1. Introduction

These two powers, closely linked by geopolitical interests and developing trade relations, present vastly different economic landscapes, driven by both domestic circumstances and global challenges. We will examine their growth rates, structural features, monetary challenges, living standards, foreign trade activities, and key prospects.

Let’s start with the growth rate of gross domestic product, a metric that often serves as a barometer of the overall health of an economy. According to the National Bureau of Statistics of China [1], China’s GDP growth rate in 2025 was projected to reach 5%, an impressive result against a backdrop of a slowing global economy and domestic challenges. This allowed the country to reach a GDP of approximately 140.18 billion yuan (or approximately $20.084 trillion) and remain within the government’s growth targets, which shifted from «high speed» to «high quality» growth. Strong industrial production and robust exports remained the main drivers, while domestic consumption, while recovering, did so at a moderate pace, not fully offsetting structural imbalances.

The Russian economy, according to Rosstat’s initial estimate [2, p. 5], demonstrated significantly more modest growth – just 1% in real terms, reaching a nominal volume of 213.5 trillion rubles. According to Rosstat’s revised data for the first half of 2025, Russia’s GDP growth was 1.2% [4]. This slowdown was multifactorial: it was linked to the Central Bank’s targeted policy of reducing inflation through high interest rates, the exhaustion of previous growth drivers, continued massive sanctions pressure limiting access to technology and markets, and the decline in oil and gas revenues amid volatile global prices and changes in export logistics.

Moving on to the structure of the economies, we see further divergence. The Chinese economy remains heavily dependent on industry, which in 2025 showed growth of 5.2% year-on-year [1]. Particularly noteworthy is the rapid development of strategic and high-tech sectors: equipment production increased by 10.2%, and high-tech manufacturing by 9.5% [1]. This demonstrates the ongoing transformation of Chinese industry toward innovation and added value, moving away from pure mass production. The service sector also demonstrated robust growth of 5.5% in the first half of the year, supported by urbanization and a growing middle class [1].

However, one of the most pressing structural problems remains the crisis in the real estate sector: investment in real estate fell by a catastrophic 17.2% year-on-year [1], indicating deepening problems with developers, the growing debt burden of local governments, and the potential impact on financial stability and household well-being.

In Russia, in 2025, the greatest growth was demonstrated by sectors related to domestic consumption and import substitution: hotels and catering (+8.9%), manufacturing (+3.9%) – likely due to government orders and the replacement of departed foreign brands – as well as the financial and insurance sectors (+3.8%) [2, p. 8]. According to the World Bank, the share of industry in Russia’s GDP continues to grow in 2024-2025 [9]. Analysts at the Institute of Economic Strategies note that the growth of the manufacturing industry is largely due to government orders and import substitution policies [10]. A decline was observed in mineral extraction (-1.7%), reflecting difficulties with exports and pricing conditions, as well as in wholesale and retail trade (-1.1%) and real estate transactions (-1%) [2, p. 9].

It is important to note the record decline in the share of exports in GDP to 17.8% (an absolute minimum since 2011) and imports to 15.2%. At the same time, the share of gross fixed capital formation reached a historical high of 23.6% of GDP [2, p. 10]. This indicator indicates significant investment in fixed assets – infrastructure, equipment, and production – which could potentially become the basis for future growth and reduced dependence on external factors.

2. Materials and Methods

In terms of inflation and monetary policy, the countries are facing opposing challenges. China has been experiencing deflation for three consecutive years – the longest period since the country transitioned to a market economy in the late 1970s [1]. This phenomenon indicates a significant imbalance between productive capacity and insufficient domestic demand, which could lead to reduced corporate profits, delayed investment, and further restraint on consumer spending.

The Russian Federation, in contrast, is struggling with high inflation, which, according to the Central Bank of the Russian Federation [3, p. 3], slowed to 7.6% in 2025 (December compared to December 2024). To curb this, the Central Bank maintained an extremely high key rate, which, although it was reduced from 21% in 2024 to 20% by June 2025, remained at a level that significantly limited the availability of credit for businesses and households, thereby slowing economic activity. IMF forecasts for 2025-2026 also confirm the divergent monetary policies of the two countries: China continues to stimulate the economy, while Russia is tightening lending conditions [7].

