Moscow’s close relationship with Beijing is causing economic strain for the Russian Federation, according to the Council on Foreign Relations (CFR). Moscow has become increasingly enamoured with Beijing, despite its strategic alignment and ‘no limits’ friendship with China.
The two nations announced a strategic partnership in early 2022, leading to a surge in trade, reaching an all-time high of $190 billion in 2022. However, the think tank argues that much of this partnership has been more beneficial to Beijing than to Moscow. China, one of Russia’s only reliable trading partners, has neglected to make significant investments in Russia, according to Thomas Graham, a distinguished fellow at the New York-based think tank.
China is prioritizing its own economic interests, using its relationship with Russia to cut off trade ties favouring it. The nation has also expanded its Asian connections, which are at Russia’s expense. China is more powerful than Russia economically and militarily, with its economy ranking as the world’s largest by real GDP and home to the world’s largest military. Moscow has been expanding its relationships with India, another top trading partner, but these are still smaller.
Russia’s economy is so dependent on China that it needs the help of the US to counterbalance it. To avoid strategic subordination to China, Russia cannot rely on inchoate multilateral groupings or transactional bilateral relations with countries weaker than itself. The only genuine option is the West, according to Graham.
Russia’s economic situation is facing a grim future, with Western economists predicting a spiraling economy due to western sanctions and the invasion of Ukraine. Putin has denied any signs of economic weakness, despite inflation accelerating above the central bank’s target rate.
Graham suggests that Putin will never acknowledge this reality due to his deeply entrenched anti-Americanism and his tight ties to Chinese President Xi Jinping. Experts warn that Russia could become China’s “vassal state” and that Western economists are not likely to acknowledge this reality.