolies control about 60% of the market.
China's relationship with Russia changed dramatically after the war, and Russia was waiting for its Chinese ally to help lift Western sanctions.
Chinese institutions won't deal with them because they will be subject to American sanctions if China facilitates transfers to Russian banks as an alternative to the SWIFT system. Because of this, Chinese banks left Russia or stopped doing business there after the war. Out of concern for possible sanctions, some Chinese banks have decided to halt all lending and to stop doing any business involving the purchase of Russian goods. One of the trade arteries between Russia and China was damaged because coal was at the top of this list of commodities.
Because of the threat of sanctioning these businesses, the Chinese government cannot force Chinese banks or technology firms with operations in Russia to conduct business with Russia. These firms also recognize that the West can provide them with more than what the Russians can, such as cutting-edge machinery and technologies.
Thus, there is no choice for Chinese companies to continue their business with Russia or make new investments.
