Russia now economically dependent on China, has little strategic leverage since Ukraine War: Study

Since the beginning of the Ukraine War, Russia has become economically and strategically dependent on China, according to a new study.

In a new research paper published by the Takshashila Institution, China researcher Amit Kumar notes that even as there is a degree of symmetry in some aspects of the Russia-China relationship, the overall relationship is now highly asymmetrical in favour of China.

Such asymmetry has left Russia with little strategic leverage over China and has made it highly dependent on China, according to Kumar’s paper titled ‘China-Russia Relationship: Assessing the Power Asymmetry’.

The paper comes at a time when Russia and China are working in tandem at the world stage to undermine the United States and the West. They have hailed their 'no limits' friendship and have built an anti-West bloc along with fellow authoritarian regimes of Iran and North Korea . These regimes have linked their economies and trade practices such that they bypass the Western institutions to the fullest and fulfil mutually-beneficial objectives.

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Since the beginning of the Ukraine War, as sanctions hit Russia and it lost market access to the West, China came its rescue. Now, more than two years later, the Russia-China relationship has become highly unequal.

China rescued Russia — and dominated it along the way

As of 2023, China accounted for 30.4 per cent of overall exports and 36.6 per cent of overall imports of Russia.

For Russia, China has effectively replaced Europe in terms of both imports and exports, notes Kumar, a Staff Research Analyst with Takshashila’s Indo-Pacific Studies Programme.

The breakdown of the imports and exports further provides insight into the dependent and unequal nature of the Russia-China relationship.

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Russia’s economy is highly dependent on the energy sector. Gas and crude oil remain central to the Russian economy. For the past decade, energy revenues have comprised up to 30-50 per cent of total federal budget and oil and gas have contributed to around 20 per cent of Russia’s annual gross domestic product (GDP).

Not only are Russia’s exports to China dominated by energy, but a majority of Russia’s global exports are also concentrated in China, says the study.

Kumar notes that this gives China considerable leverage over Russia, which China has not been hesitant to use.

“China has helped Russia cushion the impacts of mounting Western sanctions. Beijing on the other hand, has benefited from heavy volumes of cheap and discounted energy imports from Moscow. However, despite witnessing a symmetric gain in bilateral trade ties, China holds greater leverage over Russia owing to the shrinking export markets for the latter,” notes Kumar in the paper.

Russia dependent on China for Ukraine War

Russia is dependent on China not just economically but also to maintain its war-waging capacity.

Russia imports the vast bulk of dual-use technology and machinery from China which is used in making arms and ammunition.

The dual-technology goods that China sells to Russia include spare parts that can be used in missiles and semiconductors used in weapon systems. The goods also act as raw material for ammunition and artillery shells.

Kumar in his research found that Russia in 2023 imported around 90 per cent of high-priority goods from China and imported nearly all of critical machine tools from China. He said China therefore provided Russia with a “lifeline”.

China has emerged as Russia’s major supplier of critical machinery tools and dual-use goods, thereby sustaining its military-grade industrial capacity in the backdrop of stringent sanctions and stretched domestic capabilities, noted Kumar.

‘Russia strategic autonomy for India is shrinking’

Even though Russia does hold some levers, as China’s military depends on Russia for some of the most sophisticated systems, the overall nature of the relationship is such that Russia is dependent on China, according to Kumar.

This has a direct impact on India as even though Russia remains an old partner and India-Russia exchanges are high, the convergences between India and Russia are reducing by the day whereas the convergences between Russia and China are increasing by the day. Moreover, China is much more relevant to Russia than India.

“Despite all the goodwill that exists in the India-Russia relationship, Kremlin’s geopolitical goals align more closely with Beijing’s than New Delhi’s. Further, trade between India and Russia constitutes only a miniscule percentage of the expanding China-Russia trade,” noted Kumar in the paper.

Previously, Firstpost has reported how India differs from China and Russia in global outlook. While both sides seek a multipolar world, India seeks a 'non-West' world order whereas Russia and China seek an 'anti-West' world order.

While India uses forums like the BRICS and G-20 presidency to give more space and voice to the Global South at the world stage and become a bridge between the developed and the developing worlds and help fasten the progress of the developing countries, Russia and China seek to weave the developing nations into an anti-Western bloc.

In his paper, Kumar noted that considering how dependent Russia has become on China and how closely their geopolitical ambitions are aligned, Russia’s strategic autonomy regarding India has considerably shrunk.

Kumar notes, “India’s lack of convergence on key geopolitical issues with Russia, and its inability to rival China’s economic appeal for Russia threatens cooperation between Kremlin and New Delhi. As the power asymmetry between China and Russia rapidly expands, the room for Russia’s strategic autonomy vis-àvis India shrinks at an equally rapid pace. Hence, the question is no longer about Russia willingness, but its capability to resist China’s pressure.”