Russian President Vladimir Putin and China’s President Xi Jinping make a toast during a reception following their talks at the Kremlin in Moscow on March 21, 2023.
PAVEL BYRKIN/SPUTNIK/AFP via Getty Images
Russian imports of Chinese cars rocketed 543% in the first half, local media reported.
Russia now gets 70% of its imported cars from China, compared with just 10% prior to the Ukraine war.
That highlights Russia’s growing economic dependency on China – thanks to Moscow’s deepening from the West.
Russia’s deepening economic and political isolation from the West is dramatically reshaping its business and consumer landscape.
The biggest theme to emerge amid Moscow’s struggles with Western sanctions, slapped in response to its war on Ukraine, is probably the Eurasian nation’s growing economic dependency on China – for everything from selling oil to buying consumer goods.
Russia is now the world’s No. 1 buyer of Chinese cars, after western manufacturers such as General Motors, Ford, and Mercedes-Benz exited the country in response to the war.
The figures for Russia’s 2023 automobile imports from China are striking. Inbound shipments of Chinese cars saw a stunning 543% surge in the first half to $4.6 billion in value, from the same period of 2022, the Russian news website RBC reported this week, citing figures from the Chinese customs department.
Before the Ukraine war, Chinese cars made up just 10% of Russia’s car imports, according to the report. But now, seven out of 10 cars shipped from abroad come from China, RBC said, citing data from Russia’s Federal Customs Service.
Last year, the European Union issued a ban on the export of “luxury” cars to Russia, defined as vehicles worth over €50,000 ($54,900). Having once been an important trading partner for Putin – 38% of Moscow’s 2021 trade was with the bloc – Russia has been forced to look elsewhere for business partners.
“The retreat of Western auto brands from the Russian market has left a niche for Chinese players to fill in,” Cui Dongshu, secretary general of the China Passenger Car Association, said in a recent interview with the Global Times newspaper.
Russia’s economy continues to take a beating as it reckons with a dwindling list of countries it can trade with. As it grapples with a collapse in the current account balance and a plunging ruble, President Vladimir Putin is becoming increasingly reliant on his “no-limits” friendship with Chinese counterpart Xi Jinping.
The rise in automobile trade is one of several aspects of Russia’s growing reliance on China. Last year, trade between the two UN Security Council members reached a record $190 billion, and this figure continues to rise. Xi has not publicly condemned Russia’s war on Ukraine and continues to ramp up trading ties with Moscow.