China and Russia Reap Rewards of Growing Partnership

In the almost 22 months since Russia’s invasion of Ukraine, Russia and China have grown closer together across a range of metrics. The two countries’ political and economic ties in particular have flourished, and amid doubts over Western resolve to back Ukraine and Taiwan, some wonder whether the wind is now at Xi Jinping and Vladimir Putin’s backs. As Kawala Xie reported for the South China Morning Post, positive Sino-Russian relations were underscored by a meeting between both countries’ heads of government this week in Beijing, during which Xi stated that developing bilateral relations was a mutual “strategic choice”

Meeting Russian Prime Minister Mikhail Mishustin in Beijing on Wednesday, Xi pledged that Beijing would continue to develop “high-level” political and economic relations with Moscow.

“Maintaining and developing China-Russia relations well is a strategic choice made by both sides based on the fundamental interests of the two peoples,” Xi was quoted as saying by the Chinese foreign ministry.

“Both sides should give full play to the advantages of political mutual trust, economic complementarity, interconnected facilities and people-to-people exchanges.” [Source]

China and Russia’s economic ties have noticeably deepened. China’s customs authorities showed that bilateral trade between both countries grew 26.7 percent year on year to over 218 billion USD between January and November. China is also now Russia’s biggest energy buyer, and last week Russia’s Gazprom set a new daily record for gas deliveries to China. Russian Prime Minister Mishustin noted that over 90 percent of this trade is now being conducted in either rubles or yuan, as Russia tries to escape its dependence on the U.S. dollar and insulate itself from international sanctions. Keith Bradsher at The New York Times described how the “biggest winners for China from the surge in trade with Russia have been its vehicle manufacturers”:

[…] Sales of luxury cars in Russia have plunged, contributing to a decline in the overall size of the country’s car market, which is now less than half the size of Germany’s. But lower-middle-class and poor Russian families, whose members make up the bulk of the soldiers fighting the war, have stepped up purchases of affordable Chinese cars, according to Alexander Gabuev, the director of the Carnegie Russia Eurasia Center.

One reason, Mr. Gabuev said, are the death and disability payments that the Russian government and insurers are making to families of Russian soldiers — as much as $90,000 in the case of a death.

[…] Russians buy almost exclusively internal combustion cars. China has a surplus of them because its consumers have shifted swiftly to electric cars.

[…] Chinese carmakers have grabbed 55 percent of the Russian market, according to GlobalData Automotive. They had 8 percent in 2021. [Source]

Increased collaboration has been documented in the context of Russia’s war against Ukraine. Recent reports have shown how Russia has used Chinese intermediaries to flout global technology bans. One New York Times investigation revealed that “China and Hong Kong supplied 85 percent of semiconductors imported to Russia from March 2022 to September 2023, up from 27 percent before the conflict, according to the Silverado Policy Accelerator, a nonprofit that studies Russian trade routes,” and one Russian ecommerce site imported 150 million U.S. dollars worth of hardware from China this year. Last month, Markus Garlauskas, Joseph Webster, and Emma C. Verges outlined for the Atlantic Council the ways in which China’s support for Russia has hindered Ukraine’s counteroffensive:

Open-source trade data suggests that a surge in imports of Chinese-manufactured goods with important military uses played a key role in Russia’s ability to shore up its defenses on Ukrainian territory and to keep them equipped and supplied to resist the counteroffensive. […] Even as weapons and ammunition pour into Ukraine from NATO countries, they are being counterbalanced by Chinese imports—not of weapons, but of materials vital for Russia’s ability to sustain its continued stubborn efforts to hold onto Ukrainian territory.

[…] Chinese-made digging and dirt-moving equipment has—literally—helped Russia entrench its forces in the Ukrainian territory it occupies. A massive increase in vehicle imports, including in super heavy trucks, has likely enabled Russia’s war industry to continue producing military vehicles that are key to maintaining combat power for a defense in depth. These Chinese vehicles also enable Russian military logistics to keep equipment and supplies moving to the front.

A huge surge in ball bearing imports from the PRC, meanwhile, has also likely enabled the production of tanks. Finally, the continued flow of silicon chips from the PRC has provided key components for Russia to restore its weapons production, enabling Russian artillery, missiles, and drones, for example, to continue raining destruction on Ukrainian counterattack forces and civilian targets alike.

Taken together, all these materials have allowed Russia to put up an effective, resilient, and multilayered defense against Ukraine’s counteroffensive. Take these away, and it is questionable at best whether Russia could have sustained its defense in depth of occupied Ukrainian territory. [Source]

The two countries have also aligned their attempts to interfere in foreign elections, according to a U.S. intelligence assessment that was declassified this week. It claimed that China and Russia, along with Iran and Cuba, had increased their efforts against the U.S. midterm elections compared to the last midterm election cycle. This week, Joseph Webster wrote in The Diplomat about China and Russia’s alignment in seeking to stack the deck in various elections this year:

[W]hile Beijing and Moscow share an interest in splitting the Western alliance, China’s desire to maintain stability in oil markets may contradict Russia’s interest in bolstering Trump’s candidacy. 

[…] The world’s two most powerful autocracies are poised to achieve some success in their respective interference campaigns. While the DPP appears likely to secure a victory in the presidential race, Beijing’s economic sanctions against Taiwan and informational campaigns on the island will likely ensure, at a minimum, that control of the legislature flips to the KMT.

[…] Both Beijing and Moscow are relying on informational and, perhaps more importantly, economic tools to weaken their opponents’ electoral prospects and, in some cases, strengthen their preferred candidates. These authoritarian influence campaigns pose thorny dilemmas for liberal democracies. [Source]

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