China ranks first among Russia’s business partners

The winners are: the Chinese! In the latest Forbes ranking of the 50 largest foreign companies operating in Russia, 11 hail from the country’s powerful Asian neighbor state, with which Vladimir Putin has promised to open up a “new era” of collaboration. In a month’s time, at a BRICS (a group of countries including Brazil, Russia, India, China, South Africa, and, since January 1, Saudi Arabia, Egypt, the United Arab Emirates, Ethiopia and Iran) summit, set to be held in the Russian city of Kazan, on the Volga river, from October 22 to 24, Putin is due to once again welcome his “friend” Xi Jinping, the Chinese president, for whom he has confided that he feels a “personal friendship.”

Meanwhile, Chinese companies have seized the reins of the top 50 list. In 2022, before the start of the Kremlin’s “special military operation” in Ukraine, the first Western sanctions against Moscow, and Russia’s shift towards its eastern and southern partners, only one Chinese company appeared in this ranking: Huawei.

Today, alongside the household appliance and electronics manufacturer Hisense and the construction holding company CRCC, the list is dominated by car companies. Leading the way, first-placed among the 50 foreign companies, is the Chinese automaker Chery. Its revenue in Russia quadrupled in 2023, reaching 590 billion rubles (over €5.8 billion), thanks to the sales of around 220,000 cars on the Russian market.

Fictitious gas pipeline

“The Chinese are coming to town!” is an increasingly popular joke among motorists driving in Moscow and other major cities across the country. For private customers, car-sharing and taxi networks, Chery, Haval and Geely have largely replaced Western brands. The Western companies have closed their factories, although Renault, Chevrolet, Volkswagen, Nissan, Kia and Hyundai vehicles are still ever-present in Russian traffic jams.

Trade between Russia and China will reach a record total of $240 billion by 2023. This is best exemplified by a flagship, though still hypothetical, project: Power of Siberia 2, an as-yet-unrealized gas pipeline designed to supply China with some 50 billion cubic meters of Russian gas, which had originally been destined to be sent to Europe. The project clearly reflects the unbalanced economic partnership between the two “friends.”

While Moscow has become more dependent on Beijing, both for its “pro-Russian neutrality” and for its markets, to compensate for European embargoes, half of Russia’s 2023 oil and oil product exports were shipped to China. Moreover, the entire Russian economy has been reoriented towards its powerful eastern neighbor, at the risk of the country finding itself in a position of dependence and weakness.

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Publish date : 2024-09-25 19:00:00

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