China raises prices on military-related exports to Russia due to sanctions
Chinese exporters are increasing prices for Russian military-industrial buyers as Western sanctions restrict imports from other countries.
According to the Financial Times, this is stated in a new report by the Bank of Finland Institute for Emerging Economies (BOFIT), Ukrinform reports.
The study notes that export prices for goods shipped from China to Russia rose on average by 87% between 2021 and 2024. By contrast, prices for similar goods exported to other countries increased by only 9%.
The research shows that although Russia has been able to rely on Chinese suppliers to circumvent Western restrictions on acquiring goods with potential military applications, the wave of sanctions introduced after the full-scale invasion in 2022 has driven up costs for the Kremlin.
The authors of the study focused on a significant pressure point — trade in goods within the category machinery and mechanical appliances, which includes a wide range of items identified as necessary for the development of the military industry. They concluded that sanctions have constrained Russia’s technological capabilities by making imports of critically essential goods more expensive.
In some cases, researchers found that the rise in the value of imports from China to Russia, subject to export controls, was driven entirely by higher prices rather than an increase in trade volumes. For example, by 2024, the import of Chinese ball bearings into Russia had risen by 76% in dollar terms compared with 2021, but the volume of exports had declined by 13% over the same period.
Using slightly different methods, the researchers also identified significant price increases charged to Russian importers for sanctioned goods in Turkey, with prices rising by 25–55% compared with other export items.
Drawing on data from 14 countries, they calculated that the average price of imports subject to export controls rose by 75% between 2021 and 2024, whereas the cost of other imported goods remained unchanged.
The study showed that the impact of sanctions on prices also appears to be intensifying, possibly because stricter compliance has enabled exporters to demand higher markups from Russian clients.
A senior Western official responsible for sanctions told the Financial Times that although they would prefer to see Russia’s military-industrial complex cut off from its suppliers, Chinese companies fleecing the Russians is a pretty good outcome.
The lifting of sanctions remains a critically important objective for the Kremlin. In the original 28-point peace plan drafted by the United States and Russia and presented to Ukraine last week, the document states that the lifting of sanctions will be discussed and agreed upon gradually and on a case-by-case basis, the article notes.
China has repeatedly denied providing Moscow with lethal weapons and has stated that it opposes unilateral sanctions that hinder business between Chinese and Russian companies.
As reported by Ukrinform, the Chinese government recently said it does not provide lethal arms to either Russia or Ukraine and strictly controls the export of military products and dual-use goods.