Standards of living and incomes also have their own characteristics. In China, the average salary in cities in 2024 was approximately 10,000-12,000 yuan (approximately 117,200-140,640 rubles) before taxes, while in megacities such as Beijing and Shanghai, these figures were even higher – 15,000-20,000 yuan [1]. The unemployment rate in cities in December 2025 was 5.1% [1]. It is noteworthy that purchasing power in China is generally higher than in Russia: after paying basic expenses, the population has more money left over for savings, education, and leisure, which is due to both the lower cost of some basic goods and services and the high competition in the domestic market. In Russia, the average salary in 2025 was approximately 100,000 rubles, while the unemployment rate was estimated at a historically low 2.5%, which may indicate a labor shortage in some industries [2, p. 12]. According to the Rosstat report «Socio-Economic Situation in Russia» for 2025, real disposable income of the population increased by 2.3%, but purchasing power remains limited due to high inflation [3]. International comparisons by the World Bank also document a gap in the standard of living between Chinese megacities and Russian cities with a population of over one million [8]. However, despite low unemployment, after paying basic expenses, Russians, even in large cities, have less disposable income than residents of Chinese megacities. This is explained by higher inflation, the specifics of consumer baskets, and, possibly, the need to replace previously affordable imported goods with more expensive analogues. In terms of foreign economic activity, China continues to demonstrate impressive success: exports and imports grew by 7.3% year-on-year in the first half of 2025, and the trade surplus reached a record $1.2 trillion [1]. This demonstrates China’s continued role as the «factory of the world» and its ability to adapt to changing global trading conditions.

Russian trade turnover with China, while still significant, was expected to reach $215-225 billion in 2025, down from 2024 levels (almost $245 billion) [4, p. 7]. This decline is explained by the decline in global energy prices, which comprise a significant portion of Russian exports, ongoing sanctions pressure complicating logistics and payments, and general volatility in commodity markets.

3. Results and Discussion

Finally, let us turn to the main challenges and prospects. China faces systemic problems: the imbalance between high domestic supply and low demand is leading to deflationary pressure and the need to find new markets. A protracted housing crisis, with real estate investment declining by 17.2% year-on-year, poses risks to the entire financial system. And perhaps the most fundamental challenge is demographic decline: the number of newborns in 2025 has fallen to a record low of less than 8 million [1]. This will inevitably lead to an aging population, a shrinking workforce, reduced consumer demand, and create colossal pressure on the pension and social systems in the long term.

For Russia, the key challenges are the risk of a recession in 2026, which is being actively discussed at the high level [12], and a record budget deficit in 2025 – up to 6 trillion rubles, or about 2.6% of GDP, due to high government spending and insufficient revenues [2, p. 15]. According to the Russian Ministry of Finance, as of September 2025, the federal budget deficit amounted to 4.19 trillion rubles [6]. Additional tension is created by the announced increase in the base VAT rate from 20% to 22% from January 1, 2026, which is enshrined in Federal Law No. 152-FZ of June 24, 2025 [13]. This decision, aimed at replenishing the budget, may lead to further price increases, increased inflationary pressure and, as a result, a decrease in the purchasing power of the population, as well as the possible closure of some small and medium-sized businesses unable to adapt to the increased tax burden. Analysts Frenkel, Tikhomirov and Surkov note in their study that the VAT increase could lead to the closure of up to 15% of small and medium-sized enterprises in the most vulnerable sectors [11]. The year 2025 has clearly demonstrated two significantly different economic trajectories.

Table 1

Comparison of the economies of Russia and China: key indicators

Both countries are at turning points. Their ability to adapt to new realities will determine their future.

In conclusion, 2025 has clearly demonstrated two significantly different economic trajectories. China, although maintaining high growth rates, faces the need for a radical overhaul of its economic model to overcome structural imbalances and demographic challenges. Russia, under pressure from external and internal factors, is showing modest growth and attempting to reorient its economy toward domestic investment and production, but faces macroeconomic instability and fiscal challenges that could worsen in the near term. Both countries are at turning points in their development, and their ability to adapt to new realities will determine their future.