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Vladimir Putin has landed in Beijing for a two-day state visit, where he was greeted by Chinese leader Xi Jinping with a red-carpet welcome and a full military band. The trip will build on their commitment to the “no limits” relationship they signed at the Winter Olympics in 2022, just before the full-scale invasion of Ukraine. As Russia becomes isolated from the West on the world stage, it has sought to boost trade in the East and elsewhere, helping prop up its economy in the face of sanctions.
Quote: “Relations between Russia and China are not opportunistic and not directed against anyone,” Putin declared. “Our cooperation in international matters is one of the stabilizing factors in the international arena.” Xi echoed the sentiment, adding that China will “work together to achieve the development and rejuvenation of our respective countries” and “to uphold equity and justice in the world.”
Trade between the two nations has soared to record levels, rising 26% last year to $240B and hitting targets ahead of schedule. Russia has even overtaken Saudi Arabia as China’s main oil supplier, while the latter sends back key commodities, vehicles and other consumer goods. Trade has also seen Russia’s economy top expectations to expand by 3.6% in 2023, according to the IMF, despite Western efforts aimed at draining the Kremlin’s war coffers.
Reaction? Wall Street Breakfast ran a survey last November, and again this week, on how the U.S. should manage its economic relationship with China. The biggest changes over the past six months showed that more subscribers have less faith in rapprochement and trade deals (24% to 15%), while a greater number believe decoupling and sanctions are the way to go (11% to 19%). It’s noteworthy as Washington has recently threatened additional sanctions on Chinese banks and entities that handle Russian trade involving dual-use goods that can be used for both civilian and military purposes. How does all of this factor into your investing decisions?