- Russia plans to spend $4 billion improving railroad connections with China, Bloomberg reported.
- It's evidence of stronger ties between the two countries, as bilateral trade has soared.
Moscow is doubling down on its trade partnership with Beijing, outlining plans to invest billions in two key rail lines, Bloomberg reported.
Russian President Vladimir Putin called for a shipping capacity increase on the Trans-Siberian and Baikal-Amur Mainline, railroads that link Russia with China to the south. Meanwhile, around $4 billion is set to be spent on railroad infrastructure, and further investments could be approved this month.
It's a testament of tighter relations between the two nations, a partnership that has kept Russia afloat since its 2022 invasion of Ukraine.
In January and February of this year, bilateral trade totaled $37 billion, with Chinese exports into Russia jumping 12.5%. It's a momentum that extends from 2023's record volumes when trade totaled $240 billion.
"The two sides' political mutual trust continues to deepen. Russian natural gas is reaching households in China, while Chinese cars are driving on the streets of Russia," Foreign Minister Wang Yi said last week, describing the relationship as a "new paradigm."
Emphasis on rail improvements could also be a result of Russia's rising sea route difficulties, as Western sanctions increasingly curtail Moscow's efforts to export crude and other commodities. Recent months have witnessed tighter enforcement of a Group of Seven price cap on Russian oil, leading to sanctions on 50 vessels by early February.
The West's stricter approach is also eroding Russian trade with other key markets. For instance, Indian refineries have demonstrated diminishing willingness to pick up Russia's products, despite becoming the biggest buyer of Moscow's seaborne crude in 2023.
Russia's Energy Ministry is seeking priority to move oil by rail, Bloomberg said. This year could also offer fresh details on the creation of two new railroad connections with China by 2030, adding to the four pre-existing links.
Still, major investment is necessary as logistical issues plague the country's rail lines. In 2023, the railroads managed 13% less goods than their stated capacity allowed — bottlenecks were a norm even before Putin's war added to demand, which is now twice as high than what the system can handle.
The planned boost will bring shipping capacity on the two cited railroads to 210 million tons by 2030, compared with 150.5 million tons in 2023.