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Putin to meet Xi at summit in northern China

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Russia-China trade turnover down 8% from January to July

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Slide in trade from record highs causing concern in Moscow

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China crucial for Russian military tech, says Russian

source

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Agriculture and energy projects could be ways to boost

trade

By Gleb Bryanski, Darya Korsunskaya, Elena Fabrichnaya and

Gleb Stolyarov

MOSCOW, Aug 28 (Reuters) - Russia-China trade, which

soared to record levels as the war in Ukraine left Moscow

isolated, is now falling, a trend President Vladimir Putin is

seeking to reverse as he prepares for a summit with President Xi

Jinping, three Russian sources said.

When Western partners cut ties with Russia after Moscow's

invasion of Ukraine in February 2022, China came to the rescue,

buying Russian oil and selling goods from cars to electronics

that pushed bilateral trade to a record $245 billion in 2024.

Led by a slump in vehicle imports to Russia and a decline in

oil exports to China, trade turnover was down 8.1% year-on-year

from January to July 2025, Chinese customs data published last

week showed.

While the figures partly reflect a natural correction from

all-time highs, the slide is causing concern in Moscow ahead of

the Shanghai Cooperation Organisation summit in China's northern

port city of Tianjin on Sunday and Monday, the sources said.

"Ahead of the visit, officials on both sides are looking

into ways to increase trade because the current numbers do not

look good," said one person involved in preparations for Putin's

trip, who spoke on condition of anonymity.

Agriculture and energy could be areas of expansion, one of

the sources said.

Putin will be among more than 20 world leaders, including

Indian Prime Minister Narendra Modi, to attend the forum,

marking another diplomatic coup for sanctions-hit Russia after

Putin's visit to Alaska earlier this month.

China is Russia's biggest trading partner and Moscow is

keenly aware of its reliance on Beijing for its economy and

military, according to conversations Reuters had with the

sources close to Russia's government.

'ECONOMY WOULD HAVE COLLAPSED'

Strong trade volumes help Russia maintain a united front

with China and promote Putin and Xi's shared world view, which

portrays the West as in decline as China challenges U.S.

supremacy in many areas.

Xi and Putin have met many times and signed a "no limits"

strategic partnership in February 2022, just weeks before Putin

sent his army into Ukraine.

When visiting the Kremlin in May, Xi told Putin their two

countries should be "friends of steel", and they pledged to

raise cooperation to a new level to counter U.S. influence.

But with China's economy around nine times larger than

Russia's, there is no doubting who is the dominant player in the

relationship, something officials in Moscow acknowledge.

China accounts for the bulk of Russia's export revenues,

said a fourth source close to the Russian government, and

technology supplied by Beijing has been crucial for the Russian

military.

"Without them, we would not have been able to make a single

missile, let alone a drone, and the whole economy would have

collapsed long ago," the person said. "If they wanted it, the

war would have been over long ago."

Despite the rhetoric of friendship, however, another source

close to the government said Russia's biggest trading partners

China and India act primarily in their own interests and that

Moscow had no genuine allies.

"China does not behave like an ally," the source said.

"Sometimes it lets us down and stops payments, sometimes it

takes advantage, sometimes it's outright robbery, there is

nothing allied about it."

China's foreign ministry said cooperation between the two

countries had yielded fruitful results.

"The overall foundation of cooperation between the two sides

remains solid, and the underlying trend of steady progress has

not changed and will be sustained over the long term," a

ministry spokesperson said. "China is full of confidence in the

prospects of China-Russia cooperation."

SHORT-TERM PLANNING

While the headline fall in trade from January to July

was 8.1%, some sectors experienced more significant declines,

China's customs data showed.

Russia's fuel exports fell almost 20% in that period,

smartphone and computer imports dropped by 27.5% and imports

from China of vehicles including passenger cars, tractors and

commercial trucks slumped 46% to $5.8 billion.

These were offset by a surge in low-value imports requiring

simpler customs procedures and significant jumps in Russia's

exports of aluminium, copper and nickel.

One of the sources said agriculture and energy projects,

such as the Power of Siberia-2 pipeline, could be ways to boost

trade.

However, Moscow and Beijing have been unable to agree to

terms on the pipeline for years and Russia's efforts to launch

exports to China of winter wheat, its main agricultural

commodity, have yielded no results so far.

Russia's Industry and Trade Minister Anton Alikhanov last

week blamed sanctions and volatility in commodity markets for

falling bilateral trade.

"We are also seeing a gradual saturation of Chinese products

in certain market segments," he told a business forum in Kazan.

That saturation is most pronounced in the car market, in

which Chinese carmakers raced from a less than 10% market share

in Russia before the war to commanding more than half of the

market by mid-2023.

Russian carmaker Avtovaz and truckmaker Kamaz have blamed

excessive imports of cars and machinery, at a time when high

interest rates are squeezing demand, on slowing sales.

"Everyone has a short-term planning horizon," said one of

the sources. "Needing to fill the market meant letting people

buy Chinese cars, when...we could have waited just 1-1/2 years

and established something from within."

Russia has achieved this in the machine tools sector, in

part thanks to government support, with domestic production of

machine tools rising by 137% in the three years to 2024,

according to industry publication Rhythm of Machinery.

Demand for such imports from China would fall further in

2025 as Russian defence companies have successfully "re-tooled",

said a source involved in Russia-China trade.