Joint Ventures Between Russia and China: Development Prospects

Publication date/update: 05.11.2024

Over the last two years, economic and business relations between Russia and China have reached a new level, primarily due to the imposition of Western sanctions against Russia. As a result, Russia has redirected its market interests toward Asian partners, particularly China, whose economy is one of the most rapidly developing globally, holding the top position in Asia. This article explores how Russian-Chinese joint ventures operate.

A joint venture is a partnership between companies from different countries, combining resources and capital to achieve specific goals, such as profit growth or increased productivity. Russia and China exemplify this model, with mutual trade volumes exceeding $240 billion in 2023, surpassing figures from 2022.

China’s industrial policies support this partnership growth, as over 70% of the goods produced in China are exported. The Russian market, particularly after Western companies left, presents an excellent opportunity for expansion.

Russia and China cooperate across various industries, including manufacturing, intellectual sectors, and IT. Chinese investors are particularly interested in Russian expertise in nuclear physics and petrochemicals, often partnering with major Russian corporations and holdings, irrespective of government ownership.

Today, Russia and China are working on over 100 projects with a combined turnover exceeding 20 trillion rubles. Many of these projects began before 2022, with further expansion over the last two years. Key sectors include:

The key factor behind the deepening cooperation between the two countries is a stable political environment and consistent economic policies. Other factors include the development of joint investment funds, preferential lending programs, payment and settlement infrastructure, joint research centers, tech parks, and specialized education programs in both countries.

It's essential to note that the two partners are not entirely equal. While Russia faces Western sanctions, China continues to maintain relations with the US and EU. Nonetheless, sanctions on Russia and certain trade restrictions on China have incentivized closer economic ties.

For Russia, this collaboration is even more critical, as its international partnerships are limited. While some projects progress slowly due to sanctions, both countries are actively exploring new formats and realizing multiple projects, focusing on both financial investment and profit generation.