Struck with Western sanction: This border town in China is quietly fueling Russia's war economy

Russia had been under the sanctions from the West as early as the 2010s, specifically after 2014, since the annexation of Crimea. But Chinese President Xi Jinping had been Russia's ally for a long time. On the windy plains of inner Mongolia, in the borders of Russia and China, a dusty town of just 200,000 people is playing an outsized role in the survival of a global pariah.

Welcome to Manzhouli, a sleepless border town in China that has quietly transformed into the lifeline of the Russian Economy. Manzhouli, also known as the gateway to the east, is China's largest inland port with direct rail and road links to Russia via the Trans-Siberian and Chinese Eastern Railway. Nearly 60 per cent of all freight flown between the nations is handled by this town. With hundreds of trucks and railcars crossing the border regularly.

After Russia launched its full-scale invasion of Ukraine in February 2022, it faced severe sanctions from Western nations. But China's staunch support of Russia's economy has helped them survive. Export to China accounts for nearly 6 per cent of the Russian economy.

It started as a gateway for raw material; now it accounts for processing them as well. Russian timbers, methanol, rapeseed oil, and liquefied petroleum gas are now being refined in Manzhouli-based industrial hubs. These facilities give Russia a backdoor entry to the Western market.

“The raw goods come in, we refine them here, and export them further,” said a local logistics manager quoted by The New York Times. “Everyone benefits. Especially the Russians.”

Local authorities have heavily invested in the infrastructure, adding truck lanes, expanding rail yards, and fast-tracking customs technology. The trade has increased 10 per cent Y-o-y, and local revenue from Municipal taxes has crossed ¥2 million.

Huang Baoqiang, a managing director at a lumber mill in Russia, said they bought large quantities of lumber from Siberia and turned them into bed slats. The US Treasury Department has banned the use of Dollars, but they were able to pay with Rubles and Chinese renminbi through VTB bank. The bank has also faced sanctions from the US and the European Union.

When the world is building walls, Manzhouli is building freight lanes. Critics argue that China have positioned itself to sustain Russia in its war with Ukraine. While doing this, it's not only reaping economic dividends but also expanding its geopolitical influence.