Trade data reveal the inner workings of Russia and China’s defense industrial cooperation

Russian President Vladimir Putin has claimed that “the People’s Republic of China and the Russian Federation are allies in every sense of the word.” While the two sides have yet to formalize an alliance, bilateral defense industrial cooperation at the technical level has become all too clear.

Chinese direct exports to Russia since the start of the Kremlin’s full-scale invasion of Ukraine have included timely and militarily consequential shipments, including significant volumes of trench-digging equipment that coincided with Russia’s construction of the Surovikin Line of defensive fortifications in southern and eastern Ukraine. Recent data show China has dramatically increased direct shipments of electric components, circuit boards, and modules to Russia, hinting at changes in the Kremlin’s prosecution of the conflict. 

In addition to tackling Russia’s procurement networks and understanding the “axis of evasion” used by Moscow to counteract Western sanctions, Western policymakers should take note of how Russia and China are deepening military cooperation, including via trade in sensitive goods and technologies. 

Chinese exports to Russia are changing in important ways

Beijing’s support for Moscow’s defense industrial base is reflected in aggregate trade totals. Year-to-date direct bilateral trade rests at just under $202 billion, up about 2.5 percent from prior-year levels. Additionally, substantial China-to-Russia trade occurs indirectly, including via third-parties in Belarus and Central Asian countries. To be sure, Chinese firms are trading with Russia for several reasons, including a desire to exploit opportunities and “fill the void” after Western companies exited Russia. But there is an undeniable geopolitical saliency to this trade, especially since Russia’s share of world imports has fallen considerably, with China constituting the major exception.

Indeed, as significant as top-line trade figures are, they don’t tell the whole story. Significant China-to-Russia trade consists of militarily sensitive trade in items identified by the United States, European Union, Japan, and the United Kingdom as the Common High-Priority List, or CHPL. Items on the CHPL include microchips for weapons guidance systems, ball bearings used for tank production, and more.

Common High-Priority List items

Tier 1: Items of the highest concern due to their critical role in the production of advanced Russian precision-guided weapons systems, Russia’s lack of domestic production, and limited global manufacturers.

Tier 2: Additional electronics items for which Russia may have some domestic production capability but a preference to source from the United States and its partners and allies.

Tier 3.A: Further electronic components used in Russian weapons systems, with a broader range of suppliers.

Tier 3.B: Mechanical and other components utilized in Russian weapons systems.

Tier 4.A: Manufacturing, production, and quality testing equipment for electric components, circuit boards, and modules.

Source: US Department of Commerce Bureau of Industry and Security

Reported Chinese data show that direct bilateral trade in CHPL items has surged since the beginning of Russia’s full-scale invasion of Ukraine. Parenthetically, while direct China-to-Russia exports are important, analysts should also consider the totality of Beijing’s support for Moscow by examining indirect trade in CHPL items.

Total CHPL trade levels—importantly, as measured in values rather than volumes—show that militarily sensitive trade stands well above pre-war levels. This comparison is distorted by Tier 3.A, however, which has comprised approximately 47 percent of shipments by value for year-to-date 2024 data. Instead, it is more appropriate to take a pre-war baseline and compare relative changes from “normal” times. 

This procedure is not without flaws: The COVID-19 pandemic and pre-war stockpiling of military industrial goods by Russia complicate identifying a relevant base period for comparison. Nevertheless, using January 2022 as a base period is likely the most appropriate way to examine how China’s CHPL exports to Russia have shifted since the beginning of the invasion. 

Breaking out exports on a tier-by-tier basis shows how direct China-to-Russia shipments have changed since February 2022. After rising substantially throughout 2022 and 2023, shipments of the highest-priority goods (Tier 1) have declined somewhat in recent months, when compared to pre-war levels. Meanwhile, Chinese direct exports of components and circuits (Tier 4.A) and Computer Numerically Controlled (CNC) machine tools and components (Tier 4.B) remain highly elevated, while exports of the former have surged in recent months. 

Shipments of Tier 4.A goods (i.e., manufacturing, production, and quality testing equipment for electric components, circuit boards, and modules) have risen sharply since the summer. Crucially, military circuit board applications include missile guidance systems, electronic warfare systems, communication systems, and more. There are also noteworthy correlations between spikes in these shipments and waves of Russian missile launches. Moscow’s receipt of Tier 4.A goods from China may have given it greater assurances that its missile supply chains would remain intact, enabling it to launch larger and more frequent attacks on Ukrainian targets. 

Conversely, direct China-to-Russia shipments of other CHPL tiers declined over the early part of 2024 amid tighter US sanctions announced in December 2023.

China-to-Russia exports of Tiers 3.A and 3.B have recovered from recent lows—and rebounded significantly for Tier 2 exports (additional electronic items).

Parenthetically, similar trends are largely observed for China-to-Russia indirect CHPL trade via Central Asia and Belarus, with some important distinctions. 

Chinese shipments of Tier 4.B (CNC machine tools and components) to Central Asia and Belarus have exploded since the beginning of the invasion. Shipments of Tier 4.B have risen by more than 1,500 percent since January 2022. Russian procurement agents are sourcing CNC machine tools via the indirect route.

Additionally, there has been an astonishing rise in Chinese shipments of Tier 3.B goods to Central Asia and Belarus. Russia now uses the indirect route to procure mechanical components, especially ball bearings used for vehicles such as armored personnel carriers, tanks and trains.

Overcoming the devil’s deal

Throughout Russia’s full-scale invasion, Beijing has consistently provided Moscow with the defense industrial support it needs in its attempt to subjugate Ukraine, with senior US policymakers reporting that Beijing’s assistance has stepped up in recent months. In exchange for vital military industrial assistance, China is reportedly receiving some of Russia’s most sensitive military technologies, including those involving submarine operations, aviation stealth technologies, and more.

The results of this devil’s deal between Russia and China are plain. Hundreds of thousands of casualties have resulted from Putin’s invasion; women and children are being trafficked internationally or by Putin’s thugs; and, after the Kremlin ruled that non-Russian Orthodox churches were deemed undesirable, Ukrainian Protestant and Catholic churches, pastors, and congregants face a violent crackdown from Russian security services. Moreover, in exchange for enabling Putin’s attempt to plunder Ukraine, Beijing is receiving military technologies it could one day use to attack the sailors, airmen, and marines of the United States and its allies.

Deepening ties between the Russian and Chinese defense complexes is something that should concern Western policymakers. While Moscow and Beijing do not share identical interests or objectives, the two sides are increasingly sharing technology and defense industrial capabilities in ways that severely impact US and Western interests. 

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Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and its Indo-Pacific Security Initiative. He is also an editor of the independent China-Russia Report. This analysis reflects his own personal opinion.

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