China-Russia Trade Relations: An Economic Lifeline Amid Western Sanctions

China's imports from Russia saw a 4.5% increase in July, breaking a two-month decline, despite U.S. sanctions complicating trade payments. The countries are fostering closer economic ties, particularly in the energy sector. Digital assets are increasingly used in settlements to mitigate payment issues, even as China's exports to Russia decreased.

China's imports from Russia saw a significant rise of 4.5% in July after experiencing declines in the previous two months, according to customs data revealed on Wednesday. This uptick occurs despite the complications in bilateral trade payments caused by U.S. sanctions on banks.

Western sanctions have prohibited the shipment of dual-use goods to Russia, aimed at curbing its military capabilities in the war in Ukraine. However, China's commitment to maintaining business relations with Russia has provided a crucial economic lifeline to Moscow. Chinese Vice Premier Ding Xuexiang noted that the energy component of bilateral trade has surged to 38.5%.

A digital platform reported that the increased use of digital assets in cross-border settlements between Russia and China has been instrumental in mitigating payment difficulties. Meanwhile, China's exports to Russia experienced a decline of 3.7% in July, reversing the growth of 4.8% observed in June.

During the China-Russia Economic and Trade Cooperation Subcommittee meeting held in Moscow last month, Chinese Vice Commerce Minister Ling Ji emphasized the need for the two nations to expand trade in goods and services, maintain open supply chains, and enhance cooperation. The bilateral trade value rose by 3.8% in the first seven months of the year, reaching 970.9 billion yuan ($135.1 billion).

(With inputs from agencies.)