China's role as trading hub for Russia will grow
Monday, September 26, 2022
Significance
China has become an economic bridge, reselling Russian resources to the West and Western manufactured goods to Russia. This is primarily economic opportunism rather than solidarity with Russia.
Impacts
- To avoid accusations of undermining Western sanctions, Beijing will maintain a cautious official stance on China-Russia economic ties.
- Leading Chinese companies will mostly avoid direct involvement in transactions with Russia.
- Private companies, including small and medium-sized enterprises, and dummy firms created under government agencies will play a key role.
- The Chinese companies involved will gain valuable international contacts, channels, experience and know-how.
- Chinese intermediaries set high margins, so intermediated trade will push up costs, amplifying inflationary pressures.