The decline in Russian exports to China, particularly of timber and raw materials, is being driven by a combination of economic, logistical and structural factors. Demand for Russian roundwood and sawn timber has been hit hardest by China's protracted property-market crisis. In 2025 housing sales volumes in China fell to their lowest level since 2009, and in the first half of 2026 the floor area sold dropped by a further 11–14%, sharply reducing Chinese builders' need for imported raw materials.
Russia's share of the Chinese market is actively being taken over by other suppliers – above all Belarus and Canada, which offer more competitive prices. Buyers in China are increasingly turning to cheaper sawn-timber substitutes or diversifying their supply chains to reduce risk. Russian timber exporters are also up against congestion on the western section of the Trans-Siberian railway and across the entire eastern transport corridor. Slow wagon turnaround and bottlenecks physically limit the ability to get goods to buyers in Asia. Rising transport costs, meanwhile, eat into exporters' margins.
Despite domestic economic difficulties, the rouble's exchange rate against foreign currencies has periodically stayed relatively strong. That makes Russian goods more expensive and less attractive on foreign markets. Chinese banks and companies have grown more cautious about deepening trade ties with Russia, given serious concerns about being caught by Western secondary sanctions. Payments often have to be routed through complex intermediary schemes or cryptocurrencies, which makes transactions more expensive and slower.
The export decline is not confined to timber. China has also cut the volumes and value of its purchases of Russian crude oil, coal and refined petroleum products. As the export price rose, China stopped buying electricity from Russia's Far East, since it had become more expensive than domestic power.
A wave of bankruptcies in Russia
The latest data on Russian exports show that Russian sawn-timber exports to China fell by 30% in the first four months of 2026 compared with the same period a year earlier, to 2.6 million cubic metres, with revenue down 26% to 603.7 million US dollars. In 2025 China bought 11.2 million cubic metres of Russian sawn timber, half of all Russian exports, before the property crisis cut the country's housing sales by 9.5%, taking them to their lowest level since 2009. Russia's forestry and timber-processing sector, sawmills in particular, is currently going through its worst crisis in decades, triggering a wide wave of insolvencies and bankruptcies. Industry associations and regional lawmakers have formally warned the Kremlin that bankruptcy threatens up to 50% of the country's forestry companies by the end of 2026.
The collapse of export markets and China's “trap”
The mass insolvency and shutdown of sawmills is being driven by several interrelated factors. After the 2022 embargo, Russian sawmills, particularly in the country's north-west – Karelia, Komi and Arkhangelsk Oblast – lost the lucrative European market.
The Russians redirected almost all their exports to Asia, making themselves dangerously dependent on a single buyer – China, which took half of all their output. When China's property crisis began and demand fell, Russian sawmills were left with huge stockpiles of unsold goods. As Russian timber volumes in China shrank by almost 30% in early 2026, Belarusian and Canadian suppliers immediately stepped into the gap, sharpening competition and pushing prices down to unprofitable levels.
To help fund the war in Ukraine, the Russian government has sharply cut financial support for exporters. Export subsidies for the sector fell from 7.6 billion roubles (€85.6 million) in 2023 to a mere 550 million roubles (€6.2 million) in 2026. The government scrapped subsidies for shipping from north-western ports entirely, making it logistically unviable to transport timber to Asia.
The Russian government has raised corporate income tax from 20% to 25% and, since 2024, has applied retroactive recalculation of forest-lease payments. To fight inflation, the Central Bank has raised its key interest rate to as high as 20%. That means sawmills short of working capital have effectively lost access to credit, leaving them unable to restructure their debts. Companies cannot sell their output on the domestic market either, because the Russian government has begun sharply restricting and cutting the mortgage-subsidy programmes that had until now propped up domestic construction. Experts estimate the new credit policy will cut housing demand in Russia by a further 30–40%.
The current situation and “desperate measures”
The sector's financial losses in Russia have exceeded 15 billion roubles over the past three years, and almost half (45–48%) of logging and timber-processing companies are operating at a direct loss. Even this figure does not reflect the true scale of the crisis, since the sector's overall revenue declines, debts and forgone profit are estimated at many billions of euros. Regional giants such as Siberia's Tobol Timber and the Ilim Timber plant in Bratsk have been forced to halt production, freeze bank accounts and lay off staff en masse over tax debts and lost markets. Russian timber companies are now desperately calling on the government to introduce a three-year moratorium on bankruptcy filings, a tax holiday and a freeze on forest-lease payments, but with the budget in deficit Moscow is dragging its feet on providing help, meaning the sawmills' slow agony and the wave of bankruptcies will continue.
