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China-Russia trade relations reach record highs amid US sanctions

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In 2024, the trade volume between China and Russia increased significantly. The value of Chinese imports and exports to Russia in 2024 was 1.75 trillion yuan ($237 billion), a record high. The value of China-Russia bilateral trade has reached 244.8 billion dollars in 2024, which is 4 billion more than the previous year.

According to the General Administration of Customs of China, China-Russia yuan-denominated trade value increased by 2.9% in 2024 compared to 2023, although this growth was much slower than in 2023. At the same time, the supply of Chinese goods to Russia in 2024 increased by 5% in yuan terms in 2024 compared to the previous year, which is sharply below the 53.9% increase in 2023.

Such close economic ties between China and Russia have long been a subject of attention for America. Back in July 2024, Biden made a clear statement that China and Xi Jinping would definitely have to be held accountable for providing Russia with a lot of help in the fight against Ukraine.

According to Russian President Vladimir Putin, the main challenge for trade between China and Russia is the agreement on settlement and payment methods for each other. Despite this, Putin emphasized that in 2024 the relations between the two states reached an unprecedented level, which he assessed as a positive process. In his New Year’s greetings to Putin, Chinese President Xi Jinping expressed a similar position and said that China and Russia have always “hand in hand” moved forward in the right direction. Russia’s state news agency RIA also reported a promise made by Moscow’s ambassador to Beijing in December that Xi Jinping would visit Russia in 2025.

Increased trade between China and Russia is due to Western sanctions against Russia. As Alfredo Montuffar-Helou, head of the China Center of the Conference Board, a US-based think tank, states, Russian consumers have fewer alternatives to choose from in the domestic market due to Western sanctions, which increases the demand for Chinese goods. According to his prediction, the trade between these two states will continue in 2025 as well, as China becomes a bigger market for Russian exports, Chinese products fill the deficit caused by the limited supply of products from Western countries to the Russian market.

However, this bilateral trade will face a big test in 2025. On January 10, the US Treasury Department announced the imposition of additional sanctions against the Russian energy sector. The sanctions target Gazprom Neft and Surgutneftegaz, two of Russia’s most important oil producers and exporters, as well as block 183 vessels to cut Moscow’s energy revenues. The States believe that the energy industry is the Kremlin’s main source of income, which allows it to finance military aggression in Ukraine.

Cui Dongshu, the general secretary of the China Passenger Car Association, told Chinese media that in 2025, the export of cars to Russia may even decrease, which is caused by the increase in taxes.

US Treasury Secretary Janet Yellen warned Chinese Vice Premier He Lifeng during the talks that Chinese firms would face repercussions and consequences if they provided material aid to Russia against Ukraine.

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Chinese cyber-espionage campaign reached the US Foreign Investments Office

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According to CNN, Chinese hackers breached the US government office, which assesses foreign investment in the context of national security. This action underlines the Chinese interest in American institutions that have the power to block Chinese investments in the US once more.

The targeted office of the hacking campaign, the US Foreign Investment Committee (CFIUS), expanded its authority to learn about the sales of real estate near the US military bases extensively since national security experts believe that China or its proxies could purchase the lands to spy on said bases.

Aside from CFIUS, the hacking campaign reached the Office of Foreign Assets Control as well, which is responsible for sanctions enforcement. Notably, the office recently sanctioned a Chinese company for alleged involvement in cyber attacks.

According to an article published by Bloomberg, Silk Typhoon, a Chinese group, is behind these cyber attacks. The group was involved in an attack on Microsoft Exchange Server as well.

The Chinese embassy in Washington, D.C., spokesperson Liu Pengyu denied Chinese involvement in hacking operations once again.

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Biden extends sanctions on Hong Kong officials

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US President Joe Biden has signed legislation extending the Hong Kong Human Rights and Democracy Act of 2019 for another five years. The Act authorizes sanctions on key Chinese officials and authority figures, justified by violations of Hong Kong’s autonomy and the suppression of fundamental rights, including freedom of expression and assembly.

The legislation is included in the annual National Defense Authorization Act (NDAA), which outlines the budget and U.S. military policy for the upcoming fiscal year. Alongside the extension of the Hong Kong Act, the Reciprocal Access to Tibet Act and the Uyghur Human Rights Policy Act were also renewed.

Hong Kong and Beijing have condemned the U.S. sanctions, warning Washington that such measures are ultimately detrimental to the United States itself. They argue that the sanctions risk undermining the longstanding trade relationship between the U.S. and Hong Kong.

