23.11.23 China Review

Tractors vs Tanks: Record volumes of Chinese imports have helped Russia repel the Ukrainian counteroffensive

China, which has repeatedly declared its neutrality regarding Russia's war in Ukraine, has actually become Moscow's leading ally in this conflict. The import of machinery, equipment and technology from China, which has multiplied significantly since the beginning of the war, have helped Russia not only to create a reliable line of fortifications in the occupied territories, but also to establish arms production, freeing up the capacity of Russian enterprises and supplying them with missing components. A separate part of Beijing's assistance to Moscow is the re-export of Western dual-use goods. The volume and range of Russian imports from China are so significant that they often offset the effect of the military assistance being provided to Kyiv by NATO countries. However, as it stands, it seems that the West has no tools left in its toolbox to alter this situation: in the run-up to the US presidential elections, the Biden administration has set out to reduce mutual tensions with China and will avoid interfering in its trade policy.

Technological imports from China have played a crucial role both in replacing Western goods unavailable in Russia due to sanctions and in successfully helping Russia to counter the Ukrainian counteroffensive, according to a report by experts at the Atlantic Council. The sharp increase in Chinese supplies helped Russia strengthen its defences in the occupied territories of Ukraine and provided it with the technologies necessary for waging war.

As Re:Russia recently wrote, Russia has been increasing its imports from China for several years, and in the first nine months of 2023 its volumes reached a record $81.4bn, accounting for 36% of all Russian imports. This is 1.7 times more than during the same period of 2021. At the same time, the majority (37%) of these imports fall under the heading 'Machinery, equipment and mechanisms'. The Atlantic Council study provides a glimpse of what is behind these figures.

Imports of Chinese equipment have probably played a key role in the construction of defences in the occupied territories of Ukraine. Since October 2022, when their construction began, shipments of Chinese tracked and tyre-mounted excavators to Russia have grown to almost 2000 units from about 450 for the same period in 2021. In March 2023, imports of such excavators reached a record level of almost 2.2 thousand vehicles. Chinese shipments of front-end backhoe loaders also rose markedly during this period, from 860 in September 2021 to nearly 2,200 in September 2022. According to an investigation by The Wall Street Journal, both of these types of vehicle have been actively used by the Russian army in the construction of defensive fortifications.

In addition, during the first eight months of 2023, the volume of supplies to Russia of Chinese trucks weighing more than 20 tonnes increased by 728% compared to the same period in 2021. Chinese exports to Russia of industrial tractors grew even more significantly — from zero in 2021 to almost 48,000 units by September 2023. Experts believe that such machinery has allowed Russian forces to establish logistics chains in the occupied territories. Deliveries of Chinese trucks have also probably allowed KAMAZ and other Russian automakers to free up capacity and set up production of armoured vehicles and other military goods.

China appears to be continuing to avoid supplying Russia with lethal weapons or their components, but this does not prevent Beijing from supplying Moscow with important components for the production of such weapons. Total exports from China to Russia of ball bearings have increased by 345% since the beginning of the year, compared to the same period in 2021. Chinese exports of these parts to Kyrgyzstan have grown even more significantly — by 2492% - most likely for subsequent re-export to Russia. These parts, which Russia traditionally purchased from the West prior to the imposition of sanctions, are needed in the production and maintenance of tanks and railway cars. The New York Times has written that Russia's annual production of tanks has now reached two hundred units, or twice the pre-war level.

The supply of electronics and their components is also important for Russia’s continued military aggression in Ukraine. Drones made by the Chinese manufacturer DJI flow freely to Russian firms that are linked to the military-industrial complex. Beijing had also supplied Moscow with various high-tech components, including avionics and engine parts for fighter jets, and re-exports Western dual-use goods to Russia.

Chinese integrated circuit exports to Russia as of April 2023 were double the level of 2021, and in the first nine months of this year surpassed the annual pre-war level. Beijing has also become a leading intermediary in Russian supplies of semiconductors from other countries. The Ukrainian military has found similar parts in Russian weapons captured on the battlefield, including cruise missiles, tanks and Orlan drones. As Re:Russia has previously discussed, in 58 units of Russian equipment and shells seized since the beginning of the war, experts found 1,057 imported components (mostly chips and microchips), of which more than 70% were produced by US companies and more than 20% by European companies.

Thus, the flow of imports from China (including the re-export of goods and parts from Europe) has helped to reduce the effect of large-scale deliveries of weapons and ammunition to Ukraine from NATO countries, according to the authors of the Atlantic Council study, and is becoming an obstacle to Ukraine regaining control over its territories. In order to counter this, Ukraine's partners should recognise China’s current role as a vital ally of the Russian army, the experts conclude. 

However, the West has hardly any means to change this situation. The US is seeking guarantees from Beijing that China will not supply actual weapons to Russia. Beijing has emphasised that it is not supplying arms and is complying with informal agreements with the US, but is unlikely to tolerate wider interference in its trade policy. In turn, the US has no tools to pressure Beijing on this issue. Moreover, as the APEC summit in San Francisco in November showed, at this point, less than a year before the presidential election, the Biden administration is looking to reduce mutual tensions with China and avoid a further deterioration of relations.

What could conceivably be done to counter this issue, is to develop forms of control over the re-export to Russia of dual-use products manufactured in Western countries themselves. This is because they form, as many studies have shown, a significant portion of the imports that are helping the Russian government to conduct military operations and to find answers to the supply of arms to Ukraine by Western countries.