At the same time, Russia may find a small measure of relief in the fact that it has become far less reliant on foreign loans in recent years.

Booming Russia-China trade

Under the Chinese president Xi Jinping, China has strengthened its ties with Russia in sectors including energy, aviation, telecommunications, and media industry. In 2021, the countries’ bilateral trade hit a record high of $146.9 billion. Energy and agricultural products, including wheat, are among the biggest Russian exports to China.

Alongside that growing trade, Russia has also shifted away from the use of US dollars in its trade with China, instead increasingly preferring to use the yuan as settlement currency (included under “other” in the chart below), as well as the euro. According to Chinese state media, the yuan accounts for about 17% of trade settlements between the two countries.

Meanwhile, Russia is the biggest recipient of loans from China’s official sector institutions including state-owned policy banks, according to international research lab AidData. Those policy banks may continue lending to Russia as they are more insulated from western sanctions, say analysts.

📬 Sign up for the Daily Brief

Our free, fast, and fun briefing on the global economy, delivered every weekday morning.