The severity of U.S. sanctions is reinforced by the dominant influence of the U.S. dollar in the global financial system. Individuals targeted by these measures face both financial restrictions and travel bans, amplifying the impact of the sanctions.

Hong Kong’s current Chief Security Officer, Carrie Lam, has stated that she evaded U.S. sanctions by receiving her salary in cash and keeping it at her residence.

In addition to the above, the U.S. State Department announced further sanctions in November, primarily focusing on visa restrictions.

The decision to impose these measures was made by the U.S. after 45 opposition representatives were arrested in Hong Kong on charges of attempting to overthrow the government.

In response, China is imposing sanctions on American individuals whose actions (concerning Hong Kong) it deems unfavorable.

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Russia is Reducing Investments in One of the Main Sectors of Trade with China

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One of Russia’s main trade channels with China is experiencing significant disruptions as Russia’s war-torn economy, under pressure, has significantly slowed the country’s railway industry. It should also be noted that the railway system is a necessary component for trade between Moscow and Beijing.

During the first nine months of 2023, more than 128 million tons of cargo were transported by rail between the two countries. This represents a 51.5 percent increase over the same period in 2022 recorded last year.

Sanctions have made it more difficult for Russian exports and imports of technology. Russia has increased its imports of military technology and equipment from “Third World” countries, including China. According to the Atlantic Council, increased rail trade with China has thwarted the desired goal of Western sanctions, involving isolating Russia’s economy and fueling Putin’s wartime resource shortages. 

Despite the positive indicators recorded last year, the current situation does not look so favorable. Russia’s rail industry is facing its sharpest slowdown since the Great Financial Crisis, and the trend is on the rise, according to a report from Russian research firm MMI Research. 

MMI data cited by Bloomberg show that the volume of cargo carried by Russian State Railways in the first 11 months of 2024 fell by 5% compared to last year. This slowdown is partly due to Russia prioritizing the transportation of war-related materials. All this hampered the transportation of such important goods as coal and aluminum.

The reduction of investments in Russian railways is another factor that causes the mentioned slowdown. According to the state news agency Tass, high interest rates in the country make project financing even more difficult.

In addition, as reported by Tass, in 2025 Russian Railways plans to allocate only 890 billion rubles ($8.5 billion) for the investment program, which means that compared to 2024, this figure will decrease by 30%. As reported by the Russian news outlet Kommersant, the company may reduce investments by another third by the end of the decade.

The changes are also bad news for Russia’s trade with China, which depends on rail transport due to Western sanctions. Russia invested billions in railways in early 2024 to boost trade with China, but ongoing economic woes continue to hamper progress.

The issues discussed above highlight the growing costs of Russia’s war against Ukraine, which is causing the country many economic challenges. It is also significant that earlier this year, to combat high inflation, the Central Bank of Russia raised interest rates to a record 21%. In a decision last week, the bank kept interest rates on hold because of what they believe are risks of excessive cooling in Russia’s war economy.

It should be noted that Russia’s military strategy is completely dependent on its railway networks. Railroads are logistically critical to Putin’s all-out war in Ukraine. With relatively limited alternatives for large-scale transportation, Russia needs efficient railroads to move troops, equipment, and supplies.

Ukrainian intelligence services and guerrilla groups are working with Russian anti-war groups to strategically target Russian railway logistics points. “Stop the Wagons” is one of the most famous Russian political groups that express their opposition to Russia’s war in Ukraine by sabotaging railway infrastructure.

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New wave of mass protests in Serbia – students demand release of documents on train station restored by Chinese companies

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After nearly two months of non-stop demonstrations, the largest protest in decades took place in Belgrade, the capital of Serbia, on Sunday, December 22. Since the first week of November, protesters have been demanding the resignation of President Vučić and his ruling party, the Serbian Progressive Party. They accuse the current leader of corruption, nepotism and lack of transparency– all of that, as they think, has been s a concomitant event during the renovation works in Novi Sad.

The train station has undergone two renovations in recent years as part of questionable mega projects involving Chinese state-owned enterprises. All these led to poor workmanship and ultimately to the death of 15 people on November 1 when a ceiling collapsed at the Novi Sad train station.  

The Novi Sad railway station underwent a major renovation as part of a Chinese-led project to upgrade Serbia’s railway network, focusing on the route north from Belgrade. This effort is tied to China’s expansive Belt and Road Initiative, aimed at speeding up the transport of Chinese goods to Europe.

Renovation work began in 2021, with parts of the station unveiled during the 2022 election campaign. However, reconstruction continued until July 2024, when local authorities announced that the station had been rebuilt “to European standards.” According to Novi Sad news outlet 021, key documents related to the renovation were classified as confidential.

