China-Russia trade inches up as US sanctions and payment issues strain growth

After a historic rise in trade between China and Russia last year, their energy exchanges keep slowing, and analysts point to settlement challenges

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A man browses at a market where Russian products are sold in Beijing earlier this year. Trade with China has become crucial for Russia’s economy. Photo: AFP

Published: 9:00pm, 18 Sep 2024Updated: 9:40am, 19 Sep 2024

Trade growth between China and Russia has continued to slow after a year of rapid expansion, as settlement becomes a bigger obstacle amid secondary sanctions from the United States over Russia’s war in Ukraine.

In the first eight months of the year, trade volume between the two countries was US$158.5 billion, a year-on-year increase of 1.9 per cent, according to data released by China Customs this month.

The slowing pace has occurred as some Chinese financial institutions signalled plans to limit their connections with Russia amid pressure from Washington, which alleges that China is helping Russia in its war through their closer trade ties.

Since Russia was cut off from the Swift financial messaging system in February 2022 following its invasion of Ukraine, trade with China and the Chinese yuan have become crucial for its economy.

However, in contrast to a boom last year, China’s exports to Russia were valued at US$71.91 billion in the first eight months of the year – a slight increase of 0.4 per cent from the same period in 2023.

And the value of its imports from Russia was US$86.56 billion, up 3.2 per cent.