China Pounces on Russia’s Fire Sale of Prized Assets

A Chinese firm will purchase a coal mine in Russia that was on the verge of bankruptcy.

The move has been described as another instance of China capitalizing on Russia’s economic turbulence and comes amid complications in the countries’ “no limits” trading partnership that has developed during Moscow’s war with Ukraine.

Russian state news agency Interfax reported that an unnamed Chinese company would buy Inskaya Mine in the Kemerovo region that faced claims from Russia’s Federal Tax Service (FTS) of over $2 million and complaints from workers of unpaid wages.

In December, Russia reportedly sold its stakes in certain Kazakh uranium deposits to Chinese-owned companies. This week, Chinese ports refused entry to tankers carrying Russian oil that had been sanctioned by the U.S.

Newsweek has contacted the Russian and Chinese foreign ministries for comment.

Why It Matters

Russia has touted how bilateral trade with China has reached record levels since 2021. However, Western sanctions have added obstacles to the trading partnership with banks in China halting payments with some Russian lenders and a growing reluctance to purchase Russian oil.

What To Know

Russian news agency Interfax reported Wednesday that a Chinese company intends to buy 100 percent of the Inskaya coal mine.

In a social media thread, Ukrainian internal affairs adviser Anton Gerashchenko noted how Russia’s Federal Tax Service (FTS) had filed claims against the mine of more than $2.24 million and that an installment plan for the payments was set up.

Citing Russian media, he added that the mine’s general director had reported in October that four Chinese companies were ready to provide more than $23 million in funding for the site. “China will make the most of Russia’s weaknesses,” he wrote.

China has cut its purchases of Russian coal in the latest signal in a trading relationship between Russia and China that has become complicated.

The Shandong Port Group in China’s Shandong Province said it would block oil tankers named in U.S. sanctions from using its ports. As a result, three ships said to be part of Russia’s sanctions-busting shadow fleet were floating off the coast of China.

In December, Russia reportedly sold its stakes in certain Kazakh uranium deposits to Chinese-owned companies. This involved Kazakhstan’s nuclear resources company, Kazatomprom, and Russia’s Rosatom transferring interests to Chinese entities, National Security News reported.

In November, the plunging value of the Russian currency, the ruble, caused exporters in China to suspend sales on Russia’s e-commerce platforms. Meanwhile, many Chinese banks have tightened their restrictions on payments from Russia for fear of facing secondary sanctions.

What People Are Saying

Former Ukrainian internal affairs adviser Anton Gerashchenko, on X, formerly Twitter: “Chinese business has started buying out distressed assets from Russian entrepreneurs, Russian media report. China will make the most of Russia’s weaknesses.”

What Happens Next

The economic relationship between Russia and China is set to get more complicated in the coming months amid the latest tranche of sanctions imposed by the U.S. to punish Moscow for its invasion of Ukraine on February 24, 2022.