Russia may be celebrating its “borderless” partnership with China — a phrase coined when President Vladimir Putin and Xi Jinping met shortly before the war in Ukraine. Many Russian-Chinese analysts believe that Beijing’s influence over Moscow is likely to grow further in the coming years. Putin is keen to push ahead with new pipeline projects that would further boost Russia’s export revenues to China. Increasing the capacity of Russia’s pipeline to China “would significantly increase Beijing’s oil security in the event of a Taiwan conflict,” Joseph Webster, a senior fellow at the Atlantic Council, wrote in a post on Substack on Sunday.
Webster was referring to China’s repeated threats to invade Taiwan, a move that could bring Western sanctions on Beijing or even a US naval blockade that disrupts China’s offshore oil imports. The Kremlin is particularly interested in finalizing construction of the Power of Siberia 2 gas pipeline, which could transport up to 50 billion cubic meters of gas per year to China via Mongolia.
The project remains stalled due to disagreements over pricing and technical details. Beijing’s desire for reliable onshore energy supplies has been heightened by disruptions in the Strait of Hormuz during the war with Iran. But any progress on these plans would further tie Russia’s energy future to China, reinforcing Beijing’s influence over Moscow. While bilateral trade eased last year as a result of lower oil prices, Russia’s exports of goods to China have almost doubled since February 2022, when the Russian invasion of Ukraine began.
BALANCE SHEETS BETWEEN COUNTRIES
In 2024, Russia shipped roughly $129 billion (€111 billion) worth of goods to China, the vast majority in crude oil, coal and natural gas sold at deep discounts. The Center for Research on Energy and Clean Air estimated that China has purchased more than €319 billion (€372 billion) of Russian fossil fuels since the start of the conflict, giving Moscow significant financial leverage to finance its military amid Western sanctions. In return, China has exported nearly $116 billion worth of goods to Russia, supplying machinery, electronics and vehicles that replaced Western suppliers that withdrew from the Russian market.
Although Beijing has not directly exported military equipment to Russia, China has supplied Russia with civilian products and technologies that also have military applications. These have also helped support Russia’s defense industry. This growing imbalance leaves Moscow increasingly vulnerable to Beijing’s priorities.
WHY IS RUSSIA INCREASINGLY DEPENDENT ON CHINESE TECHNOLOGY?
Western sanctions, imposed since 2022 and steadily tightened, have cut off Russia’s access to advanced Western technology. The United States, the European Union, the United Kingdom and allies banned exports of semiconductors, microelectronics, precision machine tools and other dual-use goods for weapons production. These moves created acute shortages in Russia.
In response, Moscow turned to China, which, according to Bloomberg, supplied roughly 90% of Russia’s sanctioned technology imports in 2025 – up from 80% last year.
Obtaining goods like machinery for assembling missiles and drones is much more difficult and expensive than before the war. Russia has to use complex networks through third countries and often ends up paying for products at nearly 90% above pre-war prices. Bloomberg reported last year that Beijing has provided Russia with intelligence for Earth observation, military satellite imagery and drones. Chinese technology has enabled Russia to sustain and even expand production of missiles, drones and other weapons, keeping the war economy running.
TRADING WITH THE YUAN
As the war in Ukraine continues, the US, the EU and its allies have cut major Russian banks off the SWIFT payment system and frozen roughly $300 billion of Russia’s central bank reserves held abroad. This has made transactions in dollars or euros risky or impossible for Russia. The move has also exposed foreign banks, individuals and entities around the world to secondary sanctions if they continue to do business with sanctioned Russian entities. In response, Moscow and Beijing have accelerated so-called de-dollarization, the shift away from the use of the US dollar towards their own national currencies.
According to Russian Finance Minister Anton Siluanov, by the end of last year, the two countries were conducting over 99% of their bilateral trade in rubles and yuan.
This trend has been reinforced by the BRICS group of emerging economies, which is promoting payments in local currencies among its nearly a dozen members. There are even plans for a single BRICS currency. However, yuanization, as it is called, has created new dependencies. Russia now faces periodic yuan shortages, higher borrowing costs and must tolerate Beijing’s dominance in all bilateral negotiations. China is not trying to replace the dollar overnight, but a more widely used yuan increases Beijing’s global economic influence. Countries that hold or borrow in yuan become more closely tied to China’s economy and policies. (DW)