When Vladimir Putin arrived in Beijing this week to meet Xi Jinping, the optics were unmistakable. Military honour guards, joint statements against Western “hegemonic” influence, and dozens of cooperation agreements signalled that Moscow and Beijing are moving deeper into a long-term strategic partnership.
But beneath the carefully choreographed diplomacy was a more uncomfortable reality for Russia. Despite signing multiple agreements spanning trade, technology, agriculture and media, the two countries still failed to finalise the long-delayed Power of Siberia 2 gas pipeline, a project that has become the clearest symbol of the shifting balance inside the China-Russia relationship.
For Russia, the pipeline is now an economic necessity. For China, it remains optional leverage.
Trade Ties Hit Record
The economic relationship between China and Russia has expanded dramatically since Russia’s invasion of Ukraine in 2022 triggered sweeping Western sanctions.
According to China’s General Administration of Customs, bilateral trade between the two countries reached a record $244.8 billion in 2024 before slipping 6.9% to $228.1 billion in 2025 due to lower oil prices and weaker Chinese vehicle exports to Russia.
Even with the decline, trade levels remain nearly double pre-war figures.
Russia has become heavily dependent on China as its largest energy buyer. China, meanwhile, has benefited from discounted Russian crude oil and pipeline gas supplies at a time of global energy volatility.
Reuters reported that Russian oil exports to China surged 35% in early 2026, highlighting how energy remains the backbone of the relationship. This growing dependence has fundamentally altered Moscow’s negotiating position.
Before 2022, Europe absorbed the bulk of Russian gas exports. After sanctions and the collapse of Russian pipeline flows into the European Union, Moscow urgently needed alternative long-term buyers. China emerged as the only market large enough to partially replace Europe.
Power Of Siberia Stakes
The proposed Power of Siberia 2 pipeline would transport gas from Russia’s Yamal region through Mongolia into northern China.
If completed, the pipeline could carry roughly 50 billion cubic metres of gas annually, more than doubling Russia’s existing gas exports to China. Bloomberg reported that the project has the potential to reshape global gas flows over the next decade.
For Russia, the stakes are enormous.
Gazprom has struggled financially since losing access to the European market. Reuters reported that Gazprom’s market value has fallen to around 2.8 trillion roubles, or about $40 billion, a dramatic collapse from the company’s once-stated ambition of becoming a $1 trillion energy giant.
Investor frustration is growing because repeated Putin-Xi meetings continue to end without a final agreement on pipeline pricing, financing and delivery commitments. After this week’s summit, Gazprom shares fell again as investors reacted to the absence of concrete progress.
The message from Beijing appears increasingly clear. China wants Russian energy, but only on terms that maximise Chinese advantage.
China Holds Negotiating Power
The imbalance in leverage is now impossible to ignore. Russia needs China far more urgently than China needs Russia.
China already imports energy from multiple suppliers across the Middle East, Central Asia, Australia and global LNG markets. Russian gas is strategically useful, but not indispensable. That gives Beijing room to delay negotiations and demand lower prices.
Multiple reports this week suggested that disagreements over pricing remain one of the biggest obstacles to finalising Power of Siberia 2. China’s caution also reflects broader geopolitical calculations.
Beijing wants to deepen economic ties with Moscow without becoming excessively dependent on Russian infrastructure. At the same time, Xi’s government is careful not to trigger secondary sanctions or deepen instability in its own energy markets.
This explains why summit meetings continue to produce symbolic unity but limited breakthrough outcomes.
Iran Conflict Changes Calculus
The ongoing Middle East crisis may nevertheless increase the project’s strategic importance.
Bloomberg reported that disruptions linked to the Iran conflict and fears over maritime energy routes have renewed Chinese interest in securing more land-based energy supplies.
China imports a substantial portion of its oil and LNG through sea lanes vulnerable to geopolitical disruptions, particularly around the Strait of Hormuz. A major overland Russian pipeline offers Beijing a hedge against maritime instability.
That dynamic partly explains why both countries continue publicly supporting the project even while negotiations stall behind closed doors. Energy security is now deeply intertwined with geopolitical risk management.
Beyond Energy Diplomacy
This week’s summit was not only about pipelines. China and Russia signed more than 40 agreements covering technology, trade, agriculture and media cooperation.
Reuters also reported that both countries pledged to expand agricultural trade after Russian meat exports to China rose 19% last year to 254,000 metric tons. The broader strategic objective is becoming clearer.
Both governments are trying to build parallel economic systems that reduce reliance on Western markets, institutions and financial infrastructure.
Their joint statements criticised unilateral sanctions and Western global influence, signalling an increasingly coordinated geopolitical alignment. Yet even within this partnership, economic realities matter more than political symbolism.
China is the stronger economy, the larger buyer and the more diversified energy consumer. Russia increasingly occupies the role of resource supplier operating under constrained options. That imbalance may define the future of the relationship more than any summit photo opportunity.
The Logical Indian’s Perspective
the growing China-Russia partnership is a development worth watching carefully, not emotionally. India maintains strategic ties with both countries while also strengthening relations with the West.
A deeper Russia-China energy alliance could reshape global trade routes, energy pricing and geopolitical influence across Asia.
However, India’s long-standing policy of strategic autonomy means it is unlikely to take sides openly. The larger concern for New Delhi is ensuring regional stability, diversified energy access and balanced diplomacy in an increasingly polarised global order.
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