Trade Between Russia and China Since 2022: How It Works

What actually changed after 2022

The shift happened in three waves, not one. First, Western suppliers left or paused. Second, Chinese suppliers tested volumes on a small scale. Third, those that tested kept and expanded the shelf space. What looks like a single political event is, commercially, a supply-chain substitution that took roughly two years to stabilise.

The most measurable change is on the money side. Settlements moved out of dollars and euros into rubles, yuan and other friendly-country currencies, reaching 86% of exports (Bank of Russia, 2025). On the investment side, the origin map changed completely: 75% of FDI now comes from friendly countries, up from 25% before (UNCTAD via Izvestia, 2025).

What did not change is that the relationship is still asymmetric. Russia supplies commodities and receives manufactured goods. That structure existed long before 2022 and has become more pronounced, not less.

• Substitution is category-specific: fast in consumer goods and cars, slower where certification, service networks or long-cycle equipment are involved.
• Payment infrastructure, not demand, is the binding constraint in most deals.
• Contracts now routinely include currency, routing and re-invoicing clauses that were rare before 2022.

The commodity side: what Russia sells

Russian exports to China remain concentrated in energy, metals, fertilisers, timber and agricultural products. That concentration is the single biggest commercial risk for a counterparty: a small number of large buyers and sellers on each side means pricing power sits with whoever has alternatives.

Metals illustrate why the relationship matters beyond volume. Russia is the world's number one producer of palladium, with 44% of world supply (USGS, 2025), and a large share of that output is a by-product of nickel and platinum group metals. Any investor modelling a metals supply chain has to treat Russian output as a structural input, not a swing factor.

On the agricultural side, remember the ownership rule: foreign persons and entities cannot own agricultural land in Russia, only lease it, for up to 49 years. A foreign investor can own the operating company, the processing plant and the storage, but not the soil.

• Commodity contracts are usually long-term and priced off published indices plus a formula.
• Logistics capacity, not the commodity itself, often decides whether a deal closes.
• Agricultural land: lease only for foreigners, up to 49 years.

Payments and settlement: where deals actually stall

Ask any trading company where the friction is and the answer is payments. Even with 86% of exports settled in rubles and friendly-country currencies (Bank of Russia, 2025), every bank applies its own compliance policy on top of the law. Two banks can treat the same transaction differently, and a route that worked last quarter may not work this quarter.

The practical consequence is that deals are structured backwards from settlement. Companies first confirm with their own bank and a Chinese counterparty's bank that a route exists, then sign the supply contract. Doing it the other way round is where losses occur.

This is a compliance question, not a workaround question. Get independent legal and compliance advice in both jurisdictions before you commit capital, and re-check it before each significant payment. Do not rely on a broker's or an intermediary's assurance that a route is clean.

Note also the domestic payment backdrop: 88% of retail payments in Russia are cashless (Bank of Russia, 2025), so a Chinese company setting up local operations should expect a card-and-transfer environment, not a cash one.

• Confirm the settlement route with banks on both sides before signing.
• Compliance policies are institution-specific and change without notice.
• Re-verify before each large payment, not once a year.

Logistics: rail, ports and the cost of distance

Most containerised Russia-China trade moves by rail through the land border crossings and by sea through the Far East ports. Rail is faster and more predictable; sea is cheaper per tonne and less exposed to border congestion. The choice is a working-capital decision as much as a transport one.

Capacity on the rail corridors is finite, and seasonal congestion is normal. Freight rates, insurance availability and container turnover are the three variables that most often turn a profitable import into a loss. None of them are stable enough to be left to a verbal agreement.

Insurance deserves separate attention. Coverage terms for cargo moving into and out of Russia differ by insurer and by underwriter appetite, so confirm cover before the goods leave the warehouse, not after.

• Model rail and sea as two separate cost scenarios, not one blended number.
• Budget for congestion surcharges and demurrage.
• Confirm cargo insurance in writing before shipment.

