Contents
China is helping Russia to continue its war against Ukraine
The ongoing war in Ukraine aligns with Beijing’s interests as it presents a challenge to the West, diverts its attention, drains its resources and fuels internal divisions. China’s support for Russia is driven by their shared opposition to the West and the fact that Russia’s war-related setbacks force the Kremlin to accept terms of cooperation more favourable to China. We assess that China’s current stance on supporting Russia is driven by the belief that the Putin regime should not lose the war.
At the start of Russia’s invasion of Ukraine, China faced challenges in finding a balance between its partnership with Moscow and engagement with the West. However, China has demonstrated a capability to adapt its foreign policy in a manner that aligns with its strategic interests. While Beijing fully supports Moscow, it has taken measures to conceal the most sensitive details of this cooperation, thereby achieving a degree of success in evading secondary sanctions. At the same time, China has been projecting an image of a neutral country interested in a peaceful resolution of the conflict on the global stage.
China and Russia are strengthening their military cooperation. China’s provision of essential dual-use equipment and technologies is enabling Russia to reconstitute and develop its military capabilities, thereby maintaining the initiative on the battlefield and the war of attrition. This arrangement almost certainly is mutually beneficial, as it allows Russia to manufacture necessary armaments domestically, while China is avoiding criticism and sanctions that it could face if it openly supplied weaponry to Russia. This cooperation also allows China to acquire Russian technologies. Over the decades China has increased its efforts to modernise the defence industry and has become increasingly capable of independently producing advanced fighter jets, warships, and other key military equipment. However, China’s defence industry still relies on Russian-made engines for its aircraft. Beijing is also interested in other areas related to advanced military technologies.
China still values its political and economic relations with the West and in order to maintain these ties, Beijing is concealing its cooperation with Russia’s military industry. China portrays that it is restricting the collaboration of some Chinese private companies with Russia’s defence industry, but it is highly likely that those restrictions are only imposed on the cases that become public and harm China’s international reputation.
Trade between China and Russia is on the rise, helping Moscow to mitigate the impact of sanctions and sustain its economy. Since Russia’s full-scale invasion of Ukraine, trade volumes between China and Russia have grown, with the annual growth rate amounting to approximately 30 percent. Russia is importing goods from China that have become unavailable due to sanctions, including cars, industrial and agricultural equipment, and electronics. Russia’s major exports to China primarily consist of raw materials and agricultural products.
Energy cooperation between the two countries is also intensifying, which is helping Russia to compensate for lost sanction related revenues from energy trade. Since the beginning of the war, Russia has become China’s primary oil supplier, delivering crude oil to China at discounted prices. In addition, China has been increasing its imports of Russian natural gas via pipelines by approximately 20 percent annually and expanding liquefied natural gas transportation through the Arctic, where it has invested in Russian projects. This cooperation model is beneficial to China as it allows the country to acquire cheaper energy resources, expand its interests in the Arctic, and force Russia to assume greater commitment to projects developed jointly.
Chinese financial institutions help to support the stability of Russia’s financial system. By integrating Russian banks into its CIPS (Cross-Border Interbank Payment System), China has provided a crucial lifeline to Russia, following its disconnection from the SWIFT system. Since the start of the war, there has been a significant surge in the use of the yuan for bilateral transactions. Russia conducts about a quarter of its settlements with third countries through Chinese banks using the yuan.
Political ties between China and Russia are becoming increasingly institutionalised, enabling both countries to expand and strengthen their cooperation. Since the war in Ukraine began, Chinese President Xi Jinping and Putin have had two state-level meetings, along with numerous other meetings on the sidelines of international forums. During these meeting both leaders always referred to the necessity of strengthening bilateral relations in security, defence, transport, finance, trade, energy, technology, education, and other areas. Meetings between lower- level Chinese and Russian officials responsible for policy implementation are also becoming more frequent and regular. China and Russia undoubtedly coordinate and support each other’s interests in the UN, BRICS, the Shanghai Cooperation Organisation, and other international organisations. International events organised by China serve as an international platform for Russia.
China highly likely will alter its opinion on the war in Ukraine in the near term, which is the basis for its decision to support Russia. As a result, the nature, scope, and tactics of this support are likely to remain unchanged, thereby significantly strengthening Russia’s ability to continue the war and increasing its dependency on China.
