Thread
There’s some belief that Russia can simply pivot its trade to China/Asia and experience next to no side effects of Western sanctions. This is not true by any regard
Eastbound freight connection is almost entirely just the TSR, which is not built to handle a 10x increase in freight overnight & is egregiously expensive to expand. Russia’s manufacturing base is next to EU, not China, and added transport costs cannot be overcome easily
China’s import/export makeup is not Europe’s. China/Russia generally make the same middle income goods, and China does it better. Russia purposely avoided reducing tariffs in 2019 PTA
Btw EAEU/China for this reason
Btw EAEU/China for this reason
What is true for roads is true for pipelines. If EU shuts off the nozzle, Russian eastbound hydrocarbon exports are confined to smaller infrastructure coming out of less dense population centers.
The above point is compounded when you realize that only Western countries (including Japan here!) have the technical capacity for a lot of the fancy drilling projects Russia needs to get stuff out of the ground - neither China nor Russia can replace the West in this regard
As a last note, China doesn’t have nearly the capital market to replace Western investment in Russia, nor is the currency without its own problems. I am highly skeptical of arguments of “dedollarization”, because if it were to occur due to market conditions, it would have already