If you are a Chinese investor: how to hold assets in Russia

Trade and investment are different problems. Trade needs a settlement route; investment needs a legal vehicle, a tax position and an exit path. The standard sequence is: representative office or branch to test the market, then a Russian limited liability company or a joint venture for operations, then a special regime or an investment contract for anything capital-intensive.

Russia's toolbox of investment regimes is broad. There are 90 special investment contracts covering more than RUB 2 trillion of declared investment (Government of Russia, 2025). The Free Port of Vladivostok hosts 2,130 projects (KRDV, 2026), and the Arctic Zone has 1,000 residents with RUB 1.1 trillion declared (KRDV, December 2025). Special administrative regions host 674 companies (Ministry of Economic Development, 2025). Each regime has its own entry conditions, and the numbers above describe scale, not terms.

Tax is the second lever. Corporate profit tax is 25%, with 0-5% available in certain special regimes (Federal Tax Service, 2025), and standard VAT has been 22% since 1 January 2026 (Federal Tax Service, 2026). Rates and thresholds change; treat any specific figure you see quoted as something to verify with a tax adviser at the time of your decision.

Financing costs are also part of the picture. The Bank of Russia key rate stood at 14% (Bank of Russia, September 2026). Rouble borrowing is therefore expensive relative to most Chinese corporate funding, which pushes structures toward equity, supplier credit or export financing.

• Sequence: representative office, then operating company, then special regime.
• Special regimes trade tax benefits for capital commitments and reporting obligations.
• Confirm current rates and conditions with a Russian tax adviser before structuring.

What is gated: approvals, land and closed areas

Not everything is open on the same terms to every investor. Three categories of rules matter most.

First, strategic sectors. Acquisitions of control in sectors listed under Law 57-FZ require prior government approval through the relevant commission. The list is long and includes defence-adjacent industries, natural resources of federal significance, telecommunications and others. If your target sits anywhere near the list, budget both time and a possible rejection.

Second, land. Foreigners cannot own agricultural land, only lease it for up to 49 years. Separately, border areas including Sochi, Anapa, Gelendzhik and Novorossiysk are closed to foreign land ownership. This applies to land, not to forming a company or trading in those places.

Third, investor nationality. Investors from countries designated unfriendly face special account regimes and additional government approvals. That designation is a matter of Russian law and can change. Even if your own country is not on the list, your counterparty's, your bank's or your beneficial owner's status can affect a transaction, which is why ownership chain transparency matters more than the passport on the front page.

• Law 57-FZ approval can take months and is not guaranteed.
• Agricultural land: lease only, up to 49 years, for foreign persons and entities.
• Border areas including Sochi, Anapa, Gelendzhik and Novorossiysk: closed to foreign land ownership.
• Unfriendly-country status triggers special account regimes and additional approvals.

A due-diligence sequence that saves money

Run the checks in this order. Doing them in parallel looks faster and costs more.

Start with settlement: confirm with both banks, in writing, that a payment route exists for your specific goods and counterparties. Then verify the counterparty: ownership chain, ultimate beneficial owners and sanctions exposure of each entity in that chain, not just the contracting party. Then confirm the regulatory position: whether your activity falls under Law 57-FZ, whether land is involved, and whether any nationality-based restriction applies. Then model the logistics with rail and sea as separate scenarios, plus insurance. Only then negotiate price and structure.

Finally, decide your exit before you enter. Ask what a sale would look like in five years, who the likely buyer would be, and whether the same approvals you cleared on entry would be needed on exit. If there is no credible answer, the entry price is not the real issue.

This article is general information only and is not investment, tax or legal advice. Rules, rates and thresholds in Russia change, and their application depends on your specific facts. Take independent professional advice in both jurisdictions before acting.

• 1. Settlement route confirmed by banks on both sides.
• 2. Counterparty and full ownership chain checked for sanctions exposure.
• 3. Regulatory position confirmed: Law 57-FZ, land, nationality restrictions.
• 4. Logistics and insurance modelled as separate scenarios.
• 5. Exit path identified before signing.

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