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Russia facing significant problems in railway trade with China, due to war in Ukraine - Bloomberg

Russia facing significant problems in railway trade with China, due to war in Ukraine - Bloomberg Illustrative photo: Russia faces significant challenges in railway trade with China (Getty Images)

The Russian Federation is facing difficulties in delivering goods to China via its eastern railway network. This indicates growing economic challenges caused by Russia's war in Ukraine, Bloomberg reports.

As reported by the media outlet, Russian Railways JSC approved a 30% reduction in its investment program for 2025 last week due to rapidly rising borrowing costs.

"The increase in war-related cargo also exacerbates existing bottlenecks, while sanctions impact cross-border payments. These factors, combined with longstanding logistical challenges, are slowing the transportation of goods like coal and aluminum," Bloomberg notes.

Meanwhile, Moscow-based MMI Research stated that this year, Russian Railways is experiencing "its deepest slump since the 2008-09 crisis this year, and the trend is still going strong."

Bloomberg emphasized that this situation highlights internal tensions within Russia.

Earlier, we reported that Russian railways have seen a decline in freight traffic for the third consecutive year, likely due to sanctions against Russia.