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Trade Developments: On December 20, Gazprom announced that Russia’s daily provision of natural gas—traveling through the Power of Siberia pipeline to China—set a new record. The amount exceeds the contractual requirements previously established with the China National Petroleum Corporation. Additionally, Russia has increased its gas delivery to an annual supply volume of thirty-eight billion cubic meters. That flow of natural gas should, reports Bloomberg, “slightly exceed its pipeline flows to Europe.”
However, Russia has faced challenges using its highly developed rail network for trade with China, and Russian Railways JSC is cutting its investment program by 30 percent. Bloomberg writes that “an increase in war-related cargoes is also compounding existing bottlenecks, while sanctions weigh on cross-border payments.” As a result, Russia has been increasingly using the Eastern Polygon rail network, though it too has been experiencing delays and infrastructural strain.
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Russia’s State Atomic Energy Corporation Rosatom has held significant stakes in Kazakhstan’s Kazatomprom, including investments in uranium deposits. Now, it has begun to sell those stakes to Chinese companies. Recently, Rosatom’s Uranium One Group sold a 49.979 percent stake in the Zarechnoye mine to a company whose “ultimate beneficiary” is China’s State Nuclear Uranium Resources Development Company, says Kazatomprom. The Moscow Times reports that Uranium One Group also plans to sell 30 percent of Khorasan-U and Kyzylkum LLP to China Uranium Development Company Limited. Those sales benefit the Chinese government, increasing its influence in Central Asia, while intensifying Russia’s reliance on China.
In November, Reuters reports, Chinese yuan-dominated exports decreased by double digits, a steep decline from October; yuan-based imports from Russia have fallen by 7.4 percent. The main issue, says Russian President Vladimir Putin, lies in mutual payment settlements, which both Chinese and Russian banks are actively working to improve.
Over the past year, there has also been a significant decline in Chinese imports of Russian coal, dropping from $13.3 billion to $10.5 billion. Even so, Chinese imports account for 45 percent of Russia’s coal exports, says Vaibhav Raghunandan of the Centre for Research on Energy and Clean Air. Trade between the two countries continues to face persistent roadblocks, with progress in one area co-occurring with challenges in another.
Western Pushback: The United States is struggling to limit Chinese and Russian acquisition of advanced American computer chips, despite concerted efforts to enforce export controls. Russia has managed to acquire American chip components indirectly through front companies in places such Armenia, Georgia, and Hong Kong. Meanwhile, China has been acquiring American technology through the creation of extensive smuggling networks, according to a report by the Senate’s Permanent Subcommittee on Investigations. The Donald Trump administration, which is expected to have a confrontational stance on China, could push for harsher enforcement of export controls alongside other stringent policies.
On December 16, the European Union enacted its fifteenth round of sanctions on China. Those sanctions, reports Newsweek, included measures against Chinese companies that sell “dual-use products and technologies” to Russia and help it acquire “unmanned aerial vehicles.” One sanctioned company, Juhang Aviation Technology Shenzhen Co. Ltd., supplied Russia with materials that contributed to the production of long-range attack drones. Additional sanctions were introduced against shadow fleets, or vessels attempting to circumvent Western sanctions to transport goods like oil, weapons, and grains. A statement by Chinese Foreign Ministry Spokesperson Lin Jian expressed strong opposition to these sanctions, arguing that the EU sets a double standard, as Western companies continue trading with Russia.
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On December 4, the United States revealed its new space force unit in Japan, a response to growing threats from China, North Korea, and Russia. According to Newsweek’s Ryan Chan, the unit will enhance Japan’s “space surveillance and missile warning capabilities.” The increasing cooperation between the three U.S. adversaries is continually pushing the West to strengthen its alliances with countries in the region.
Moscow and Beijing in the Arctic: The United States and NATO allies are increasingly concerned about the expanding presence of China and Russia in the Arctic. With melting ice creating greater access to the region, China and Russia have utilized it for activities such as “joint naval exercises, coast guard patrols, and strategic bomber air training,” writes Voice of America. Additionally, the two nations are building shipping routes through the Arctic which would help with the transport of Russian oil and gas. In July, the U.S. Department of Defense released a “2024 Arctic Strategy,” calling for a stronger response to their increased activity in the region. On December 6, the Canadian government announced plans to boost military spending by $8.1 billion over the next five years, which should help address growing security concerns including Chinese and Russian operations in the Arctic.
Ukraine: China has started restricting the sale of components—including motors, batteries, and flight controllers—that could be used to construct unmanned aerial vehicles for Ukraine. Those restrictions are expected to intensify next year and could, according to Bloomberg News, involve requiring “license approvals based on the intended use of the components” and “softer requirements for Chinese companies to notify the government of their shipment plans.”
On December 24, Ukrainian Minister of Agrarian Policy and Food Vitalii Koval announced potential plans to enhance agricultural cooperation with China. They include developing new export markets and increasing Chinese technology use. Koval highlighted that, over the past ten months, Ukraine exported $250 million worth of agricultural products to China while importing over $220 million worth of agricultural goods from China.