Xi Jinping and Vladimir Putin pledge to develop even closer China-Russia ties in energy and finance

China and Russia vowed on Thursday to build even closer ties in their energy and finance sectors and extract more benefits from their partnership in other areas, underscoring their mutual dependence in the face of Western sanctions.

Both countries plan further cooperation in oil, natural gas, liquefied natural gas, coal, electricity and other fields "according to market principles", according to a joint communique released after Chinese President Xi Jinping's meeting with his Russian counterpart Vladimir Putin in Beijing.

The leaders pledged to ensure the stable operation of cross-border infrastructure for unimpeded transport of energy.

Chinese and Russian firms will also seek to implement large energy projects and build cooperation in areas such as renewable energy, hydrogen and carbon markets, the statement added.

Expanding such cooperation will buttress an already solid mutual economic reliance. Last year, record bilateral trade of US$240 billion provided an important lifeline for Russia, which is under blanket sanctions from Western countries since it invaded Ukraine in 2022.

For China, Russia is its largest source of crude oil imports as well as an important destination of Chinese electric vehicles - which are themselves a target of European inquiries and US tariffs.

Maxim Kuznetsov, the chairman of the Russian-Asian Business Council, said that both countries still must work out conditions for key energy projects that remain in prolonged talks, including the signature gas pipeline, Power of Siberia 2.

"This project is crucial for Russian-Chinese energy cooperation but there are many questions that Russian and Chinese parts need to settle first," he said.

"Negotiations are complicated due to price and project configuration. Also, the question is how much every side needs to invest in this project."

Kuznetsov noted that there were no signs that the gas pipeline deal would be finalised soon.

To help reduce the impact of Western sanctions, Xi and Putin said they would increase the use of their currencies in bilateral trade, financing and other economic activities and improve financial infrastructure to smooth settlement channels.

The Kremlin said earlier that more than 90 per cent of commercial transactions between China and Russia were already being settled in yuan or roubles.