War in Ukraine Has China Cashing In
The country’s trade with Russia this year has exceeded $200 billion, and makers of cars and trucks are the big winners.
On China’s snowy border with Russia, a dealership that sells trucks has seen its sales double in the past year thanks to Russian customers. China’s exports to its neighbor are so strong that Chinese construction workers built warehouses and 20-story office towers at the border this summer.
The border town Heihe is a microcosm of China’s ever closer economic relationship with Russia. China is profiting from Russia’s invasion of Ukraine, which has led Russia to switch from the West to China for purchases of everything from cars to computer chips.
Russia, in turn, has sold oil and natural gas to China at deep discounts. Russian chocolates, sausages and other consumer goods have become plentiful in Chinese supermarkets. Trade between Russia and China surpassed $200 billion in the first 11 months of this year, a level the countries had not expected to reach until 2024.
Xi Jinping, China’s top leader, and Russia’s president, Vladimir V. Putin, have made numerous public demonstrations of the nations’ close ties. Mr. Xi visited Harbin in early September and declared Heilongjiang to be China’s “gateway to the north.” China’s exports to Russia soared 69 percent in the first 11 months of this year compared with the same period in 2021, before the invasion of Ukraine.
“Maintaining and developing China-Russian relations well is a strategic choice made by both sides on the basis of the fundamental interests of the two peoples,” Mr. Xi said as he met in Beijing on Wednesday with the Russian prime minister, Mikhail Mishustin.
China has filled a critical import need for Russia, which many European and American companies shunned after Mr. Putin started his war in February 2022. China has pursued its role as a substitute supplier of goods despite risking its close economic ties with many European nations.
The biggest winners for China from the surge in trade with Russia have been its vehicle manufacturers.
On a recent afternoon in Heihe, lines of diesel freight trucks with decals of snarling bears, a symbol of Russia, on their drivers’ doors waited to be driven across an Amur River bridge to Russia. The bridge is new, and so are the trucks, which wore Genlyon badges, a brand that belongs to the state-owned Shanghai Automotive Industry Corporation. The company, known as SAIC, also makes car brands like MG, acquired from Britain.
The sales helped China overtake Japan this year as the world’s largest car exporter. German manufacturers like Mercedes-Benz and BMW used to be strong sellers in Russia, but they have pulled out in response to sanctions on the country by Europe, the United States and their allies.
Sales of luxury cars in Russia have plunged, contributing to a decline in the overall size of the country’s car market, which is now less than half the size of Germany’s. But lower-middle-class and poor Russian families, whose members make up the bulk of the soldiers fighting the war, have stepped up purchases of affordable Chinese cars, according to Alexander Gabuev, the director of the Carnegie Russia Eurasia Center.
One reason, Mr. Gabuev said, are the death and disability payments that the Russian government and insurers are making to families of Russian soldiers — as much as $90,000 in the case of a death.
Russia has not released the number of its killed and wounded, but the United States estimates the total at 315,000.
Russians buy almost exclusively internal combustion cars. China has a surplus of them because its consumers have shifted swiftly to electric cars.
For more details follow this link.