Putin Meets With Xi Jinping As Sanctions Weigh on Russian Economy

• Putin's China visit aims to strengthen defense cooperation and find ways to circumvent U.S. sanctions.
• Putin and Xi are expected to sign a joint statement and celebrate the 75th anniversary of diplomatic relations between China and the Soviet Union.
• Putin's meeting with Chinese Prime Minister Li Qiang will focus on trade and humanitarian issues.

Russian President Vladimir Putin will visit China for a two-day state visit where he’s set to press Chinese leader Xi Jinping for more support to sustain his country’s sanctions-hit economy and war machine in Ukraine.

The May 16-17 visit is Putin’s first foreign trip since he was sworn in for a fifth presidential term one week ago and comes as Beijing continues to extend a key economic lifeline to Moscow to help soften the blow of Western economic sanctions that have limited Russian access to global supply chains and international markets. The United States has increased its warnings in recent months about China’s crucial role in helping Russia on the battlefield by aiding its defense industry through the supply of nonlethal but militarily useful dual-use products.

Analysts say a main objective for Putin’s trip will be to find ways to circumvent U.S. restrictions that have driven down Chinese exports to Russia in March and April following a boom in consumer products and dual-use goods since Moscow’s full-scale invasion of Ukraine in February 2022.

Both U.S. Secretary of State Antony Blinken and U.S. Treasury Secretary Janet Yellen warned Beijing during visits to China in April that Chinese companies -- and financial institutions -- could face secondary sanctions for supplying Moscow’s defense industry.

“There are clear signals that the economic component of the war will be a crucial piece of [the visit],” Nathaniel Sher, a senior research analyst at Carnegie China, told RFE/RL. “Every month, China is exporting more than $300 million worth of dual-use products to Russia and isn’t hiding it. There [are] few reasons to see why they’d stop now.”

An analysis of Chinese customs data by Sher shows that Chinese exports to Russia have risen by more than 60 percent since the invasion of Ukraine and that in 2023 some 90 percent of “high-priority” dual-use goods used in Russian weapons production was imported from China. China’s total trade volume with Russia also rose by 26 percent in 2023 to a record $240 billion.

Underscoring the importance of Russia’s defense sector to Putin’s China trip is a Kremlin reshuffle that saw him appoint technocrat economist Andrei Belousov as defense minister on May 12. Defense spending in Russia has been ratcheted up and experts say Belousov’s appointment is part of an effort to raise military production for the war in Ukraine in preparation for a yearslong campaign.

Belousov, who has held several top economic roles over the last decade, also has extensive experience dealing with China. Both Xi and Putin will meet with policy teams specializing in trade, energy, and security cooperation during the visit and Alexander Gabuev, the director of the Carnegie Russia Eurasia Center, says that since Xi’s state visit to Moscow in 2023 both Beijing and Moscow have “invested serious effort…to get senior officials on both sides to know each other well.”

“As Beijing and Moscow expand their defense industrial cooperation, Putin has elevated high-caliber professionals with China experience,” Gabuev wrote on X, formerly Twitter.

Meeting An 'Old Friend'

Since the announcement of a Russia-China “no limits” partnership in February 2022, which was followed by Russia’s invasion of Ukraine just days later, the countries have moved closer together despite sanctions and political pressure from the West.

In previewing the visit, the Kremlin said Putin and Xi would “discuss the whole range of issues in detail in their all-encompassing partnership and strategic relationship.”

The two leaders will also sign a joint statement and take part in an event celebrating the 75th anniversary of diplomatic relations between China and the Soviet Union, the Kremlin added.

Putin will also meet Chinese Prime Minister Li Qiang to discuss trade and humanitarian issues, the Kremlin said, and then visit the northeastern Chinese city of Harbin to open two bilateral trade events.

The state visit will mark the 43rd time that Putin and Xi have met. In an interview with China’s state-run Xinhua news agency on May 15, the Russian leader praised Xi as an “old friend” and said China-Russia ties have reached new heights as both countries “strengthen foreign policy coordination in the interests of building a just multipolar world order.”

Alicja Bachulska, a China policy expert at the European Council on Foreign Relations, says the timing of the visit is key, as it follows a high-profile European tour by Xi to France, Serbia, and Hungary.

“The optics suggest that the two leaders will talk about China’s key takeaways from Xi’s meetings in Europe, many of which concerned the situation in Ukraine,” she said.

Both countries serve as important geopolitical counterweights for each other in their rivalries with the United States. Moscow has stepped up military drills in the East China Sea with Beijing and U.S. intelligence officials warning in May that Russia and China are working closely together on military issues, including any potential invasion of Taiwan.

Meanwhile, amid Russia’s isolation from the West, China has displaced the European Union as Russia’s largest trading partner and become the biggest market for Russian oil and gas.

But this has also raised the risk of Russia becoming economically reliant on China, which has left it with less leverage in negotiations over its vital energy sector.

Russia is hoping China will replace Europe as the major market for its gas exports, but the two countries are yet to reach a deal on the Power of Siberia-2 pipeline, which would supply China with gas from fields previously serving European markets.

Testing A 'No Limits' Partnership

This risk of overreliance is also a factor in the flow of dual-use products from China to Russia, says Dennis Wilder, a former director for China on the U.S. National Security Council.

“Putin seems happy with what he’s getting from the Chinese defense industry,” Wilder told RFE/RL. “I don't think he feels he needs to get lethal weapons from them because he wants Russia to build these weapons. It's less costly to do it that way.”

Wilder, a research fellow at Georgetown University, says the Kremlin is hoping to sustain the flow of dual-use goods to refurbish its defense industry, which is currently looking to boost the production of weapons and ammunition as the war in Ukraine grinds into its third year.

North Korea has also supplied Russia with millions of artillery shells for the Ukraine war and transferred ballistic missiles and other weapons in exchange for food and raw materials to manufacture weapons. South Korea and the United States have since accused North Korea and Russia of trading arms in violation of UN sanctions and expressed concern that Moscow could supply Pyongyang with more advanced military technology.

While no visit has been confirmed, Putin expressed his willingness to visit North Korea in January after an invitation from leader Kim Jong Un and some experts have speculated that Putin could visit Pyongyang following his trip to China.

“The North Korea element is an important wrinkle in this relationship and I imagine it will also be discussed in Beijing,” Wilder said. “North Korea can help Russia militarily where China can’t, but this new relationship with Putin and Kim is worrisome to the Chinese as it could further destabilize things in the [Korean] Peninsula.”

By RFE/RL

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