[Q&A with Alicia García-Herrero is Chief Economist for Asia Pacific at Natixis and a Senior Fellow at Bruegel.]
The relationship [between China and Russia] is undeniably asymmetric …
Russia has imposed tariffs on Chinese electric vehicles. Interestingly, those tariffs have at times been higher than the EU’s, although that often goes unnoticed. They’ve also been repeatedly adjusted, reflecting the constant push and pull between Moscow’s domestic pressures and Beijing’s demands. Every time China pressures the Kremlin to ease those restrictions, it only fuels resentment among parts of the Russian establishment …
Technology transfer between Russia and China remains highly selective. What China has largely provided are dual-use goods—not the know-how or industrial capacity to manufacture them independently. That includes microelectronics, CNC machines and components for drones. These supplies help Russia sustain production in the short term, but they do not make the country technologically self-sufficient. If those supply chains were disrupted, Russia would still struggle to replace them domestically …
At the same time, China continues to seek access to Russian military technology, while Putin is increasingly wary of handing over capabilities without receiving meaningful strategic concessions in return. That’s what makes this relationship more complicated than China’s ties with countries such as Iran. In Iran’s case, the flow of technology and dependence is largely one-directional. With Russia, both sides are trying to extract technological advantages from the other while simultaneously preventing the other from gaining too much …
That’s why I think the relationship is far less stable than it appears. On paper—as we heard, unfortunately, right before the invasion of Ukraine—it was presented as a ‘no-limits’ partnership. In reality, however, it is not a relationship built on trust …
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Lifting sanctions [by Europe on Russia] remains very difficult unless there is a significant move from Russia itself to end the war on terms that are acceptable, in my view, to both Europe and Ukraine. And that is an important point.
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I can tell you quite openly that China desperately needs exports right now. And that is why the tone towards Europe is changing and becoming somewhat more positive. China used to say: “There is nothing to negotiate here. Take it or leave it — you need us.” Now the message is a bit more nuanced: “Yes, you need us, but we also need you, so maybe we can move beyond this trade dispute.”
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China understands that the situation in Europe is becoming increasingly difficult. Look at the tens of thousands of potential job losses at Volkswagen, for example. The reality is that China is no longer in such a strong position to use its leverage over Russia — unless Russia is willing to give away a great deal. And even then, because the Chinese economy is struggling outside of exports, using that leverage would come at a significant cost for Beijing.
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