Asia
Russia-China trade volume hits $240 billion as Putin hails historic ties
The surge in commercial and economic relations between Russia and China was underscored at the China-Russia Bilateral Trade and Investment Fair in Harbin, an event coinciding with Russian President Vladimir Putin’s state visit to Beijing.
Evaluations reported by the Financial Times emphasized that economic bonds between the two nations are strengthening daily. Following the launch of Russia’s military operation in Ukraine in 2022, bilateral trade volume recorded a rapid acceleration, reaching historic peaks.
The newspaper noted that Chinese companies have played a decisive role in this growth by occupying the market share vacated by Western suppliers following their withdrawal from the Russian market.
Jiang Ting, sales manager at the China-based Zhejiang Xibeihu Special Vehicles, which produces amphibious all-terrain vehicles, stated that Russia has been one of their primary export markets from the beginning. Jiang noted a significant increase in orders from Russia over the last two years, attributing this development to the rise in demand created by the conflict in Ukraine.
Jiang further explained that the company does not track the end-users of the vehicles, noting that the equipment can be utilized for transporting personnel and cargo across wetlands, marshes, and mountainous terrain.
Xia Er, a representative of the import firm Jiaowu Beidahuang Agricultural Holdings, reported that the trade war between the US and China has led to a reduction in Chinese corn imports from the US, despite rising demand. During the same period, relations between Russia and China improved, with Russian corn seeing heavy demand in the Chinese market. Xia shared data indicating that her company’s corn imports from Russia have surged from 2,000 tons per month to 90,000 tons over the last five years.
Wang Haoyue, a representative for Huashen International, a manufacturer of medical supplies and cosmetic devices, announced that the company has submitted applications for export licenses targeting Russia.
At the fair, a Chinese vendor who requested anonymity disclosed that they supply furniture belonging to a well-known Danish brand directly from factories in China to sell to Russia via the internet. The seller noted that the withdrawal of Western brands from the Russian market has created new opportunities for them, adding that the Denmark-based manufacturer is unaware of the situation.
Wang Changchun of Heilongjiang Luge New Materials, a seller of prefabricated ready-made homes, reported increased demand from clients in Moscow and Vladivostok due to Western sanctions and the increasing difficulty for Russian citizens to travel to Western countries.
Numerous traders attending the fair reported that the Chinese yuan and Russian ruble are being used increasingly in commercial transactions in place of the US dollar. It was noted that Chinese companies have established dedicated subsidiaries to decouple their Russian commercial activities from their parent companies, aiming to protect themselves from sanctions risks.
Entrepreneurs further stated that local financial institutions, particularly small regional Chinese banks, continue to facilitate these transactions.
In Harbin, the capital of the border province of Heilongjiang, commercial relations with Russia have a deep historical background. The city’s foundations date back to Russian workers employed in railway construction during the 19th century, and it continues to carry Russian traces in its architecture, cuisine, and social life. This trade fair is held alternately in Harbin and the Russian city of Yekaterinburg.
At this year’s fair, Chinese companies showcased construction equipment, building materials, electronic products, and logistics services to Russian buyers. According to information on the official website of the Russian National Center, Russia’s participation and offerings were primarily focused on cultural elements.
On May 20, the second day of his visit to China, Vladimir Putin stated that relations between Moscow and Beijing have reached their highest level in history. Putin emphasized that bilateral trade volume has grown more than 30-fold over a quarter-century, surpassing the $200 billion threshold for several consecutive years to reach approximately $240 billion by 2025.
As part of the state visit, 40 inter-agency and corporate agreements were signed, and a joint declaration regarding the development of bilateral relations was adopted.
Previous reports by Bloomberg, citing sources close to the Russian government, indicated that Moscow aimed to resolve hurdles regarding the Power of Siberia 2 pipeline project during this visit. However, the Financial Times reported that a final agreement on the project has not yet been reached. According to the newspaper, Russia’s largest energy companies, Rosneft and Gazprom, were not represented at the Harbin fair.
Asia
China weighs restricting foreign access to advanced AI models and tightening technology controls
China is considering restricting overseas access to its most advanced artificial intelligence models, including designs that have not yet been publicly released.
