Russia economy meltdown as Chinese exports plunge at alarming rate

China's exports to Russia fell 16.4% in August compared to last year, data from China's customs agency reveal. Reuters has reported that the decline is the steepest since February, with exports totalling £6.34 billion in August, down 5.8% from July. Equally, Russian shipments to China declined 17.8% year-on-year to £7.37 billion, a 6.9% decrease from July, according to the Russian state news agency TASS. For January through August, China's exports to Russia declined 8.8%, while imports from Russia fell 8.2%.

Russia's Industry and Trade Minister, Anton Alikhanov, said that sanctions and market saturation are beginning to slow trade with China, curbing years of rapid growth since the full-scale invasion of Ukraine. The drop in Chinese exports last month comes amid ongoing tensions with Washington, which in early August agreed to extend a tariff truce for another 90 days.

The news follows Putin's visit to Beijing, where he attended a military parade and a major regional security summit. During the trip, Putin also held talks with Chinese President Xi Jinping to discuss strengthening Chinese-Russian cooperation.

China continues to serve as a vital economic partner for Russia, purchasing oil and supplying dual-use technology despite maintaining a stance of neutrality in the conflict in Ukraine.

During President Putin's visit, Russia's state-owned energy company Gazprom and China's CNPC signed a binding agreement to advance the Power of Siberia 2 pipeline, which is planned to transport gas from Russia's Yamal fields to China via Mongolia over the next 30 years.

Moscow and Beijing also agreed to increase deliveries through the existing Power of Siberia pipeline from 38 to 44 billion cubic metres per year.