China-Russia trade hits snag amid US sanction threats
Bloomberg reported in March that Chinese exports to Russia fell by 16 percent this year, marking the first significant drop since mid-2022. This decline is attributed to growing threats of US sanctions against Beijing in retaliation for its military support of Russia.
5:34 AM EDT, April 19, 2024
Bloomberg noted that Russian President Vladimir Putin is expected to discuss ways to increase Chinese exports during a May visit to Beijing. A source close to the Kremlin suggests that the Kremlin views this downturn as merely temporary.
Trade between China and Russia experiences downturn
Officials close to US President Joe Biden, as quoted by CNN, believe that China's support is enabling Russia to boost its defensive industrial base substantially. This support is regarded as Russia's most significant military production expansion since the Soviet era, consequently bolstering its capabilities in the conflict with Ukraine.
This support is said to include machine tool production, drone engine manufacturing, transfer of anti-ship missile technology, microelectronics, and nitrocellulose, which is crucial for weapon fuel production. Notably, in 2023, about 90 percent of Russia's microelectronics imports from China went towards missiles, tanks, and aircraft production.
By the end of the previous year, the trade volume between Beijing and Moscow reached $240 billion.
However, there may be emerging strains in the Sino-Russian partnership. In April, Chinese banks dramatically increased their blockade of Russian payments for electronic assembly components. This concerns the so-called 'kits' comprising processors, casings, screens, and other essentials needed for manufacturing, such as missiles. Additionally, it was uncovered in March that Chinese banks were refusing payments for Russian transactions in yuan.
