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How The “Russian Davos” Exposes Putin's Utter Dependence On China

The Spief, the political-economic forum dear to the Russian president, takes place this weekend in Saint Petersburg. The West will be absent, as the Kremlin increasingly appears beholden to Beijing.

Image showing March 21, 2023, Moscow, Russia: China's President XI Jinping (on the left) and Russia's President Vladimir Putin are seen during a state dinner hosted by the Russian president at the Faceted Chamber in the Moscow Kremlin.

March 21 Xi-Putin summit in Moscow

Pavel Byrkin/Zuma
Benjamin Quénelle


PARIS — Dubbed the “Russian Davos,” the annual affair had become a favorite Vladimir Putin ritual in his hometown of Saint Petersburg. Every year in mid-June, the head of the Kremlin was proud to show off his native city and attract foreign investors. Spief, the forum orchestrated to rally all the Russian political-economic elite and seduce the world’s top brass, featured panels by day and parties by night.

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Sixteen months after the beginning of the Kremlin’s “special military operation” in Ukraine, “it’s the end of the Spief”, says a European regular of the event. The forum is now a shadow of its former self. The “business” program pales into insignificance. But, above all, the guest list is looking bleak.

Without surprise, while the G7 just promised new sanctions against Moscow and the European Union is getting ready for an eleventh pack of measures, Western investors will be lacking in Saint Petersburg. But, for the first time ever, no Western journalist is allowed there.

Like others, Les Echos first received the organizers’ accreditation. Then the Kremlin came in behind: “hostile countries will be annulled,” said a high-level source. Of course, he’s talking about the accreditation cards, not the countries as such. But the Freudian slip reveals the current mood.

Excluded from the G8

The authorities’ message: Russia is not isolated. Spief must therefore welcome political leaders and businessmen coming from “friendly” countries. The guest of honor — which was France in 2018, with the presence of President Emmanuel Macron — is this year the United Arab Emirates. This “international” forum will be attended by African, Asian and South American guests. And maybe, like last year, by some from the Taliban.

But, in reality, there will not be many foreign delegations from the Global South, including among the BRICS members. Since he was excluded from the G8 and chose not to participate in the latest G20, it’s now officially Vladimir Putin’s preferred global arena.

On an almost permanent tour of the “Global South,” his Foreign Minister Sergey Lavrov has been criss-crossing African countries in particular.

image showing people walking past a SPIEF Shop at the ExpoForum Convention and Exhibition Centre, a venue of the 2023 St Petersburg International Economic Forum scheduled for June 14-17

RUSSIA, ST PETERSBURG - JUNE 13, 2023: People walk past a SPIEF Shop at the ExpoForum Convention and Exhibition Centre, a venue of the 2023 St Petersburg International Economic Forum scheduled for June 14-17.

Sergei Fadeichev/Zuma

“The deal of the century”

With the BRICS, Moscow wants to give itself an alternative to the “Western order” it denounces. Its main ally: China. When, last March, presidents Vladimir Putin and Xi Jinping met, they multiplied the “dear friends” and celebrated a “new era” between Moscow and Beijing.

Putin toasted a flagship project that is still hypothetical: “Power of Siberia 2”, the mirage gas pipeline that is to supply China’s powerful neighbor with some 50 billion m3 of Russian gas, originally destined for Europe. Vladimir Putin praised “the deal of the century”. At his side, Xi Jinping was more timid.

But it’s a fact: the economic partnership between the two old communist enemies, whose longstanding mutual distrust remains, is growing. In one year, all sectors combined, their trade has exploded, already reaching a record $190 billion (+30%) in 2022. The cooperation is coming true.

China has largely replaced Europe as the top market for Russian oil. The share of the yuan in Russian foreign trade currencies has soared from 0.5% to 16% in the span of a year. In the Russian Far East, special economic zones are being set up to welcome Chinese investors, who are also very much involved behind the scenes in the development of the “new trade route” to the North, in the Arctic.

Beijing in charge

It’s also more and more visible in the streets of Moscow, as well as in other big cities. Kia and Hyundai, Renault and Volkswagen are of course still omnipresent. But over the last months, Haval, Chery and Geely have made their presence clear. Chinese cars, manufactured in Russia or imported, now account for more than 40% of sales - against 7% in 2021.

Russia is becoming dependent on China.

According to experts, by 2025, they will represent about two thirds. Another sure sign: hotels are filling up with Chinese tourists. The lines of packed buses, a forgotten sight since Covid, are once again becoming part of the Russian urban landscape. In Moscow, as in Saint Petersburg.

The automotive industry, like other Russian industrial sectors, has to turn to China’s life-saving supply chains to make up for the damage caused by Western sanctions, maintain industrial production and satisfy the needs of a consumerist society.

In fact, Russia is becoming dependent on China. Vladimir Putin, who will parade this week at the Saint Petersburg forum, knows the relationship is unbalanced. Standing next to Xi Jinping in March, he admitted being “a little envious” of the efficiency of his powerful neighbor’s “leap forward”, of the system put into place to “develop its economy and strengthen the state”.

In Russia, Chinese businessmen are focusing above all on business, far from political theatrics. At the “Russian Davos”, barring any surprise, few will consider it useful to have made the trip.

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FOCUS: Russia-Ukraine War

The Science Of Designing A Sanctions Model That Really Hurts Moscow

On paper, the scale of sanctions against Russia following its invasion of Ukraine is unprecedented. But opinion on the impact of sanctions remains divided in the absence of a reliable scientific foundation. A new study by Bank of Canada offers a way out.

Photo of people walking past a currency exchange rate board in Moscow on July 20.

People walking past a currency exchange rate board in Moscow on July 20.

Ekaterina Mereminskaya


The world has never seen sanctions like those imposed against Russia in response to its invasion of Ukraine. There have been targeted sanctions, of course, or sanctions against rogue countries like North Korea with wide support from the international community. But never in history has there been such a large-scale sanctions regime against one of the world’s biggest and most important economies.

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Here's the thing though: these sanctions were introduced in a hurry because the West needed to respond to the war decisively. No one calculated anything, they relied on generalizations and holistic visions, they were “groping in a dark room,” as Elina Rybakova, senior researcher at the Brussels think tank Bruegel, put it.

As a result, debates around the effectiveness of sanctions and how best to use them to influence Russia continue to do the rounds.

Supporters of sanctions have a clear and unified message: we must stop Russia from being able to continue this war. We must deprive them of the goods and technologies necessary for the production of weapons and military equipment, and prevent Russians from living normal lives.

Opponents argue that the sanctions backfire. They insist that Russia is a large enough economy, highly integrated into the energy market and international supply chains, and therefore has enough resilience to withstand restrictions. Those who impose sanctions will be the ones to lose markets and suppliers. They will face increased energy prices and countless other problems. Russia will be able to replace lost relationships with new and even stronger ties with other states.

Economists at the Bank of Canada have attempted to resolve this debate and figure out who is hit hardest by sanctions. They pieced together a model featuring three parties: a country imposing sanctions, a country against which they were imposed, and a third independent country.

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