Chinese investments in Serbia—spanning infrastructure, mining, and surveillance—have often been surrounded by controversy, with persistent concerns about standards and transparency. In 2021, a construction permit was issued for the complete overhaul of the railway infrastructure between Novi Sad and the Hungarian border. The permit mentioned the “reconstruction, adaptation, and extension” of Novi Sad’s railway station but didn’t specify which parts of the building would be impacted. Among the supporting documents was a project titled “Architecture Project for the Extension and Adaptation of the Underpass and Canopy of the Novi Sad Railway Station,” though it offered no additional details.

Within days of the catastrophic event, Transport Minister Goran Sevic, the Serbian State Railways Company, the State Transport Institute, and the Chinese consortium – China Railway International Co. Ltd. and China Communications Construction Company (CRIC-CCCC), which was involved in the renovation of the building, denied the allegations and stated that the ceiling that collapsed was not part of their work. But they were soon exposed. The footage shared on social media indicates that the collapse may have been triggered by the weight of newly installed heavy glass. “It’s not true that no work was done on the awning, because it was covered with glass post-factum,” said geologist and engineer Zoran Đajić, who supervised the railway station reconstruction works until 2023, to the domestic press. 

Although CRIC and CCCC assert that they did not directly construct the canopy, legal experts contend that, as umbrella contractors, they hold responsibility for the performance of their subcontractors. This brings up wider concerns regarding the quality and safety of BRI projects, especially those involving local subcontractors.

When asked about unconfirmed reports of an extraordinary inspection of other projects involving CRIC and CCCC, Vucevic stated, “I will never take part in this potential anti-Chinese hysteria that is being imposed…“. After, he also mentioned sarcastically, that maybe they should arrest all the representatives of Chinese companies.

To eliminate the lack of transparency and identify the main culprits, the participants of the action are demanding the opening of restoration work documents and declarations, as well as holding those responsible for the case accountable.

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China imposed sanctions on two Canadian institutes and their employees

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China announced sanctions against two Canadian institutes and 20 individuals. These measures targeted the Uygur Rights Advocacy Project, the Canada Tibet Committee, and their employees. With the sanctions, China froze their assets and barred them from entering the country.

The organization working on the rights of the Uygurs frequently talks about the human rights violations from Beijing concerning this mostly Muslim ethnic minority, which includes the mass use of forced labor in camps. The Chinese side denies the accusations.

As for the Canada Tibet Committee, it aims to research the seizure of control of Tibet by China in 1950 and what’s described as „oppressive rule“ in Tibetan areas by international human rights groups and exiles.

Notably, the Chinese sanctions are viewed as countermeasures to Canadian sanctions announced on December 10th. The Canadian side based its decision on Chinese state-led human rights violations against religious and ethnic minorities. In the statement, they focused on Xinjiang, mostly populated by Uygurs, and Tibet, as well as those who face problems for practicing the Falun Gong religion. The sanctions imposed by Canada include the freezing of assets of eight former and current Chinese officials. Chinese Foreign Affairs Ministry speaker talked about the history of human rights violations from the Canadian side in response to this step taken by Ottawa and stated, that Canada often „spreads lies about the so-called human rights issue in China“.

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Arab States Urge China to ‘Take Greater Role’ in Promoting Middle East Peace

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China has been urged to “play a greater role” in promoting peace in the Middle East, with over 20 Arab diplomatic envoys meeting Chinese Foreign Minister Wang Yi in Beijing. According to a Chinese foreign ministry statement released after the meeting on Thursday, the envoys expressed their concern over the “sudden” changes in the Middle Eastern situation and the suffering of the people in the region. They emphasized their expectation for China to help ease the tensions.

Wang Yi highlighted that the Middle East belongs to its people and should not become a stage for major powers to engage in power games. He warned against the region falling victim to geopolitical rivalries.

Addressing the Palestine issue, Wang called for a “comprehensive ceasefire,” the permanent withdrawal of troops from Gaza, and a resolution based on the “two-state solution.” On Syria, he urged all parties to consider the long-term interests of the country and its people by engaging in an open and inclusive political process to prevent the resurgence of terrorism.

Meanwhile, the United States has disclosed that it has 2,000 troops in Syria, more than double the previously reported number, while Israeli airstrikes continue in Gaza, Syria, and Yemen. In Syria, where Bashar al-Assad’s regime collapsed earlier this month, rebel leader Ahmed al-Sharaa, told the BBC that the country was exhausted by war and posed no threat to its neighbors or the West.

China on Tuesday warned the new Syrian government against supporting terrorism after a Syria-based Islamic militant group Turkistan Islamic Party sent a message to Muslims in China’s Xinjiang region, urging them to wage jihad in China. 