According to a Reuters report citing three sources familiar with the matter, the government in Beijing is increasing its control mechanisms to protect the domestic AI sector and its proprietary technologies.
Officials from the Chinese Ministry of Commerce have held a series of meetings over the past month with the country’s leading AI developers and technology giants. Represented at these discussions were major corporations including e-commerce platform Alibaba, TikTok owner ByteDance, and information technology firm Z.ai.
The meetings focused on potential restrictions that could be imposed on the distribution of China’s most modern AI models.
Sources said that Beijing plans to increase criminal liabilities for the leak or theft of AI technologies, treating such actions as equivalent to violations of national security law.
Other topics discussed during the meetings included the introduction of additional limitations on the funding of China-based AI startups.
The final framework of the new measures has not yet been established. Sources indicated that the potential restrictions might only affect models developed in the future. The date on which these regulations would take effect remains unknown.
Following the launch of the Chinese-developed DeepSeek R1 model, the country’s AI solutions strengthened their position in the global market by offering low costs and high performance. Industry analysts note that blocking foreign users from accessing these technologies could impact the global AI market and increase costs for companies that rely on Chinese models.
Beijing continues to expand its oversight of the domestic AI industry. According to Reuters, authorities initiated investigations earlier this year into several Chinese AI companies that had relocated their operations abroad. Controls have also been tightened on commercial transactions involving technology, data, and national security.
According to a report by the Financial Times citing internal sources, Beijing is also discussing plans to reduce the number of publications that Chinese scientists submit to foreign academic journals.
The report emphasized that these discussions are driven by growing concerns over technology leaks and a desire to strengthen state control over the dissemination of scientific research results.
In 2024, Chinese academics authored approximately one-third of all publications indexed in the Science Citation Index (SCI) database, which encompasses leading international scientific journals.
Industry experts state that China is transitioning from its previous goal of expanding its international scientific presence to a new phase focused on controlling the usage of technologies developed within its borders. According to these experts, Beijing aims with these moves to both protect its national security and maintain its leverage in the global scientific community.
Asia
China launches submarine missile into Pacific, triggering alarm in Japan, Australia, and New Zealand
China’s military launched a missile into the Pacific Ocean from a nuclear-powered submarine on Monday, triggering expressions of concern and criticism from regional nations including Japan, Australia, and New Zealand.
The nuclear-powered submarine, belonging to the People’s Liberation Army Navy, launched a missile carrying a dummy warhead into international waters in the Pacific at 12:01 p.m. (0401 GMT), the official Xinhua news agency reported.
The agency stated that the missile landed in “designated waters” but did not provide further details regarding the specific location.
Xinhua characterized the launch as a “routine arrangement” within China’s annual military training program, adding that the test was not directed at any specific country or target.
Australian Foreign Minister Penny Wong said that Beijing had notified the Australian government of the planned test, but she nevertheless described the launch as “destabilizing” for the region.
Speaking at a press conference in Suva, the capital of Fiji, Wong argued that the test took place in a context where “China is rapidly building up its military, yet failing to offer the transparency and reassurance regarding its intentions that the region expects.”
The missile test occurred only hours after Australia and Fiji signed a major defense alliance on Monday. The agreement provides that if either party is attacked, the other will come to its assistance.
Beijing and Western powers, led by the US and Australia, have competed for influence in the strategically located island nations for years, with China seeking to expand its economic and security footprint across the South Pacific.
When asked about the defense pact, Chinese Foreign Ministry Spokesperson Mao Ning said China hoped the relevant countries would respect the independence and autonomy of the island states, and refrain from targeting third parties or harming their interests.
Test conducted hours after notification
New Zealand Foreign Minister Winston Peters declared that his country was deeply concerned by the test.
“Despite our long-standing concerns regarding such activities, it appears China conducted the test only hours after notifying us,” Peters said in a written statement.
“New Zealand views this as an unwelcome and concerning development. Like our neighbors in other Pacific nations, we have no interest in China using the South Pacific as a testing ground for missile capabilities,” he added.
The Japanese government announced that it had been notified of the missile launch and had called on China to reconsider the decision.
“We have expressed our serious concern regarding the increasing activities of the Chinese military,” Tokyo said in a statement. Japanese officials also noted that Chinese authorities had notified the Japan Coast Guard on Sunday regarding space debris that could fall within Japan’s exclusive economic zone.
