Russia's best friend: China's "neutrality" in the war with Ukraine

China says it is not supplying weapons to Russia. However, it remains the most important economic partner of the occupying country.

Relations between China and Russia have significantly improved since 2014. Then, due to the annexation of Crimea and the war in eastern Ukraine, the EU imposed economic sanctions on Russia. That is why Russia announced its transition to Asia. These were not just empty words. The countries have signed a number of different agreements, mainly on Chinese investments in Russian resources, including the lucrative oil and gas sector.

In recent years, China has begun to invest in high-tech industries and use Russia's territory to transport goods to Europe and back.

In 2019, Chinese leader Xi Jinping called the Russian president "his best friend" at a summit in Moscow. In early February this year, Vladimir Putin and Xi Jinping met at the opening ceremony of the Beijing Winter Olympics. After the talks, Beijing and Moscow adopted a joint statement on their geopolitical positions and signed 15 more documents. The two leaders announced a new era in relations that "knows no borders" and "transcends political and military alliances from the Cold War era".

They also said that NATO should "respect the sovereignty, security and interests of other countries ... and show a fair and objective attitude towards the peaceful development of other countries".

On the day of the meeting, the Chinese news agency Xinhua published an article signed in Putin's name entitled "Russia and China: Strategic Partnership for the Future."

A few weeks later, Russia invaded Ukraine. Since then, China has not so publicly condemned Russian armed aggression. In early March, Chinese Foreign Minister Wang Yi called Russia "Beijing's most important strategic partner."

Wang Yi said ties with Moscow were "one of the most important bilateral relations in the world":

"No matter how dangerous the international environment, we will maintain our strategic focus and promote a comprehensive Sino-Russian partnership in the new era."

Joe Biden had a video interview with Chinese leader Xi Jinping on March 18. Afterwards, the Chinese Ministry of Foreign Affairs stated that Beijing expressed support for a diplomatic solution to the Russian aggression, but did not directly blame Moscow for the war.

Accordingly, China is trying to maintain a neutral political position. Beijing's neutral position seems to be even more pronounced after the recent EU-China summit.

The largest share of imports

China is Russia's largest trading partner. In recent years, it accounts for more than 23 percent of total Russian imports. Chinese exports to Russia in 2020 and 2021 amounted to 54.9 and 72.6 billion dollars, respectively.

In January 2022, China exported goods worth $ 7.2 billion to Russia.

The most significant items of Chinese origin in Russia coincide with what Russia generally buys the most:

Machinery, equipment and appliances - 51 percent

In particular, 22.3 percent of this group of imports are mobile phones and audio and video equipment. Another 16 percent are personal computers, laptops and components.

3.2 percent - boilers and heat regulators, 2.3 percent - pneumatic, hydraulic and electric hand tools, 2.5 percent - monitors, projectors, 2.4 percent - fittings for pipelines: taps, valves, parts.

More than two percent are bulldozers, excavators, rollers, loaders. Vacuum cleaners and cameras / camcorders participate with one percent each.

Metals and metal products - 7.5 percent

40 percent of this group consists of ferrous metal products; screws, nuts, washers, various metal constructions, profile pipes.

Almost 16 percent are hand tools (hammers, saws, axes) and kitchen utensils (spoons and forks). 13.6 percent - steel, rolled products, 9.5 percent - aluminum and aluminum products.

Textiles - seven percent

58 percent of this group consists of clothing and textiles, except knitwear. Another 18 percent are other finished products and sets of textiles (blankets, sheets, tablecloths, towels, curtains, tulle), second-hand clothes, cloths.

Chemical industry products - six percent

19.6 percent are heterocyclic compounds containing only nitrogen heteroatoms, 9.6 percent - polycarboxylic acids, 8.2 percent - antibiotics, 8.1 percent - amino compounds containing oxygen-containing groups.

Transport - 5.8 percent

More than 43 percent of this product group consists of spare parts for cars and motorcycles: gearboxes, shock absorbers, axles, brake systems, bumpers ... Another 14 percent are cars and trucks. Five percent bicycles, 3.3 percent motorcycles, mopeds.

In addition, Russia buys plastics, rubber, furniture, lighting, toys, sports equipment, footwear and accessories, and medical equipment from China.

