Report to Congress on China’s Economic and Trade Ties with Russia

May 26, 2022 7:16 AM

The following is the Congressional Research Service In Focus report, China’s Economic and Trade Ties with Russia.

From the report

Two developments in February 2022—the announcement by leaders of the People’s Republic of China (PRC or China) and the Russian Federation (Russia) of a strategic partnership that “knows no limits” and Russia’s renewed invasion of Ukraine with tacit PRC support—may raise new considerations for Congress about the deepening China-Russia ties. China’s trade, financial, and technology ties with Russia may affect the strength of U.S.-led efforts to constrain Russia, including through sanctions and export controls. China’s alignment with Russia also appears to be part of broader efforts to create alternative global systems in trade, finance, and technology that could intensify and challenge the liberal global economic order. Also see CRS In Focus IF12100, China-Russia Relations.

China’s Economic Ties to Russia 

An easing of trade tensions and mutual assurances on border disputes has deepened Russia-China ties and allowed both sides to focus on other geopolitical priorities. Since 2014, China and Russia have reached agreements in trade, energy, finance, technology, and aerospace, while increasing diplomatic and defense cooperation. Bilateral trade has expanded since 2014, but flows are asymmetric. In 2021, China accounted for 18% of Russia’s trade while Russia represented a 2% share of China’s trade. China’s share of Russia’s trade has steadily grown from 11% in 2013, largely at the expense of the European Union (EU).

Russia provides China strategic exports, including energy, fertilizer, and metals (e.g., gold, nickel, titanium, and platinum). China has been increasingly turning to Russia for crude oil, natural gas, and coal, and Russia could become a more important supplier of wheat and fertilizer as China faces shortfalls. After Russia’s 2022 invasion of Ukraine, China lifted import restrictions on Russian wheat. China exports to Russia machinery and electronics ($28.8 billion), followed by base metals ($5.7 billion), textiles and apparel ($5.4 billion), and vehicles, ships, and aircraft ($5.0 billion). The war could deepen bilateral ties if Russia’s access to global markets further deteriorates, and if China looks to Russia to address global shortages. Disruptions in Ukraine likely affect China’s access to agricultural products (e.g., corn, sunflower oil, and pork). China had turned to Ukraine to diversify away from U.S. exports and is now seeking alternative suppliers. Given its outsized role as a buyer, China could crowd out countries seeking scarce food and energy.

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