The missile landed outside Japan’s exclusive economic zone, the Kyodo news agency reported on Monday, citing a Japanese government source.
Japanese Chief Cabinet Secretary Minoru Kihara told a press conference that there had been no reports of damage to Japanese aircraft or vessels resulting from the test.
Responding to the criticism from the region, Mao said the launch was conducted “in a safe, compliant, and professional manner from start to finish.”
“We hope the relevant countries do not overinterpret the matter,” Mao said during a press conference in Beijing.
It is rare for China to launch long-range missiles into the sea. China last conducted an intercontinental ballistic missile test in 2024, a launch that demonstrated the country’s growing military capabilities.
The latest test comes at a time when the US and its allies have been increasing their military activities in the region to counter China. In response to these military exercises, China has also been stepping up its own military activities in the area, including joint exercises with Russia.
Asia
South Korea unveils $518 billion plan for new southwestern semiconductor cluster
South Korea plans to develop a new semiconductor manufacturing hub in the southwestern region of the country through an 800 trillion won ($517.9 billion) corporate investment, which will establish four memory chip production facilities, Industry Minister Kim Jung-kwan announced on Monday.
Kim disclosed the investment plan, which aims to transform the Gwangju and Jeolla regions into the country’s second-largest semiconductor cluster alongside the existing hub in the Seoul metropolitan area, during a national investment briefing chaired by President Lee Jae Myung at Cheong Wa Dae.
“To meet the rising demand for semiconductors, relying solely on a single production base in the Seoul metropolitan area is no longer sufficient,” Kim said, noting that constraints on power and water resources under current plans limit further expansion.
The semiconductor investment is part of the government’s “three mega projects” initiative. This initiative envisions large-scale investments by chip giants such as Samsung Electronics Co. and SK hynix Inc., alongside other companies, in the fields of semiconductors, physical artificial intelligence, and AI data centers.
To meet the increasing packaging demand as chip production expands, the Chungcheong region will be transformed into an advanced semiconductor packaging hub with an 81 trillion won investment, Kim said. He added that the Daegu and North Gyeongsang regions will be developed as innovation hubs for semiconductor materials, components, and equipment.
Kim also stated that the government will assist companies in accelerating their semiconductor investments by bringing forward the construction schedule of the new manufacturing facilities by up to 12 years. Consequently, the construction of the plants will be moved to the mid-2030s instead of the mid-to-late 2040s.
To support this expansion, the government has committed to streamlining permitting and construction processes, as well as investing in critical infrastructure, including the supply of electricity and industrial water.
At the meeting, which was also attended by Samsung Electronics Chairman Lee Jae-yong and SK Group Chairman Chey Tae-won, Kim presented a plan for a 30 trillion won investment by the government and industry over the next 15 years to support the entire semiconductor value chain, from research and development and chip design to testing and manufacturing.
The ambitious industrial roadmap aims to transform the country from a global manufacturing powerhouse into a leading player in the era of artificial intelligence. At the core of the strategy are semiconductors, AI infrastructure, and physical AI.
Regarding the robotics sector, Kim said the government will develop the AI-powered robotics industry to strengthen South Korea’s manufacturing competitiveness amid intensifying global competition.
Kim warned that China has already begun mass-producing humanoid robots through regional manufacturing hubs, emphasizing that South Korea must accelerate the commercialization and mass production of its own humanoid robots.
“We must accelerate the foundation for mass production,” Kim said, adding that the government plans to generate early domestic demand by supplying humanoid robots in the fields of education, defense, and disaster response.
The initiative aims to increase South Korea’s share of the global humanoid robot market to 20% in the long term, up from just 1% last year.
As the third pillar of the strategy, the government announced an ambitious plan to expand the country’s AI data center infrastructure.
In collaboration with SK Group, GS Group, and portal operator Naver, the government plans to invest approximately 550 trillion won by 2029 to construct AI data centers with a total capacity of 8.4 gigawatts (GW). The total investment is expected to exceed 1,000 trillion won by 2035, expanding capacity to 18.4 GW.
To support this initiative, the government has pledged to secure sufficient power and industrial water supplies and to strengthen the energy infrastructure around existing semiconductor clusters.
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