The European and American sanctions against Russia have led to an unexpected outcome. Facing the financial and other sector sanctions from Western powers, the Russian economy was bound to suffer a severe blow. However, current data proves that Russia has already crossed the most difficult period.

After the outbreak of geopolitical conflicts, the Russian economy encountered significant challenges in the short term, with the ruble exchange rate plummeting and economic growth slowing down. However, Russia successfully turned the tide by pegging the ruble to oil and gas resources, a "trump card." Since then, the ruble exchange rate has continued to appreciate, and the performance of the Russian economy has not been as poor as expected.

On the contrary, Europe, which participated in the sanctions, suffered a significant setback. Shortly after the conflict, the United States hastily announced an interest rate hike, which directly harvested its European allies. After the Federal Reserve announced the rate hike, a large amount of risk-avoiding funds in Europe quickly returned to the United States, leading to a significant appreciation of the US dollar and a sharp depreciation of the euro exchange rate.

It's not just the euro exchange rate that plummeted; Europe also faced an energy crisis due to the cessation of Russian energy supplies, resulting in a significant increase in energy prices and a substantial rise in inflation levels. The United States took this opportunity to export high-priced oil to Europe, once again shearing its allies. Europe could only watch helplessly as it was harvested, without any temper.

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On the contrary, Russia not only avoided economic recession but also saw its GDP return to the world's top ten in 2022, with GDP once again exceeding 2 trillion US dollars.

In the first quarter of 2023, Russia's GDP decreased by 1.8% year-on-year. Although the growth rate is still declining, it has significantly narrowed compared to the previous four quarters. This means that under various stimulus measures, the Russian economy is gradually emerging from the most difficult period. Russian media predict that the GDP growth rate this year will reach 1%-2%, gradually returning to positive growth.

Even German media lamented that sanctions cannot defeat Russia. Under various sanctions, Russia has emerged from the economic trough, while Europe is mired in an energy crisis and finds it difficult to extricate itself. There are mainly two reasons why Russia has been able to achieve such a level:

Firstly, Russia's own resource advantages are too strong. Even with joint sanctions from Europe and America, Russia's abundant oil and gas resources and grain production are enough to ensure basic economic independence. Not every country has such resource endowments, but Russia does.Russia is extremely rich in oil and natural gas resources, which are more than sufficient for self-sufficiency, and it can also continuously export these resources, including coal, timber, and more. The country has an abundance of usable resources, and more importantly, Russia is a major global exporter of grain. Its grain production meets domestic market demand, and there is no need to worry about being held hostage by grain supplies.

It now appears that Russia has been well-prepared, having sold off its US debt early on, and is not afraid of the US defaulting on its debts. At the same time, Russia has significantly increased its official gold reserves to enhance its risk resistance.

The second reason is the significant increase in Sino-Russian trade. Although Western powers have withdrawn their investments and presence in Russia, Chinese enterprises have encountered significant opportunities. China can provide all the consumer goods and industrial products that Russia needs, and Russia's oil and other resources can be exported to China on a large scale.

According to data, from January to May of this year, Sino-Russian trade volume increased by 40% year-on-year. Last year, the trade volume between China and Russia exceeded 190 billion US dollars, and it is almost certain that this year will break through the 200 billion US dollar mark.

Since the beginning of this year, China's car exports to Russia have quadrupled, and the market share of Chinese car brands in Russia has significantly increased. Domestic brands such as Great Wall, Geely, and Chery are highly favored. Chinese smartphones account for more than 50% of the Russian market and are still rapidly increasing. Additionally, Chinese home appliances and various consumer goods are very popular in Russia.

Russia exports oil and gas resources to China. Currently, Russia has surpassed Saudi Arabia to become China's largest oil supplier. It also exports coal, various minerals, timber, agricultural products, etc. Moreover, the price of oil exported from Russia to China is relatively lower.

As of now, 70% of Sino-Russian trade is settled in Renminbi and Rubles. China can provide all the goods that Europe can offer to Russia, and even those that Europe cannot. Sino-Russian trade cooperation is an important support for Russia's economy to overcome difficulties.