Opportunity knocks: Russian traders in China seek profit as Ukraine war rages

By Caravanserai and AFP

People walk past a Russian clothing store in Beijing on March 22. Beijing is Moscow's largest trading partner, with trade volumes last year hitting $147 billion, according to Chinese customs data, up more than 30% from 2019. [Jade Gao/AFP]

People walk past a Russian clothing store in Beijing on March 22. Beijing is Moscow's largest trading partner, with trade volumes last year hitting $147 billion, according to Chinese customs data, up more than 30% from 2019. [Jade Gao/AFP]

BEIJING -- For Marat, a Russian businessman based in Shanghai, sanctions on his home country have heralded an unexpected opportunity in China as companies struggle to keep their supply chains open.

The 42-year-old has already been contacted by a component company hunting for partners in China after being cut off from its suppliers in Europe and North America.

"'Just be ready,'" he said was the message from the firm based in Belarus, a Russian ally also under sanctions for supporting its invasion of Ukraine.

"It will be a bigger workload for me and ... as a result, bigger rewards," said Marat, who gave one name only because of the sensitivity of commenting on the war inside China.

Both the Kremlin and Beijing have severely restricted discourse on the war in Ukraine -- including prohibiting journalists from using the words "invasion" and "war" -- and have pumped out complementary disinformation campaigns and pro-Russian propaganda.

Since Russian President Vladimir Putin launched the bloody assault on Ukraine last month, Western capitals have frozen Moscow out of the global financial system, tipping its currency into free-fall and pushing the country to the verge of default.

Even Central Asian countries formerly part of the Soviet Union have joined in opposing the invasion. Earlier in March, the Uzbek government made clear that it recognises Ukraine's independence, sovereignty and territorial integrity. The Kazakh government has refused to send troops to help Russia in Ukraine and permitted a pro-Ukraine demonstration in Almaty March 6.

Supporting Russia's war effort

But China -- a longtime Russian ally -- has refused to follow suit, throwing Moscow a potential economic lifeline to match the diplomatic cover it has provided by refusing to condemn the invasion.

NATO chief Jens Stoltenberg last Wednesday (March 23) accused China of giving political backing to Russia and warned Beijing against providing material support to Moscow's war effort.

"China has provided Russia with political support, including by spreading blatant lies and misinformation, and allies are concerned that China could provide material support for the Russian invasion," he said ahead of an urgent NATO summit on Thursday.

"I expect leaders will call on China to live up to its responsibilities as a member of the UN [United Nations] Security Council, refrain from supporting Russia's war effort and join the rest of the world in calling for an immediate, peaceful end to this war."

Beijing is already Moscow's largest trading partner, with trade volumes last year hitting $147 billion, according to Chinese customs data, up more than 30% from 2019.

There are early signs of a bounce in economic activity since the war erupted, with cross-border traders telling AFP they expect Russian demand to tilt eastward.

"This crisis is an opportunity for Russian companies in China," another Russian entrepreneur based in Beijing told AFP, using the pseudonym Vladimir.

"China is open. They're saying, 'If you want to buy, we have [it],'" he said.

Ruble trouble

But it has still been a rough few weeks for most Russia-facing businesses in China.

Wild fluctuations in the value of the ruble have prodded many Russian clients to stop taking new orders, said traders dealing in everything from pesticides to auto parts.

Others were left racing to find ways to settle accounts in Chinese yuan after the exclusion of Russian banks from the SWIFT system left them unable to make dollar payments.

Meanwhile, shipments have been plagued by delays as major couriers refuse to accept Russia-bound consignments and as some routes into the world's largest country are blocked.

"Everyone is waiting for something more predictable," said Vladimir, who specialises in importing Russian foodstuffs into China.

"Everyone is thinking ... the sanctions [might] be cancelled if the war finishes very soon."

'Good for China'

China and Russia have become closer in recent years, with Putin notably attending the opening ceremony of the Beijing Winter Olympics last month.

The strongman leader and his Chinese counterpart Xi Jinping declared a relationship of "no limits", sweetened by deals to buy billions of dollars of Russian oil and gas.

At two Russian trading malls in Beijing, stalls that burst with export-ready clothes and fabrics before the pandemic now stand empty behind padlocked doors.

The war and sanctions will affect different industries in different ways, said Marat, as sectors with high entry and operational costs -- chemicals, for instance -- are likely to fare better than cheaper, faster-moving consumer goods.

Chinese business owners are divided on what the future holds, with many braced for a sharp fall in Russian spending power.

But others see the long-term benefits for China of a Russian economy desperate for partners.

That also goes for Chinese businesspeople working inside the world's largest country.

"It's definitely good for China that Russia has fallen under Western sanctions," Chi Dashuai, a 38-year-old e-commerce platform operator told AFP from his Moscow base.

Chinese firms could rush to set up processing plants for semi-finished goods in Russia if Moscow makes it easier to do business there, he said.

"The gains for China will outweigh the losses in the long run," he said.

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Russia and China are taking advantage of the current situation in Afghanistan against NATO, but if the Taliban relies on these countries, it will be a big political mistake. China and Russia have no sympathy for Islam, Muslims, the Taliban, and the Afghan people. Instead, they want to turn Afghanistan around their strategic interests and make Afghanistan more pro-China and pro-Russian on the world political stage. The current positive stance of China and Russia on the caretaker government of Afghanistan is a political rivalry with the United States and the West. China and Russia are fierce enemies of Islam and Muslims. For decades, China has been killing and torturing Muslims in East Turkestan or Xinjiang. They are fleeing their territories and working systematically to eradicate Islamic values ​​and ideas from these Muslim-populated areas. Russia has a policy of oppressing Islam and Muslims during and after communism. So the Taliban should not believe it either, because once their goal is achieved, they will ignore both Afghans and Afghanistan. Instead of standing by the side of a powerful country, the Taliban should embrace its people, not use force or coercion against them. They should not expect what they want right away because Islam came not by force but by invitation. The Taliban need to make the most of this opportunity and create job opportunities for their educated Afghan class.


Membership in the UN Security Council also must have certain conditions. If a country invades another country and the invader is a member of the Security Council, that membership must be revoked. The Security Council has many other problems. For example, there is no representative of the 1.5 million Muslims in the Security Council. If the Russians want or Americans want, they will attack every Muslim country if the Chinese want. Right now, there is a lot of oppression against Muslims in China. Doesn't the UN Security Council have to ask China why it is committing such atrocities? Why this council allows Russia to invade the innocent people of Ukraine? If the UN is such a useless institution, it should be reconsidered and reformed. The UN body must be solid, and its orders must be carried out.