Earlier, China stressed the importance of maintaining Lebanon’s sovereignty, security, and territorial integrity. In September, Wang condemned the “indiscriminate attacks against civilians” by Israeli forces, which had launched several deadly attacks on Lebanon targeting the militant group Hezbollah. “We will always stand on the side of justice and our Arab brothers, including Lebanon,” Wang told his Lebanese counterpart during the annual United Nations General Assembly in New York, attributing the situation to the spillover from the war in Gaza. 

“China and Arab countries are good friends and partners who share the same ideals and work together for development,” Wang said, adding that China would continue to support Arab nations in achieving strategic independence and unity. He pledged efforts to create a peaceful and stable Middle East.

Witnessing the shifting alliances, it is important to recall the previous Chinese-Israeli partnership which was marked by the signing of an “Innovative Comprehensive Partnership” in 2017, making China Israel’s largest trading partner. Israeli Prime Minister Benjamin Netanyahu once called this relationship “a marriage made in heaven.”

Financial incentives remain strong for maintaining the relationship. Israel’s ongoing conflict has hurt its GDP and credit rating, complicating fundraising efforts for Israeli firms. China, Israel’s third-largest trading partner before October 7, remains essential to Israel’s economy.

Amidst China’s shifting attitudes towards Israel, some Israeli private sector leaders have even suggested financial repercussions, such as banning Chinese companies from operating in Israel’s ports.

On October 14, 2024, China’s Foreign Minister Wang Yi, spoke with Israeli Foreign Minister Israel Katz at Katz’s request. Katz reaffirmed that developing relations with China is a long-standing policy of Israel and serves the mutual interests of both nations. He also reiterated the Israeli government’s consistent stance on the Taiwan issue. Wang Yi emphasized that China remains committed to a stable and continuous policy towards Israel and is prepared to resume comprehensive exchanges as soon as the situation improves.

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Warsaw Chopin Airport to Phase Out Nuctech Scanners Over Security Issues

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Warsaw Chopin Airport has made the pivotal decision to phase out the security scanners manufactured by the Chinese company Nuctech, a move that was confirmed by an official from the airport on Wednesday. This decision arises from growing security concerns that were highlighted in an assessment conducted by Poland’s Civil Aviation Authority.

Piotr Rudzki, the airport’s communications chief, explained the situation, stating, “Just like the later position of the Ministry of Infrastructure, the recommendation was that these devices may not be safe and therefore it is recommended to refrain from using them.” He shared this information with Reuters but noted that Nuctech did not respond to requests for comment about the decision.

Currently, the airport operates four large Nuctech scanners that are employed for screening checked luggage. However, plans are already in place to replace these machines with new models from a Polish consortium named Dimark-Anglosec, with the transition expected to be completed by March 2025.

Nuctech, known for its production of body and luggage scanners used in airports and ports worldwide, has faced significant scrutiny. In 2020, the company was blacklisted by the U.S. government, which cited national security concerns as the reason for this action. The scrutiny over Nuctech doesn’t stop there. In 2022, European lawmakers in Strasbourg expressed alarm over a proposed deal to purchase Nuctech’s baggage scanners. They advocated for an independent investigation to explore possible spying risks linked to the technology before any commitment to the deal was made.

This development at Warsaw Chopin Airport reflects not only a growing awareness regarding security in air travel but also highlights the critical importance of carefully evaluating the technological partnerships that are fundamental to maintaining safety in the aviation industry.

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European Commission Investigates TikTok for Alleged Interference in Romanian Election

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The European Commission has launched a formal investigation under its robust digital laws to examine TikTok’s alleged involvement in undermining the integrity of Romania’s recent presidential election. The electoral process in this EU and NATO member state was disrupted amid claims of “aggressive hybrid action” by Russia, aimed at subverting the first round of voting in November.

Romania’s constitutional court recently annulled the first round of the election just before the scheduled run-off. The initial round had unexpectedly been won by far-right candidate Calin Georgescu. Authorities have focused on TikTok, a Chinese-owned social media platform with growing influence in Europe, as a central figure in the controversy.

Georgescu’s unexpected rise to prominence was largely credited to a viral campaign on TikTok, which brought him into the limelight. Romanian officials promptly noted that this campaign did not adhere to electoral regulations. The European Commission now suspects that TikTok’s “recommender systems” may have been vulnerable to “coordinated inauthentic manipulation or automated exploitation.”

Additionally, the Commission is scrutinizing TikTok’s policies on political advertising and paid content, following reports that influencers were compensated to promote Georgescu without proper disclosure of sponsorship or political motivation.

