Xi Tells Putin China-Russia Ties Should Last ‘Generations’

(Bloomberg) -- Chinese President Xi Jinping signaled to Vladimir Putin that ties between the two nations remain strong, as the Russian leader embarks on a new term with the war in Ukraine dragging into its third year.

Xi said his nation was “ready to work with Russia as a good neighbor, friend and partner with mutual trust,” state broadcaster China Central Television reported Thursday after the pair met in Beijing. China was prepared “to consolidate the friendship between the two peoples for generations to come,” Xi added.

Putin described the nations’ cooperation as “one of the main stabilizing factors in the international arena,” according to a video posted on a Kremlin social media account.

The two leaders’ comments underscore the close relationship that has developed between their nations in recent years. They declared a “no-limits friendship” just weeks before Putin launched his full-scale invasion of Ukraine, and have met more than 40 times since Xi came to power in 2012.

Driven by Russian oil and gas sales and purchases of electronics, industrial equipment and cars, Moscow’s trade with China hit a record $240 billion in 2023. Despite that, China’s exports to Russia have dipped for the past two months amid mounting US threats of reprisals.

Putin wants the visit to ensure that the economic and diplomatic support that China has provided since he attacked Ukraine in early 2022 remains intact. The US has warned China over its trade with Russia, threatening to sanction banks that prop up the Kremlin’s war machine.

Speaking later Thursday while sitting beside Xi at a ceremony to sign agreements on deepening cooperation and issues such as media cooperation, Putin noted that 90% of trade was settled in yuan and rubles. 

“This means we can say our trade and investments are effectively safeguarded from the influence of third countries,” he said, an apparent reference to the US and the dominant role of the greenback globally.

Putin added that Moscow and Beijing had agreed to step up banking ties and increase the use of national payment systems. Details of those agreements and the ones signed before cameras were not released.

Xi also took a veiled swipe at the US, saying that “unilateral hegemony, confrontation and power politics threaten global peace and all countries’ security.” He repeated his nation’s position on the war in Ukraine, saying that “a political solution to the Ukraine crisis is the correct direction.”

What Bloomberg Economics Says:

We expect Putin will continue to press his ultimate goal of seeing China fully replace Europe in terms of energy trade, technology transfer and financial markets. A “Crussia” plan would take years and billions of dollars to execute — but may be Russia’s only rational option if the war in Ukraine extends into the foreseeable future.  

— Alex Isakov, economist

For the full report, click here.

The visit comes just days after Putin appointed Andrey Belousov, an economist and technocrat, as his new defense minister, replacing the long-serving Sergei Shoigu in a sign the Russian leader sees an extended conflict ahead. 

In recent weeks, the US has stepped up warnings to Chinese banks and exporters about consequences if they help to bolster Russia’s military capacity. 

In December, the Treasury Department announced it would impose secondary sanctions on banks that facilitate deals in which Russia procures semiconductors, ball bearings and other equipment necessary for its military — even if they’re unaware they’re doing so.

(Updates with more comments from Putin and Xi.)

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