Focus topics


EU trade relations limit China’s support for Russia

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  • Three diverging strategic interests shape China’s response to the Ukraine crisis:
    • 1) pursuing geopolitical alignment with Russia while
    • 2) ensuring a stable international environment to continue China’s trading interests, especially with the EU
    • 3) upholding the principle of sovereignty​
  • The incompatibility of these interests have led to a muddled response, with Beijing offering tacit support for Russia’s position while trying to detach and protect its trade relationship with key partner countries ​
  • Beijing is most likely going to soften the blow of Western sanctions against Russia through increased energy imports (both countries already agreed to build new pipelines), granting Russian companies more access to the Chinese market (e.g. an agreement for wheat), and further steps to “de-dollarize” financial ties explicitly with the aim to reduce the effectiveness of international sanctions​
  • The strategic calculus behind this support for Moscow is not of economic nature, as trade with Russia only makes up 2.4% of total Chinese trade, but is instead an ideological alignment and the hope to strengthen a relationship that helps Beijing oppose US international hegemony​
  • Beijing’s tacit support for Russia comes with a political price: Beijing’s geopolitical alignment with Russia has triggered a further deterioration of the EU’s perception of China as a security and political actor in Europe​
  • On balance, however, Chinese official remarks such as Wang Yi’s foreign policy remarks during the Two Sessions also make clear, that Beijing does not want to impair trade relations with the EU given that trade with the EU made up 13.7% of total Chinese trade in 2021, which will very likely serve as a check to the amount of Beijing’s support for Russia​
  • Some Chinese businesses, such as ICBC and other commercial banks have already limited their interaction with sanctioned firms, showing clear limits to China’s support for Russia​

Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.

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