In geopolitics, countries form partnerships and then countries do their own thing. Often times following economics or follow the mtoney is a key to understanding what will happen in the future. China and Russia border each other and trade happens between their countries.

In an article by Keith Bradsher of the New York Times News Service, trade between the 2 countries exceeded $240 billion in 2024, up 2/3’s since Russia invaded Ukraine in February 2022. China is the biggest buyer of Russian oil, timber, coal and natural gas.

Much of the trade flows through Manzhouli, China, the main border crossing between Russia and China. The trade means trainloads of Siberian lumber, truckloads of Russian canola and oil and natural gas pipelines run through the city. Manzhouli is located beside Mongolia and north of Beijing, in China it is one of the smaller cities of 250,000 people.

The flow underscores Russia’s diminished economic position. It is now functionally an economic satellite of China, dependent on Beijing for manufactured goods while selling raw materials that China could, if it wanted to, buy elsewhere.

Almost 6% of the entire Russian economy now consists of exports to China. Russia depends on China for clothing, electronics, cars. China’s northbound exports have risen 71% since the start of the Ukraine war.

China produces 32% of the world’s manufactured goods. Russia’s share of global manufacturing is 1.33%.

China used to buy more raw materials from other countries but has cut back, finding alternatives is for any consumer – both individual and country.

The biggest stress in the trade relationship involves cars. Back in 2021, Chinese cars were not very popular in Russia. But after the invasion of Ukraine, Western automakers withdrew from the country, Chinese automakers slashed prices and now have 60% of the market according to GlobalData Automobile, a research firm.

Linking to dividend paying stocks, alternatives is the key and people always have some sort of choice, why they keep with the company is the question the investor has to ask. Every industry has some alternative, most make little sense until technology and time changes the economic equation, then people move that way. What are the alternatives for your investments?

There are more questions than answers, till the next time – to raising questions.