What China buys in Russia

China also has the largest share in Russian exports - more than 14 percent. Russia sold $ 49.1 billion and $ 64.8 billion worth of goods to China in 2020 and 2021, respectively. In January 2022 - another 5.8 billion dollars.

More than half of Russia's exports (67 percent) to China are oil and petroleum products. Approximately six percent are metals and articles thereof: 57 percent copper and articles thereof, 28 percent ferrous metals, 11 percent aluminum and articles thereof.

More than five percent of exports are wood and wood products. Three percent of machines, equipment and appliances.

There is also a hidden part of Russian exports to China that includes weapons, ammunition, planes (civilian and military), as well as gas, nuclear fuels and rare compounds.

However, detailed information on the distribution of the category is not publicly available. Most goods from the hidden part of Russia are sold to Germany and Turkey.

China's position on Russia's war in Ukraine

Tighter EU sanctions have a major impact on the Russian economy, and the Kremlin itself is under unprecedented pressure from the international community. Beijing is less willing to provide political and economic support to Moscow. However, that did not stop China from diplomatically guarding its partner and promoting Russian narratives in the state and foreign media when it comes to the invasion of Ukraine.

Ukraine is not particularly impressed by Beijing's so-called "pro-Russian neutrality." For now, they are grateful that China does not provide direct or even military support to Russia. In mid-March, Russia called on China to help the war with Ukraine militarily and economically. However, Beijing has denied giving Moscow weapons.

At the same time, the Russian military is using Chinese DJI drones. Various sources have reported that DJI is blocking Ukrainian AeroScope complexes, while those bought by Russia continue to work, helping the occupiers kill Ukrainians.

The Chinese company refused to comply with the request of the Ukrainian government to block all DJI products used by Russian troops until the end of the war against Ukraine.

Chinese companies in Russia

The position of Chinese companies is also ambiguous. They mostly stay to work in Russia.

The largest Chinese smartphone manufacturers Huawei and Xiaomi continue to operate in Russia, although they have halved the number of products they ship there.

Chinese carmaker Geely is assessing the risks of working in Russia. They are not convinced that even in conditions of less competition in this economically backward country, success can be achieved.

Geely has suspended operations at its factory in Belarus, which exports to Russia. Geely Holding Group includes Geely Auto, Volvo Car Corporation, Drivetrain Systems International (DSI) - one of the world's largest transmission manufacturers, London Taxi - a manufacturer of famous London cabins. In February, Volvo announced the suspension of car deliveries to the Russian market.

Chinese internet giant Alibaba is not only ignoring Russia's war against Ukraine (he continues to work in the aggressor country). According to the Protocol, the company censors.

The profile of Ukrainian streamer Dmitry Romashko, who had more than 268,000 subscribers on AliExpress, was blocked for 30 days due to the publication of news about the aggression against Ukraine. Alibaba founder Jack Ma met regularly with Putin and during his visit in 2018 announced the launch of a special Russian branch in cooperation with local companies. The AliExpress Russia joint venture was opened together with VK Group, USM International and the Sovereign Russian Direct Investment Fund (RDIF).

In early 2022, Russian Forbes estimated the most visited market in the country, AliExpress Russia, at $ 1.9 billion, while in 2021, AliExpress Russia sold goods worth 306 billion rubles and accounted for 10 percent of the total e-commerce market.

According to the Ukrainian Forbes, all Russian partners of Alibaba have problems. RFPI found itself under US and Canadian sanctions, the leader of the VK Group, Volodymyr Kiriyenko, the son of the first deputy head of the Russian presidential administration, found himself under personal US sanctions.

As for USM, the owner of the company, billionaire Alisher Usmanov, is on the sanctions list of the USA, the EU and Great Britain.

Despite its current politically neutral position, China remains one of the most important geopolitical players in this war.

If he decides to condemn Russia's military aggression against Ukraine, it will have the greatest impact on Russia. Because China remains Russia's largest trading partner. Losing that connection is likely to hit Russia harder than any Western sanctions.

Valery Pekar believes that China should not be expected to accept either side in this conflict. However, the sanctions that the world has imposed on Russia are making Russia less and less attractive and an increasingly risky partner.

We see that, especially, in the reaction of Chinese companies. One conclusion should be drawn from this situation - Ukraine should develop diplomatic relations with China, because that could be an important trump card in case of possible conflicts with Russia in the future.