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- Russia’s trade with China is slowing due to market saturation, sanctions, and commodity market volatility.
- Bilateral trade surged after the Ukraine invasion but slowed to just 2% growth in 2024.
- Russia’s energy exports to China are under pressure from weaker oil prices and US sanctions.
Russia’s trade boom with China is losing steam, with a top Moscow official warning that the country’s markets are already oversupplied with some Chinese goods.
“In the current year, we are recording a certain decline in mutual trade,” said Anton Alikhanov, Russia’s industry and trade minister, on Tuesday at a business forum.
“We also note the gradual saturation of the market with Chinese products in certain market segments, as well as internal economic processes both in Russia and in China,” Alikhanov said.
Sanctions and volatility in commodity markets have also weighed on flows, he said.
From record highs to slowdown
Trade between the two countries surged after Russia’s full-scale invasion of Ukraine in 2022, as China filled the gap left by Western brands and Moscow diverted energy exports eastward.
Turnover in Russia-China trade rose 29% in 2022 and 26% in 2023, reaching a record $245 billion in 2024. But growth slowed to just 2% last year, and in the first seven months of 2025, trade fell about 8% year-on-year to $125.8 billion.
Alikhanov warned that the rapid growth of past years is unlikely to return. “In the medium term, we should expect more moderate growth rates of mutual trade than before,” he said.
Chinese companies have dominated Russia’s consumer markets, especially cars, where they quickly took the majority of new sales after Western firms exited.
But the wave of imports has also raised unease in Moscow. This year, the Kremlin increased tariffs on Chinese-made cars — a move mirroring protective trade steps in the US and Europe against Chinese overcapacity.
That step has already slowed flows: Exports of all Chinese goods to Russia dropped 8.4% in the first half of 2025.
Alikhanov suggested that future cooperation should focus less on consumer imports and more on industrial investment.
“I believe that in the long term, the most successful initiatives will be those that involve investment in joint production, technology transfer and the introduction of advanced technologies,” he said.
Russia’s energy lifeline falters
But it’s not just consumer trade that is under strain — Russia’s energy exports to China have also come under pressure due to lower global oil prices and tighter US sanctions on tankers carrying Russian crude.
That slowdown is rippling through the wider economy, with GDP growing just 1.1% in the second quarter — down from 1.4% in the first quarter and sharply lower than 4% a year earlier.
“Falling Chinese demand for Russian raw materials — particularly crude oil — has intensified fiscal pressure on Moscow by eroding the tax base tied to energy exports, a key pillar of federal revenues,” wrote Maciej Kalwasiński, a senior fellow at the China Department at the Centre for Eastern Studies in Poland, last week.
He added that the overall contraction in bilateral trade exerts a “tangible negative impact” on the Russian economy.
“This further strains Russia’s ability to sustain wartime spending, especially since Russia’s economic growth rate has slowed sharply since the beginning of 2025,” wrote Kalwasiński.
