Understand the economic relationship between China and Russia

It is not new for Russia to move closer to China to try to reduce dependence on the West.

An example of this is the agreement for the supply of Russian gas to the Chinese, involving the gas pipeline that connects Siberia to northern China. The project started in 2014, when it was defined as the deal of the century.

As a result, Russian gas exports to China stood at 16.5 billion cubic meters in 2021. The goal is to more than double that number by 2025, to 38 billion.

Energy is an extremely strategic point for Russia and also in any geopolitical scenario.

From a global point of view, it is worth mentioning an analysis made recently by the British Economist, saying that China is willing to learn from Russia’s mistakes in the war, because it also has its own project of becoming a global superpower and is already seeing that needs to make its financial system more secure.

It is even trying to diversify its reserves of about US$ 3 trillion, which are in Western assets, both in the United States and in Europe, but it has challenges ahead.

According to João Ricardo Costa Filho, PhD in economics and researcher at Universidade Nova de Lisboa, in order to achieve this diversification, China needs to think of an alternative system that is big enough, says it cannot simply spend its dollar reserves on European bonds, for example, because she would have the same exposure to the West.

China is already pulling strings to reduce its dependence on the dollar and, another sign of this, in addition to this rapprochement with Russia, there was also the news that the Chinese are making an agreement with Saudi Arabia to sell oil in yuan, an agreement that the market reverberated.

In this regard, it is worth mentioning the expert’s analysis: “yes, money is not a sufficient condition to prevail, but lack of it can be enough to lose the war”.

*With information from Priscila Yazbek.