Power Imbalance between China and Russia

• The Russian invasion of Ukraine in 2022 has shifted the world order, pushing Russia closer to China.
• The deepening Sino-Russian relationship has sparked debates about Russia’s reliability as a security partner.
• The question of whether Russia has become a junior partner of China is being raised.
Against the U.S.-led Financial Order
• The two countries have a shared grievance against the dual hegemony of the dollar and the SWIFT messaging system.
• The U.S. and its allies froze close to $300 billion of Russia’s forex reserves held overseas.
• China fears a similar threat in the event of a conflict with the West as around $770 billion of China’s $3 trillion forex reserves are currently held in U.S. treasuries.
• In 2024, the West imposed a SWIFT ban on Russian financial institutions involved in transactions of dual-use goods or weapons.
Asymmetry in Bilateral Trade
• Despite the goodwill in the India-Russia relationship, the Kremlin’s geopolitical goals align more closely with Beijing’s than New Delhi’s.
• In 2023, while exports to China made up around 30.4% of Russia’s total exports, Russia accounted for only 3% of China’s total exports.
• China’s exports to Russia were relatively more diversified, making Russia’s exports to China prone to shocks and uncertainties.
• Russia has become completely dependent on China for its requirement of high-priority goods — a list of “50 dual-use products that are essential for manufacturing weaponry like missiles, drones, and tanks.”
• China has completely dethroned the EU as Russia’s primary trade partner and absorbed majority of Russia’s losses from reduced trade with the EU.
What does this mean for India?
• Despite the goodwill in the India-Russia relationship, the Kremlin’s geopolitical goals align more closely with Beijing’s than New Delhi’s.
• Trade between India and Russia constitutes only a minuscule percentage of the expanding China-Russia trade.