China–Russia trade fell in 2025, and the reason is mostly arithmetic

Trade between China and Russia contracted in 2025 for the first time in years, prompting speculation about a political cooling. The composition of the decline suggests something more mundane, and more useful to understand.

Three causes, none of them political

Energy prices, not energy volumes. Energy accounts for over 70% of Russian exports to China. The fall in average crude prices through 2025 cut the value of Chinese crude imports from Russia by close to 20%, while physical volumes held up far better. A substantial part of the headline contraction is a valuation effect.

The car export collapse. Chinese brands had taken roughly 60% of the Russian market after Western manufacturers withdrew. In 2025 a high base effect, market saturation, certification difficulties and tighter logistics combined to produce a sharp drop in vehicle export volumes — enough on its own to drag the overall export growth rate down significantly.

Payment friction. After Russia's exclusion from SWIFT, around 99% of China–Russia settlement moved to local currencies. But major Chinese banks, wary of secondary sanctions exposure, have been extremely cautious — pushing large payment volumes through smaller and border-region banks with limited processing capacity. Transaction cycles lengthened and orders were delayed. CIPS transaction times are longer and liquidity lower than the alternative it replaced.

Added to that, US pressure on shadow fleets and ports has made some Chinese receiving terminals more selective about accepting Russian oil tankers, indirectly slowing procurement.

None of these is a political rupture. They are a price correction, a saturated market, and a financial plumbing problem.

On the data transparency question

The question of whether trade data will stop being published, or be falsified, deserves a precise answer because the loose version circulates widely.

The reduction in transparency is on the Russian side, and it is specific rather than general. The Central Bank of Russia has repeatedly postponed granular balance of payments and foreign exchange flow data, citing confidentiality and operational security. Russian customs has stopped publishing certain sub-categories of foreign trade composition, particularly product detail that could map sanctions-evasion chains. Legislation passed in 2023 authorises the government to withhold specific official statistics.

If Russia tightens further, the authority sits with a coordinating group spanning the government and Rosstat, the finance ministry and the central bank, under that 2023 decree. The rationale — inferred from the pattern rather than stated as pretext — is to prevent sanctions enforcers from using granular flow data to identify targets for secondary sanctions: specific ports, banks, transshipment routes, commodity codes.

Two things follow that are worth stating clearly.

This is not falsification of China–Russia trade data. What happens is that goods are transshipped via third countries, typically Central Asian, to obscure final destinations for sensitive items — rather than primary customs records being altered.

Chinese data remains an independent benchmark. China's General Administration of Customs compiles partner-country statistics from its own export and import declarations, not from Russian reporting. As long as China keeps publishing — and every indication is that it will — outside observers retain a solid measure of actual goods value flowing between the two.

It is also worth noting that discrepancies between institutions are normal in international trade statistics: FOB versus CIF valuation, attribution of transit trade, differing treatment of small-scale border trade. Divergent figures are not evidence of manipulation.

The practical effect of Russian restriction is that external researchers lose the ability to do structural analysis — identifying particular product sub-categories or routes — while aggregate figures remain verifiable.

The 2026 direction

The assessment is stabilisation and rebound rather than continued decline, with the structure continuing to diversify. Bilateral trade has stayed above $200 billion for three consecutive years, and the mix is broadening — agriculture, increased pipeline gas, electromechanical and higher-technology products.

The reasoning is that 2025 represents a downshift plus a price correction rather than structural decoupling. Western sanctions raise transaction costs, lengthen settlement chains and require more intermediary steps; in the medium term they push deeper coordination across both countries' trade, financial and logistics systems, which increases the relationship's resilience rather than reducing it.

That is the Chinese reading, and it should be treated as such — but the mechanism it describes is observable. Sanctions that raise the cost of a relationship without severing it tend to produce dedicated infrastructure for maintaining it.

What this means if you are on the European side

Do not read the 2025 decline as political distance. A fall driven by oil prices and a saturated car market says little about the strategic relationship. European analysis that treats the trade figures as a proxy for political alignment will draw the wrong conclusion in both directions.

Payment friction is the effective constraint, and it is bank-level caution rather than policy. The binding limit on China–Russia commerce is that major Chinese banks will not risk secondary sanctions, forcing volume through institutions that cannot handle it. That is a more precise lever than trade measures, and it works because it operates on commercial risk assessment rather than on rules.

Third-country transshipment is where the visibility is lost. Central Asian routing is what breaks the audit trail. For European firms with exposure to those corridors, counterparty diligence matters more than headline trade statistics — the aggregate numbers are reliable, and they are no longer telling you where things go.