Will China-Russia trade keep skyrocketing as Ukraine war drags into 2024?

But questions remain over how high their bilateral trade could be this year, and whether China could be targeted by Western countries for providing Russia with a lifeline.

It was about 36 per cent of the trade value between China and the US during the same period, although Beijing possesses a huge trade surplus across the Pacific as it exports significantly more than it imports.

Chinese shipments to Russia jumped by 46.9 per cent year on year to US$111 billion in 2023, while imports grew by 12.7 per cent to US$129.1 billion.

China’s car export to Russia grew by fivefold to about 800,000 units last year, accounting for about one fifth of its total vehicle exports.

Sink or swim: China watches on as Russia’s economy battles Western sanctions

“The [Ukraine] war and [Western] sanctions accelerated trade,” said Aleksei Chigadaev, a former visiting lecturer in comparative area studies at the Higher School of Economics in Moscow.

Russia needs China’s help to replace brands that have withdrawn, while its exports to China would also grow, he added.

Information from the Spanish financial company BBVA showed that China would continue to export cars and machinery equipment to Russia, and receive commodities and natural resources in return.

“I do believe the prosperity of China-Russia trade relationship will sustain in 2024,” said Dong Jinyue, a senior economist at BBVA Research, estimating a 25 per cent rise in bilateral trade volume this year.

“Russia has to transfer most of its import demand and export supply from Europe, the US and other countries – which were allies – to China.

The US and European Union have imposed more sanctions on Russia, with the war in Ukraine set to enter its third year.

The latest sanctions were announced in December, as Group of 7 (G7) leaders imposed a direct ban on Russian diamonds, effective from the start of January.

Beijing is also facing the risk of secondary sanctions, with some Chinese manufacturers already blacklisted for their involvement in Russian affairs.

“A big part of Russian exports are mineral resources, including oil, gas and timber,” Chigadaev added.

China imported 79.8 million metric tonnes of crude oil from Russia in the first 11 months of last year, up by 22.2 per cent from a year earlier.

“Obviously, the commodity nomenclature can be expanded with agricultural products, [such as] fertilisers,” Chigadaev said.

Test to ‘no limit’ ties as China wields ‘bargaining power’ over Russian pipeline

Russian news agency Tass reported on Thursday that Russian manufacturer Uralchem Group had signed a memorandum of understanding to supply 600,000 tonnes of fertiliser to China’s Xinjiang Golden Pomegranate Agricultural Import and Export over three years.

Chigadaev said that the European Union and the US could start negotiations with China to increase economic pressure on Russia, but they have to “offer something in return”.

“For example, [easing] sanctions against Chinese companies in the EU and US,” he added.

“But for now, the possibility of this option is at a minimum.”