Finance
Russia eyes China trade revival as Putin prepares for Xi summit, sources say
Published by Global Banking & Finance Review®
Posted on August 28, 2025
5 min readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on August 28, 2025
5 min readLast updated: January 22, 2026
Russia aims to boost trade with China as President Putin prepares for a summit with Xi Jinping, amid declining trade figures and economic challenges.
By Gleb Bryanski, Darya Korsunskaya, Elena Fabrichnaya and Gleb Stolyarov
MOSCOW (Reuters) -Russia-China trade, which soared to record levels as the war in Ukraine left Moscow isolated, is now falling, a trend President Vladimir Putin is seeking to reverse as he prepares for a summit with President Xi Jinping, three Russian sources said.
When Western partners cut ties with Russia after Moscow's invasion of Ukraine in February 2022, China came to the rescue, buying Russian oil and selling goods from cars to electronics that pushed bilateral trade to a record $245 billion in 2024.
Led by a slump in vehicle imports to Russia and a decline in oil exports to China, trade turnover was down 8.1% year-on-year from January to July 2025, Chinese customs data published last week showed.
While the figures partly reflect a natural correction from all-time highs, the slide is causing concern in Moscow ahead of the Shanghai Cooperation Organisation summit in China's northern port city of Tianjin on Sunday and Monday, the sources said.
"Ahead of the visit, officials on both sides are looking into ways to increase trade because the current numbers do not look good," said one person involved in preparations for Putin's trip, who spoke on condition of anonymity.
Agriculture and energy could be areas of expansion, one of the sources said.
Putin will be among more than 20 world leaders, including Indian Prime Minister Narendra Modi, to attend the forum, marking another diplomatic coup for sanctions-hit Russia after Putin's visit to Alaska earlier this month.
China is Russia's biggest trading partner and Moscow is keenly aware of its reliance on Beijing for its economy and military, according to conversations Reuters had with the sources close to Russia's government.
'ECONOMY WOULD HAVE COLLAPSED'
Strong trade volumes help Russia maintain a united front with China and promote Putin and Xi's shared world view, which portrays the West as in decline as China challenges U.S. supremacy in many areas.
Xi and Putin have met many times and signed a "no limits" strategic partnership in February 2022, just weeks before Putin sent his army into Ukraine.
When visiting the Kremlin in May, Xi told Putin their two countries should be "friends of steel", and they pledged to raise cooperation to a new level to counter U.S. influence.
But with China's economy around nine times larger than Russia's, there is no doubting who is the dominant player in the relationship, something officials in Moscow acknowledge.
China accounts for the bulk of Russia's export revenues, said a fourth source close to the Russian government, and technology supplied by Beijing has been crucial for the Russian military.
"Without them, we would not have been able to make a single missile, let alone a drone, and the whole economy would have collapsed long ago," the person said. "If they wanted it, the war would have been over long ago."
Despite the rhetoric of friendship, however, another source close to the government said Russia's biggest trading partners China and India act primarily in their own interests and that Moscow had no genuine allies.
"China does not behave like an ally," the source said. "Sometimes it lets us down and stops payments, sometimes it takes advantage, sometimes it's outright robbery, there is nothing allied about it."
China's foreign ministry said cooperation between the two countries had yielded fruitful results.
"The overall foundation of cooperation between the two sides remains solid, and the underlying trend of steady progress has not changed and will be sustained over the long term," a ministry spokesperson said. "China is full of confidence in the prospects of China-Russia cooperation."
SHORT-TERM PLANNING
While the headline fall in trade from January to July was 8.1%, some sectors experienced more significant declines, China's customs data showed.
Russia's fuel exports fell almost 20% in that period, smartphone and computer imports dropped by 27.5% and imports from China of vehicles including passenger cars, tractors and commercial trucks slumped 46% to $5.8 billion.
These were offset by a surge in low-value imports requiring simpler customs procedures and significant jumps in Russia's exports of aluminium, copper and nickel.
One of the sources said agriculture and energy projects, such as the Power of Siberia-2 pipeline, could be ways to boost trade.
However, Moscow and Beijing have been unable to agree to terms on the pipeline for years and Russia's efforts to launch exports to China of winter wheat, its main agricultural commodity, have yielded no results so far.
Russia's Industry and Trade Minister Anton Alikhanov last week blamed sanctions and volatility in commodity markets for falling bilateral trade.
"We are also seeing a gradual saturation of Chinese products in certain market segments," he told a business forum in Kazan.
That saturation is most pronounced in the car market, in which Chinese carmakers raced from a less than 10% market share in Russia before the war to commanding more than half of the market by mid-2023.
Russian carmaker Avtovaz and truckmaker Kamaz have blamed excessive imports of cars and machinery, at a time when high interest rates are squeezing demand, on slowing sales.
"Everyone has a short-term planning horizon," said one of the sources. "Needing to fill the market meant letting people buy Chinese cars, when...we could have waited just 1-1/2 years and established something from within."
Russia has achieved this in the machine tools sector, in part thanks to government support, with domestic production of machine tools rising by 137% in the three years to 2024, according to industry publication Rhythm of Machinery.
Demand for such imports from China would fall further in 2025 as Russian defence companies have successfully "re-tooled", said a source involved in Russia-China trade.
(Reporting by Darya Korsunskaya, Gleb Bryanski, Elena Fabrichnaya and Gleb Stolyarov; additional reporting by Beijing Newsroom; Writing by Alexander Marrow; Editing by Ros Russell)
Russia-China trade has fallen by 8.1% year-on-year from January to July 2025, primarily due to a slump in vehicle imports and a decline in oil exports.
Officials are looking into agriculture and energy projects, such as the Power of Siberia-2 pipeline, as potential areas for boosting trade.
China's economy is significantly larger than Russia's, which creates an imbalance in their trade relationship, with China being the dominant player.
Russia faces challenges such as sanctions, market saturation of Chinese products, and difficulties in agreeing on trade terms for key projects.
China's foreign ministry stated that the cooperation between the two countries has yielded fruitful results and the foundation of their partnership remains solid.
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