The expert highlights that a significant portion of Chinese goods enter the European market by rail through Belarus; thus, the closure of borders substantially affects China's interests. While most goods are shipped by sea, up to 10% of Chinese exports pass through Belarus, which remains a noticeable share.
The second issue is China's complete control over the rare earth metals market. China sets global prices and decides on resource access. Any Russian assertions about cooperating with Western countries in developing such resources are unlikely, given China's dominance in this sector.
According to the expert, Russia's economy faces severe difficulties: its growth rates are close to zero, and the country has entered stagflation. Monetary tools for managing inflation and production are contradictory, limiting the government's options.
Russia's budget deficit may reach $100 billion by year-end. Oil production and sales are mainly focused on China and India, to whom Russia gives significant discounts. Due to Western sanctions, shadow fleets and special supply schemes have increased.
Sanctions are forcing Russia to sell energy resources at reduced prices. Insurance companies, particularly from the US, play a key role in the sanctions regime's enforcement. If the US joined the European “price cap”, it would pose a serious challenge for Russia.
Europe is unlikely to impose harsh tariffs on Chinese goods, given its market dependency, but is considering targeted sanctions against selected refineries processing Russian oil. At the same time, EU countries are diversifying their energy supply, signing alternative gas contracts.
