Turkey and China scale back trade with Russia amid sanction fears

Turkey and China, major trading partners of Moscow, have unexpectedly reduced their goods shipments to Russia due to fears of secondary sanctions from Washington, The Moscow Times reports, citing economic analysts.

Analysts believe the recent export boom has been deflating not only because of the threat of sanctions but also due to complications in money transactions. The Financial Times and Bloomberg also report a worsening situation for Russia. For China, the Russian market remains secondary with a 3% share, so risks outweigh potential gains.

Since the beginning of March, Chinese and Turkish banks have been scrutinizing transactions with Russia more closely, or avoiding them altogether.

Year-on-year exports from China to Russia dropped by 15.7%, marking the first decline since June 2022. Chinese exports to Russia stood at $10.7 billion in December, but by March, that figure had plummeted to $7.6 billion—a 29% fall.

Turkey's exports to Russia collapsed by 30% in the first quarter compared to the same period in 2023.

Western equipment usually features cutting-edge technology, allowing Russian enterprises to remain competitive in the global market. Without access to advanced technology and equipment, Russia risks falling behind in technological development and losing its position in the world markets.

In some sectors of the Russian economy, there is either a complete absence or inadequate development of a domestic manufacturing base capable of providing the necessary technological solutions. In such cases, importing Western equipment becomes the only way to compensate for this deficit and ensure the normal functioning of the industry, which is precisely why so-called "parallel" grey imports are so crucial for Moscow.

  Turkey, China, Russia, Sanctions