DW: Beijing Priory How does China control the Russian economy?

Russia can celebrate its partnership “border-free” with China an invented phrase when President Vladimir Putin and Xi Jinping met shortly before the war in Ukraine. Many Russian-Chinese analysts believe Beijing's influence on Moscow will likely increase further in the coming years.

Putin is interested in pushing ahead new pipeline construction projects that will further strengthen Russia's export revenues to China.

The Russian pipeline's capacity to China “would significantly increase Beijing's oil safety in a surprise case with Taiwan”, Joseph Webster, a senior associate at the Atlantic Council, wrote in a post in Substack on Sunday.

Webster was referring to China's repeated threats to conquering Taiwan, a move that could bring Western sanctions on Beijing or even an American naval blockade that undermines China's sea oil imports.

The Kremlin is particularly interested in finalising the construction of the Power of Siberia 2 gas pipeline, which can transport up to 50 billion cubic metres of gas annually to China via Mongolia. The project remains blocked due to disagreements over technical prices and details.

Beijing's desire for reliable land energy supplies has increased following disruptions in Iran's Hormuz long-term Strait of war. But any progress on these plans will further link Russia's energy future with China, strengthening Beijing's influence over Moscow.

Although 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 attack in Ukraine began.

Bilances Between Countries

In 2024, Russia sent goods worth an estimated $1129 billion ($11 billion) to China, the vast majority in crude oil, coal, and natural gas sold at a large sale.

The Centre for Energy and Clear Air Research estimated that China has bought more than $391 billion ($372 billion) Russian fossil fuels since the beginning of the conflict, providing Moscow with significant financial means to finance its military amid Western sanctions.

In exchange, China has exported goods worth nearly $115 billion to Russia, supplying machinery, electronics, and vehicles that replaced Western suppliers who fled 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 defence industry. This growing imbalance leaves Moscow increasingly sensitive to Beijing's priorities.

Why is Russia increasingly dependent on Chinese technology?

Western sanctions, located since 2022 and constantly pressed, have cut Russia's access to advanced Western technology.

The United States, the European Union, the United Kingdom and the Allies banned exports of semi-compliance, microelectrics, precise machinery tools, and other dual-use goods for weapons production. These movements created acute shortages in Russia.

In response, Moscow addressed China, which, according to Bloomberg, supplied approximately 90% of Russia's sanctioned technology imports in 2025 from 80% last year. Taking goods as a machine for assembly missiles and drones is much harder and more costly than before the war. Russia must use complex networks across third countries and often ends up paying products of nearly 90% over pre-war prices. Bloomberg reported last year that Beijing has offered Russia intelligence for land monitoring, satellite images for military purposes and fears. Chinese technology has enabled Russia to support and even expand the production of missiles, fears and other weapons, keeping the war economy at work.

Trade with Juan

As the war in Ukraine continues, America, the EU and the allies expelled major Russian banks from the SWIFT pay system and froze approximately $300 billion from the reserve of Russia's central bank held abroad.

This has made transactions with dollars or euros dangerous or impossible for Russia. The move also exposed foreign banks, individuals and subjects worldwide to secondary sanctions if they continue to work with sanctioned Russian subjects.

In response, Moscow and Beijing accelerated the so-called de-dollatory shift from the use of the US dollar to their national currency. According to Russian Finance Minister Anton Silwanov, by the end of last year, the two countries were conducting over 99% of their bilateral trade in rubla andyuan.

This trend has been reinforced by the BRICS group of emerging economies, which promotes payments in local currency among its nearly twelve members. There are even plans for a single CLICS coin.

However, juanimation, as it is called, has created new addictions. Russia now faces occasional Yuan shortages, higher borrowing costs and must tolerate Beijing's supremacy in all bilateral negotiations.

China is not trying to replace the dollar overnight, but a more widely used Juan increases Beijing's global economic impact. Countries that keep or borrow from the jun become more connected with China's economy and policies. /DW/