Belarus sharply increases exports
Over the past year, Belarusians have increased the value of their timber trade with China by almost a third. State Forestry Minister Alexander Kulik confirms that buyers in China purchase nearly half of the sawn timber exported from the sanctioned country.
In June this year, Belarusian sawmills sold 25% more sawn timber to China than a year earlier, shipping 83,300 cubic metres of product worth 16.8 million US dollars. The trade value rose by 33%, with the average price reaching 202 US dollars per cubic metre. According to customs trade data on Belarusian sawn-timber exports, in a market where competing Russian suppliers are selling almost a third less, prices in June were 6.4% higher than a year earlier.
“China is the main importer,” A. Kulik confirmed during a visit to a Pinsk forestry enterprise in May, noting that the Chinese buy 400,000–500,000 cubic metres out of the 1 million cubic metres of sawn timber Belarus exports each year. In 2026 Belarusian companies chose Chinese manufacturers for ten new sawmill lines – the first two have already been bought for testing in Pinsk, and the minister praised the equipment for consuming less energy and offering higher efficiency.
No trade flow, however, moves in a straight line: in the same monthly data series, Belarusian export volumes had fallen by 28% in May, before rebounding sharply again in June.
Beijing's dominance began with the embargo imposed by Europe. In mid-2022 Brussels closed the European market to Belarusian timber, cutting off customers who had once taken 56% of the country's sawn-timber exports. By August 2023 China's share had grown from 37% to 52%, while monthly volumes recovered from 60,000 cubic metres before sanctions to an all-time high of 77,000 cubic metres. Belarusians have redirected their timber elsewhere too, selling more than 365,000 cubic metres in a single quarter of 2024 to fifteen countries deemed “fraternal” by the Lukashenko regime, and shipping nearly 85,000 cubic metres to Iran under a “food for timber” barter arrangement.
“This is a measure of our companies' competitiveness,” Belarus's ambassador to China, Alexander Chervyakov, said in Beijing last month, noting that bilateral trade has already reached 3.7 billion US dollars this year, up 17%, with Belarusian exports up 27%. The state-run Belarusian Universal Commodity Exchange, which has opened an office in Shanghai, shipped goods worth 129.3 million US dollars to China in 2024. Softwood sawn timber was the largest commodity category, with timber accounting for 83% of the exchange's traded exports in 2025.
Regulators regard timber processed in China as the weak point of the sanctions regime. Brussels has turned its attention to birch plywood of Russian or Belarusian origin. Since November 2025, Chinese hardwood plywood has faced an 86.8% customs duty in the European Union. Four years after Brussels closed Europe to Belarusian timber, Belarus processes 4 million cubic metres of commercial timber a year, and China buys nearly half of the sawn timber volume exported from Belarus.
Belarus–China cooperation since 2022
Since mid-2022, when the European Union imposed harsh sanctions on Belarus and fully closed its market to Belarusian timber imports, Minsk has carried out a radical reorientation of its trade flows towards Asia, where China has become its main economic lifeline.
Before sanctions were imposed, European countries took around 56% of Belarus's sawn-timber exports. After the embargo began, China's share of Belarusian exports rose sharply, from 37% before sanctions to 52% in August 2023. China now steadily buys around half of Belarus's sawn-timber exports. Total bilateral trade reached 3.7 billion US dollars in 2026, with Belarusian exports to China up 27%. In June 2026 alone, exports showed a 24.9% rise in volume and a 32.9% rise in value compared with the previous year.
The Belarusian Universal Commodity Exchange (BUCE) has expanded its activity in China, opening a branch in Shanghai. In 2024, goods worth 129.3 million US dollars were sold to China through the exchange, with softwood timber the leading category. In 2025 timber accounted for as much as 83% of all export volume traded on the exchange. Cooperation is no longer limited to selling raw materials. In 2026 Belarusian state forestry companies signed contracts to buy new sawmill production lines from China in order to modernise domestic industry with more energy-efficient equipment. Since direct Belarusian and Russian timber exports to Europe are blocked, EU regulators have found that China is being used as an intermediary: Belarusian and Russian timber is brought into China, processed there (into plywood, for example) and then re-exported to Europe.
Since 2022 Belarus has successfully absorbed the shock of European sanctions by fully integrating itself into the Chinese market. What began as simple resource sales has grown into a strategic partnership, in which Minsk has become entirely dependent on Chinese buyers as well as on Chinese industrial technology.