Russia’s dependence on China deepens
As Russia’s invasion of Ukraine falls into a quagmire, so its dependence of China is deepening. In the first half of this year, China accounted for 40 per cent of its imports and over 30 per cent of its exports.
The U.S. says that, among its exports, China is supplying machine tools, explosives technology and other items used by Russia’s military production. Beijing denies this, saying that it does not supply arms to either side in the war.
Since Vladimir Putin began his full-scale invasion of Ukraine in February 2024, he has, according to Ukrainian figures, lost 610,000 dead and wounded. In a single 24-hour period this week, the Russian army lost 1,250 men, the Ukrainian government said.
To make up for these colossal losses, Putin announced this week an autumn mobilisation of 133,000 men. In the draft 2025 budget announced last Monday, defence and security account for 40 per cent, more than all of education and social welfare combined.
Since the West imposed sanctions on Russia after the start of the invasion, Chinese products have flooded in to replace those from Europe, the U.S. and Japan. Most visible are cars like Chery, Geely and Haval, which have replaced Renault, Volkswagen and Hyundai on city streets.
In 2023, Chery sold 220,000 vehicles worth 5.8 billion euros to Russia, an increase of 400 per cent over the year before. Of the 50 largest foreign firms in Russia, 11 are Chinese, including construction giant CRCC, Hisense, Huawei and the automakers, up from one in 2022.
Last year Sino-Russian trade reached a record US$240 billion. In the first eight months of 2024, it was US$158.5 billion, an increase of 1.9 per cent year-on-year.
In September, the U.S. said that China is directly helping the Russian military. Deputy Secretary of State Kurt Campbell told journalists in Brussels: “Beijing is giving Moscow very substantial help to beef up its war machines and, in return, Russia is handing over its closely guarded military technology on missiles and submarines.
“These are not dual-use capabilities. These are basically being applied directly to the Russian war machines. These are component pieces of a very substantial effort on the part of China to help sustain, build and diversity various elements of the Russian war machine. We are seeing efforts at the highest levels of both governments to try to both hide and protect certain elements of this worrisome collaboration.”
Washington has imposed sanctions on Chinese companies selling equipment to Russia, which it believes could aid the war effort.
China denies assisting the Russian military. "The U.S. should stop indiscriminate unilateral sanctions and long-arm jurisdiction," Foreign Minister Wang Yi told U.S. Secretary of State Anthony Blinken at a meeting in Laos on July 27.
"China is opposed to being smeared and to false accusations being made against it, does not accept pressure and blackmail, and will take resolute and forceful measures to safeguard its major interests and legitimate rights," he said. "China’s position on the Ukrainian issue is candid, and we will continue to promote peace talks between Russia and Ukraine."
From October 22 to 24, President Xi Jinping will meet Putin at the BRICS summit in Kazan, Russia. In a message to Putin this month, Xi said China was "ready to join Putin to constantly expand all-round pragmatic cooperation between [our] two countries.”
A Western diplomat said Beijing neither wanted Russia nor Ukraine to have a clear victory in the war. “Its best outcome is a peace which it brokers itself or a long war that weakens Russia and the West. Both spend billions of dollars on a war with no economic return. This will help the rise of China as a superpower.”
So far China has skilfully avoided major sanctions against its large firms for their trade with Russia. A major reason why the rise in trade this year has been slow is the reluctance of large Chinese banks to finance bilateral trade.
In December 2023, the U.S. Treasury Department was given authority to impose secondary sanctions on third-country entities that assist Russia’s military-industrial base.
“Foreign banks, primarily those from China, Turkey, Armenia and Kazakhstan, have increasingly refused to accept payments from Russia,” said a report last month by the Centre for Eastern Studies in Poland.
“The restrictions have primarily affected small and medium-sized Russian companies. Large businesses, with their extensive legal and accounting resources, continue to find new channels for international settlements. The Chinese yuan has become the principal settlement currency for Russia’s foreign trade and the sole reserve currency for the Central Bank of Russia,” it said.
Both Moscow and Beijing strongly hope for a victory by Donald Trump in next month’s Presidential election. Since he is pro-Putin, he is likely to end or limit U.S. aid to Ukraine and, at the same time, end restrictions on China’s trade with Russia.
Does the future of the world lie in the hands of the American voters?
-
AI cannot replace human teacher Dr. Winnie Tang
In her speech at the Esri Young Scholars Award Presentation Ceremony (“Esri Ceremony”) recently, the Permanent Secretary for Education, Michelle Li mentioned that the Government attaches great
-
Cooling the city with integration of science and technology Dr. Winnie Tang
Hong Kong is still enduring the heat during late October. Among us, the life of more than 200,000 residents living in subdivided units must be even more miserable. Under global warming, how to cool
-
The Perils of Insincere Flattery Brian YS Wong
I had the fortune of receiving an email, whose name shall not be specified. It was sent to me by a journal with a suspicious title and publisher, with three paragraphs of copious praise piled onto me
-
Hong Kong Ballet’s new Butterfly Lovers & Gala Kevin Ng
Hong Kong Ballet’s second programme this season was the premiere of “The Butterfly Lovers’ choreographed by Ricky Hu, the company’s choreographer-in-residence, and his wife Mai Jingwen. This new work
-
Hong Kong: A Tale of Three Cities? Michael Chugani
It is eye-opening to see Hong Kong from both within and from afar. Doing that can make a single city morph into a tale of three cities. In one tale, all of Hong Kong’s freedoms are intact. In the