How China is helping Russia build weapons for the war in Ukraine

The Russian arms industry is growing despite the West's sanctions regime. Russia imports the materials and machinery it needs – largely from China. An analysis in graphics.

There is no question that the Chinese and Russian presidents get on well. Since Vladimir Putin attacked Ukraine, their relationship has only improved. Putin's visit to Xi Jinping last week showed this once again. Two years ago, when Western countries imposed new sanctions against Russia, China stepped into the breach as a supplier. Last year, the volume of trade between the two countries amounted to around $240 billion. This was 26% more than in the previous year.

China's government says it is against unilateral sanctions, and maintains a normal trade relationship with Russia. After all, it notes acerbically, unlike the U.S., China is not sending lethal weapons to one of the warring parties.

Beijing's aid is more indirect

In fact, China has supplied Russia with hardly any Chinese-made weapons or ammunition since the start of the war in 2022. Beijing's help is more indirect. However, China does supply the belligerent country with a large number of machines and components that can be used to build weapons. These are goods such as electronics, machinery and building materials that can be used both in the civilian sector and in the defense industry.

These so-called dual-use goods are increasingly becoming the focus of efforts by the U.S., the EU, the U.K. and Japan to weaken the Russian war machine. According to a calculation by the Financial Times, around 60% of the dual-use goods Russia imported last year came from China.

A look at China's foreign trade statistics shows the extent to which exports of these goods slumped in the first few months after the Russian invasion of Ukraine. But by July 2022, China was already supplying them again in the same volume as before the war, and it even increased its exports again at the beginning of 2023.

Particularly striking is the fact that between July 2022 and July 2023, China's export to Russia of modern computer numerical control or CNC machines rose sharply. These are high-precision machine tools that are essential for modern weapons production. They are used, for example, in the manufacture of gun barrels and casings, aircraft engine parts, and components for tanks and missiles.

Before the invasion of Ukraine, Beijing delivered CNC machines worth around $6.5 million to Russia. By July 2023, this figure had increased tenfold, according to the latest available customs data published by the Russian statistics office. According to this data, China replaced the EU as the main supplier of the machines after the invasion of Russian troops in Ukraine. Despite this, Russia was still receiving CNC machines from the EU worth up to $12 million a year and a half after the start of the war. Taiwan, South Korea and Japan had also exported machines worth around $40 million to Russia as of July 2023.

The Russian arms industry needs supplies

The rapid increase in trade in modern machine tools is emblematic of China's support for Russia since the start of the war. Beijing has also sold the Kremlin semiconductors, ball bearings, navigation devices and steel and iron products worth billions of dollars. Moscow also received parts for the construction of railroad lines from Beijing.

Rail lines are important for military and industrial logistics alike. Between 2022 and July 2023, railroad components accounted for 10% of imports of key goods for the Russian war economy, according to an analysis by the American Center for Strategic and International Studies.

Sino-Russian trade in key military equipment experienced a particular increase last spring. In March 2023, Xi visited his «old friend» Putin in Moscow. He presented the visit as an attempt to mediate in the war. However, a look at Chinese trade statistics shows that after Xi's return to China, the volume of goods supplied to the Russian war machine increased significantly. While it had amounted to around $5 billion in the first year of the war, it was around $7 billion in the second.

For Putin, the Chinese deliveries came at the right time. Russia was in a delicate phase of the war. The Ukrainians had the advantage, and Russian soldiers lacked equipment, ammunition and weapons.

During Putin's return visit to Beijing last week, the Russian president will have appealed for continued support for the war. But this time the situation is different. The Russian army is advancing, and the Ukrainians lack equipment. However, after months of waiting, the U.S. Congress has approved the delivery of weapons and ammunition worth over $60 billion. This will give the Ukrainian army a boost again – and Russia's war economy will have to keep up.

Russia is increasingly putting its economy at the service of the war. Although the country no longer publishes detailed information on its budget expenditures, the Stockholm International Peace Research Institute estimates that Russia's military spending has increased by almost 40% per year since 2022. This share is set to increase significantly again this year. The Kremlin is currently investing an estimated 7.5% of its gross domestic product in the army.

According to experts, Russia's defense industry now employs around 3.5 million people, which is 2.5% of the Russian population, and more than three times the number of employees working in the American defense sector.

What are the benefits of Western sanctions?

The fact that the Russian arms industry has grown so significantly raises an explosive question: How much have Western sanctions achieved? The fact that Russia can still afford the war is partially due to the fact that the economy continues to function well. The oil that Russia can no longer export to Europe is today flowing to China and India. This helps keep the war machine running.

But how can it be that even components from the EU end up in Russian weapons? This is made possible by Russia's numerous helpers. They buy the components from all over the world and sell them on to Russia. It’s not just China doing this – companies in Turkey, the United Arab Emirates, Kazakhstan and Belarus are too.

In addition, dual-use goods have only belatedly become a focus for sanctions authorities. There are still loopholes for companies and individuals to export primary products and machinery to Russia despite the sanctions.

The U.S. now wants to close these loopholes. At the beginning of May, they imposed almost 300 additional sanctions against companies and individuals who have smuggled components to Russia via third countries or which produce dual-use goods for the Russian war economy. The list includes drone manufacturers from Hong Kong, Russian import companies for electronic devices, and firms involved in the Russian bioweapons program.

China's indirect support for Russia is therefore becoming increasingly risky. But Xi and Putin appear unmoved. On Friday, May 17, Putin traveled from Beijing to the city of Harbin, a city in northeastern China with close ties to Russia. This is where the Harbin Institute of Technology is located – the ETH of China, so to speak.

This top university has been subject to American sanctions for four years. This is because it is one of the leading institutions in the field of military research. The fact that Putin is visiting the Harbin Institute of Technology, of all places, sends a clear signal: He is counting on China's support.