China tightens grip as Russia’s war economy turns east

Russia’s much-vaunted “no-limits” partnership with China is becoming increasingly lopsided, with Moscow now heavily dependent on Beijing for energy sales, technology and financial survival as the Ukraine war grinds on.

Ahead of a fresh summit between Russian President Vladimir Putin and Chinese leader Xi Jinping in Beijing this week, the balance of power is shifting sharply east. China is no longer just Russia’s strategic partner. It is becoming the dominant force inside the Russian economy.

War Sanctions Push Moscow Into Beijing’s Orbit

Western sanctions have cut Russia off from major technology markets, banking systems and industrial suppliers since the 2022 invasion of Ukraine. The result has been a dramatic economic pivot toward China.

Russian exports to China have nearly doubled since the war began, reaching roughly $129 billion in 2024. Most of it is discounted oil, gas and coal — the raw materials keeping the Kremlin’s war machine funded.

At the same time, China has flooded Russia with machinery, electronics, vehicles and dual-use technology. Analysts say Beijing now supplies around 90% of Russia’s sanctioned technology imports, including components critical for missile and drone production.

The Yuan Replaces the Dollar

The financial shift has been just as stark. After Russian banks were cut from SWIFT and hundreds of billions in reserves were frozen, Moscow accelerated efforts to abandon the dollar.

More than 99% of trade between Russia and China is now settled in rubles or yuan, according to Russian officials. But that escape route comes with a price. Russia is increasingly exposed to Chinese lending conditions, currency shortages and Beijing’s political priorities.

The Kremlin may have escaped Western leverage only to trade it for Chinese dependence.

Energy Pipelines Deepen the Imbalance

Putin is expected to push hard for progress on the long-delayed Power of Siberia 2 gas pipeline during talks in Beijing. The project would lock tens of billions of cubic metres of Russian gas into the Chinese market each year.

For Beijing, the pipeline strengthens energy security at a time of rising global tensions. For Moscow, it risks cementing a future where Russia’s economy survives largely on terms dictated by China.

That leaves the Kremlin in an increasingly uncomfortable position: fighting a war against Western influence while drifting deeper into Beijing’s shadow.

How China became the new master of Russia's economy