{"id":454846,"date":"2026-05-22T16:45:12","date_gmt":"2026-05-22T16:45:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/454846\/"},"modified":"2026-05-22T16:45:12","modified_gmt":"2026-05-22T16:45:12","slug":"russia-and-chinas-no-limits-trade-partnership-is-losing-steam","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/454846\/","title":{"rendered":"Russia and China\u2019s \u2018No-Limits\u2019 Trade Partnership Is Losing Steam"},"content":{"rendered":"

On his visit to China this week, President Vladimir Putin touted<\/a> Russia\u2019s \u201cno-limits\u201d cooperation with Beijing, Moscow\u2019s key trade partner and a critical economic lifeline since its rupture with the West in 2022.\u00a0<\/p>\n

And judging by the lavish welcome<\/a> the Russian leader received in the Chinese capital, one might think the relationship has nowhere to go but up.\u00a0<\/p>\n

Yet despite Putin and Xi Jinping\u2019s proclamations of an ever-deepening partnership, analysts say the two countries may be approaching the limits of what the relationship can deliver economically.\u00a0<\/p>\n

China has largely replaced Europe as a supplier of manufactured goods and a buyer of Russian energy exports since the 2022 invasion of Ukraine.\u00a0<\/p>\n

That has helped bilateral trade soar<\/a> 55% between 2021 and 2025, surpassing the two countries\u2019 shared target <\/a>of $200 billion set in 2019.<\/p>\n

Bilateral trade fell 7% to $227.6 billion in 2025, marking the first decline since the pandemic year of 2020.\u00a0<\/p>\n

Russian exports to China dropped 3.9% to $124.8 billion, while Chinese shipments to Russia fell more sharply, declining 10.4% to $103.3 billion, according to<\/a> Chinese customs data.<\/p>\n

The decline affected bilateral trade across the board.\u00a0<\/p>\n

The value of Russian oil exports to China, which account for about half of Russia\u2019s exports to the country, dropped 20%, while petroleum products fell 33% and coal declined 27%.\u00a0<\/p>\n

Chinese exports of passenger cars to Russia fell 44%, truck exports dropped 67%, telecom equipment declined 27% and computer shipments fell 31%.<\/p>\n

Analysts attributed the downturn to lower global oil prices<\/a>, China\u2019s efforts to diversify energy imports and Moscow\u2019s push for Chinese firms\u00a0 to localize production with moves like hiking<\/a> its vehicle recycling fee, a de facto tax on imported cars.<\/p>\n

This year has seen a more reassuring start to Russia-China trade, something officials in Moscow were<\/a> keen to trumpet ahead of Putin\u2019s visit to Beijing this week.\u00a0<\/p>\n

Total Russia-China trade rose 20% year-on-year in January-April to $85.24 billion. Russian exports climbed 17% to $47.7 billion, while Chinese exports rose 23% to $37.8 billion.<\/p>\n

The recovery was driven in part by disruption in Middle East energy markets caused by the Iran war effectively blocking the Strait of Hormuz, through which roughly one-fifth of global oil supplies pass.<\/p>\n

That has boosted demand for Russian crude that does not rely on the Strait of Hormuz. Russian oil exports to China surged<\/a> by 22%, while oil products increased 9%.<\/p>\n

Chinese exports also strengthened as lower Russian interest rates and a stronger ruble revived consumer demand<\/a>. Car exports nearly doubled, while telecom and computer exports both rose 21%.<\/p>\n

Another category that rose sharply was personal-use items shipped to Russia, something likely driven by China lifting visa requirements, allowing Russians to bring goods directly or through shuttle traders.\u00a0\u00a0<\/p>\n

But analysts warned against interpreting the figures as evidence of a major long-term shift.<\/p>\n

While Russia-China trade has posted strong growth in 2026, part of the rebound reflects weak comparisons with 2025, when trade volumes had already declined.\u00a0<\/p>\n

Compared with 2024, Russia-China trade in January-April 2026 grew only 10%, about half the rate implied by comparisons with last year\u2019s lower base.<\/p>\n

Russia\u2019s export gains could also fade if the global energy crisis subsides and oil prices start to fall, reducing Moscow\u2019s export revenues.\u00a0<\/p>\n

Russian oil shipments to China were already slowing down<\/a> by April to an average of 2.2 million barrels per day. That\u2019s still higher than a year earlier, but below first-quarter 2026 levels.\u00a0<\/p>\n

Meanwhile, pipeline gas exports are already running at maximum infrastructure capacity, while the long-delayed Power of Siberia 2<\/a> project remains years away from completion.<\/p>\n

And because energy accounts for nearly all Russian exports to China, Moscow has little else to offer the Chinese market.<\/p>\n

At the same time, Russia\u2019s domestic economy is showing signs of strain.<\/p>\n

The Economic Development Ministry forecasts<\/a> retail trade turnover, one of the key indicators of consumer demand, of just 0.8% in 2026, down from 4.1% a year earlier, indicating weaker consumer demand and limited capacity to absorb additional Chinese imports.<\/p>\n

Russian officials have also made clear they will continue pressing Chinese companies to localize car manufacturing, which is likely to weigh further on one of China\u2019s key export categories.<\/p>\n

\u201cOur requirements are an extremely high level of localization and standardization with other manufacturers,\u201d Deputy Prime Minister Denis Manturov said<\/a>.<\/p>\n

Given all this, analysts remain cautious about the prospects for sustained Russia-China trade momentum.<\/p>\n

\t\t\t\t\" A<\/p>\n

\t\t\t\t\t\t\t\t\tA LNG tanker Fedor Litke in the Chinese port of Nantong.
\n\t\t\t\t\t\t\t\t\t\t\t\t\tVisual China Group \/ TASS<\/p>\n

Economist Andrei Gnidchenko of Moscow-based analytical center CMAKP said trade growth was likely to slow in the second half of 2026 as China accumulated energy reserves and economic activity in both countries remained subdued.\u00a0<\/p>\n

He estimated<\/a> total trade would end the year only 5% to 10% above 2025 levels, or roughly the same as 2024.<\/p>\n

Reflecting on the January-April data, the Kommersant business daily also cautioned <\/a>against expecting \u201cbreakthrough growth\u201d to continue, noting that the biggest trade boost had already happened after 2022.\u00a0<\/p>\n

Moscow-based businessman Andrei Kogan, who works with Chinese firms, said<\/a> Russian exporters faced intense competition in China beyond the energy sector.<\/p>\n

\u201cChina\u2019s high-tech and consumer markets are already occupied by domestic manufacturers, so for Russian companies the focus is more often on niche projects, cooperation or localization, rather than direct large-scale exports,\u201d he said.<\/p>\n

Alexander Gabuev, director of the Carnegie Russia Eurasia Center, said<\/a> China was seeking to diversify energy imports rather than become too dependent on Russia, while the Russian market itself was nearing \u201csaturation\u201d for Chinese industrial goods.<\/p>\n

\u201cAfter all, Russia is not a very rich country with a population of 145-150 million, depending on how you count,\u201d Gabuev said in a recent podcast. \u201cIt is definitely not the size of the European Union, ASEAN or the United States for Chinese producers.\u201d<\/p>\n

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