Trade Wars in Backmarket: How Chinese Competition is Decimating Russian Industry

As Vladimir Putin seeks economic salvation in Beijing, domestic Russian industries are facing an unprecedented crisis due to aggressive Chinese commercial expansion. Far from acting as a supportive partner, China has become a cutthroat competitor that is systematically driving Russian manufacturers out of their own domestic market. The industrial fallout spans multiple key sectors, leading to plunging corporate profits and rising economic friction.

The manufacturing and heavy industries are bearing the brunt of this imbalance:

• The Automotive Sector: Following the exit of Western, Japanese, and Korean automakers, Chinese brands completely monopolized the Russian market. However, local manufacturers like AvtoVAZ are reporting catastrophic losses, unable to survive the fierce competition.
• Domestic Engineering: Russian machine-building plants are currently on the verge of total shutdown. Desperate local industrial groups are heavily lobbying the government for protective utilization fees and import tariffs just to stay afloat.
• The Steel Industry: Russian steelmakers are suffering from severe production cutbacks and collapsing revenue as they continuously lose global market share to cheaper, high-volume Chinese steel.

The economic strain has even triggered an unusual trade war in the agricultural sector. Recently, cheap poultry imports from China began rapidly displacing local Russian poultry farmers. In a desperate bid to protect domestic businesses, Russia's agricultural regulator, Rosselkhoznadzor, abruptly banned Chinese chicken imports right before Putin's visit, citing sudden "sanitary concerns." Meanwhile, Beijing continues to levy heavy import duties on Russian coal, pushing the Russian coal sector into its worst systemic crisis since the collapse of the Soviet Union.

To learn more about the growing trade imbalances and industrial friction between Moscow and Beijing, check out the detailed breakdown by Vladimir Milov on YouTube.

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