European Commission President Ursula von der Leyen commented, “Following serious indications that foreign actors interfered in the Romanian presidential elections by using TikTok, we are now thoroughly investigating whether TikTok has violated the Digital Services Act by failing to tackle such risks. It should be crystal clear that in the EU all online platforms, including TikTok, must be held accountable.”

This investigation is part of the Digital Services Act, a comprehensive regulation aimed at overseeing the operations of online platforms, which came into effect last year. TikTok has previously faced several investigations under this legislation and has made efforts to comply with its requirements. Last week, the Commission ordered TikTok to retain data related to the election collected between November this year and March next year for potential future investigations.

During a European Parliament hearing on December 3, TikTok representatives defended their practices. Brie Pegum, TikTok’s global head of product, authenticity, and transparency, stated that in the three months leading up to the Romanian election, the platform had removed over 66,000 fake accounts, 7 million fake likes, and prevented an additional 40 million fake likes. TikTok also removed 10 million fake followers, blocked 216,000 spam accounts, and eliminated 1,000 accounts impersonating Romanian political candidates.

Pegum also mentioned that TikTok had shut down two clusters of accounts supporting candidates, including Georgescu, for not complying with rules that require political content to be clearly labeled. Caroline Greer, TikTok’s top lobbyist in Europe, addressed concerns about user data potentially being transmitted to China. She highlighted TikTok’s Project Clover, which ensures that European user data is stored within Europe and monitored by a third-party cybersecurity firm 24/7.

Declassified intelligence from outgoing President Klaus Iohannis revealed that paid support for Georgescu on TikTok was not marked as election-related content, unlike the content for other candidates. One TikTok account reportedly spent $381,000 in a single month from October 24 to pay influencers supporting Georgescu.

Authorities also reported over 85,000 attempts to hack electoral data systems before and on the day of the first round, attributing these efforts to “state-sponsored actors.” 

Since the election’s annulment, media reports indicate that influencers allegedly involved in the manipulation fled Romania as tax authorities began to pursue them. According to Politico, some influencers posted farewell messages near land borders or on airplanes, signaling their departure before financial investigations began.

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Chinese National with Ties to British Prince Suspected of Espionage

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A Chinese national with close ties to Prince Andrew has denied any wrongdoing and rejected claims that he is a spy after being named in court as a suspected Chinese agent by British authorities. Yang Tengbo, identified in a recent ruling by the Special Immigration Appeals Commission (SIAC) as a “close confidant” of Andrew, waived his right to anonymity on Monday to address the allegations. 

“I have done nothing wrong or unlawful, and the concerns raised by the Home Office against me are ill-founded,” said Tengbo in the statement, that his lawyer released. He also mentioned that a very common description of him – “spy”- is “entirely untrue.”

In a letter from July 2023, cited in the SIAC ruling, the UK’s Home Office informed Yang that they had reason to believe he was “engaging, or had previously engaged, in covert and deceptive activities on behalf of the United Front Work Department (UFWD), a branch of the Chinese Communist Party (CCP) state apparatus.” The ruling indicated that evidence from Yang’s phone showed Prince Andrew had authorized him to establish an international financial initiative aimed at engaging potential partners and investors in China. However, the ruling did not clarify the specific purpose of the fund.

British intelligence agency MI5 has been investigating the money Andrew has been receiving from China, while The Times has stated that Prince Andrew has previously invited Yang Tengbo to several monarchic belongings, such as Buckingham Palace, St James’s Palace, and Windsor Castle.

Yang, who lived between the UK and China for nearly 20 years, ran the Duke of York’s PitchatPalace in China. Court documents show he was also authorized to act on Prince Andrew’s behalf in business dealings in China. He has been pictured with two former Conservative prime ministers, Theresa May and David Cameron, and is known to have met other politicians, including former deputy prime minister John Prescott.

Security Minister Dan Jarvis has said that a planned overhaul of security laws, which would require individuals working for foreign governments to disclose this or face criminal charges, won’t be ready until the summer of 2025. His Conservative predecessor, Tom Tugendhat, added that MI5 had warned the government the new law would be ineffective unless China was identified as the top security threat.

On Monday, a spokesperson for China’s Foreign Ministry stated that China had always been transparent and never engaged in deception or interference. The spokesperson dismissed the accusations as “groundless speculation” not worth addressing.

 In an early Tuesday statement, the Chinese embassy in London urged the UK to “immediately cease creating trouble, stop anti-China political manipulation, and refrain from undermining normal personnel exchanges between China and the UK.”

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