Russia Finds Many Ways Around Sanctions --- Booming China trade and 'Eurasian roundabout' bolster Putin's economy

"The West tried to cut off Russia's economy.

Two years later, Russia has engineered a wholesale rearrangement of its trade relationship with the world. Faced with punishing sanctions, it severed decadeslong connections with the West and deepened Moscow's dependence on China and other sympathetic nations.

The switch kept Russia's military industry and civilian economy alive in the process.

Here is how:

After Russia's trade with Europe cratered, China became Russia's economic lifeline. Trade between the two countries hit a record $240 billion last year.

Moscow sold China its oil that used to go to Germany and France. It massively stepped up purchases of Chinese goods for consumers and parts that go into weaponry.

Russia's use of the yuan has overtaken the U.S. dollar in its exports.

For years, Moscow had tried to de-dollarize its economy, without much success because most global commodity trade runs on the U.S. dollar.

But Western sanctions and booming Russian energy exports to China have added to the yuan's appeal. Payments in yuan for Russian exports have jumped to around one-third of the total.

Meanwhile, Russian companies are increasingly borrowing in yuan while households are stashing savings in it.

Before the sanctions, Russian oil and gas powered Europe's factories and heated its homes, and provided much of Moscow's budget proceeds.

The European Union's ban on most Russian oil and the bulk of Russian gas exports to the bloc have rearranged the global energy map.

Half of Russia's oil and petroleum exports in 2023 went to China, Moscow has said. India has also emerged as a big buyer as Russia has been forced to offer its oil at a discount to global prices because of a Group of Seven price cap.

Moscow has used a network of tankers not owned by Western countries or insured by Western companies to bypass sanctions, with some analysts estimating that more than half of Russia's seaborne oil is now transported with this shadow fleet.

Banned from acquiring many goods from the West, including consumer electronics and critical technologies, Russia has found a route through ex-Soviet republics.

In what has come to be known as the "Eurasian roundabout," Moscow has been able to source everything from goods with possible military use to Western washing machines and luxury cars, and Italian leather shoes.

Armenia is a case in point: U.S. and EU exports to the country, which retains trade links with Russia, have surged since the sanctions, including trade in dual-use goods that could have military use.

In turn, Armenia's exports to Russia have also jumped by a similar magnitude.

Despite Western sanctions, Moscow has acquired a third of its foreign-sourced battlefield components from companies based in the U.S., Europe or their allies, according to an analysis by the Kyiv School of Economics.

Russian companies have used an intricate supply chain through which computer chips and other dual-use items are designed in the West, manufactured in places such as China and the Philippines, sold via Hong Kong and shipped to Russia.

Such items then end up on Ukrainian battlefields in Russian weaponry such as the Tornado-S, a multiple-launch rocket launcher, as well the Kinzhal, a Russian hypersonic air-launched ballistic missile.

The sanctions changed things for Russian consumers. Western brands such as McDonald's were refashioned as Russian brands.

Foreign travel, which had been a fixture of middle-class life in the years before the sanctions, was upended.

But while Russians are taking fewer trips abroad than before the pandemic, they are still traveling and still filling up the beaches in places such as Dubai in the United Arab Emirates and Thailand." [1]

The second reason for the defeat of the West in Ukraine is that humanity did not join the Western sanctions and supports Russia. The limits of the West's influence on humanity became apparent. The West lost and lost a lot. Imagine how much the start of the movement from the dollar will cost.

1. World News: Russia Finds Many Ways Around Sanctions --- Booming China trade and 'Eurasian roundabout' bolster Putin's economy. Kantchev, Georgi.  Wall Street Journal, Eastern edition; New York, N.Y.. 26 Feb 2024: A.18.