Investments from China’s new Belt and Road Initiative in Russia fell to zero for the first time, signaling Beijing’s reluctance to face sanctions following the war in Ukraine.

Contrary to past multibillion-dollar promises and contracts, Beijing did not strike any new deals with Russian entities under the Belt and Road program in the first half of 2022, according to new data.

The findings were part of a report by Shanghai Fudan University’s Green Finance & Development Center reviewed by the Financial Times. While slowing investment in Russia, China has deepened its engagement with the Middle East, according to the report.

Christoph Nedopil Wang, director of the Green Finance & Development Center, said the threat of Western sanctions could have deterred China from investing in Russia.

But he said the fall may be “only temporary” and that there is “definitely strong engagement between Russia and China”. He added that Chinese purchases of Russian energy exports had increased despite the war.

Russia has for years been a major beneficiary of Chinese development spending under the Belt and Road program, President Xi Jinping’s flagship foreign policy.

China’s official loan commitments to Russia from 2000 to 2017 totaled $125.4 billion, according to AidData, an international research lab at the College of William & Mary in Virginia. This includes $58 billion from China Development Bank and $15 billion from China Eximbank, China’s two big political banks.

China still depends on Russian supplies for about 15% of its oil and 8% of its gas. New energy deals expanding those arrangements were struck in early February, days before Russian troops were ordered to invade.

Since the February invasion, Beijing has criticized international sanctions against Russia, although many of its companies are careful not to violate them.

Data from Fudan University showed that Saudi Arabia has now emerged as one of the biggest beneficiaries of the Belt and Road Initiative, as China strengthens its ties with Middle Eastern states. East thanks to massive agreements in the field of energy and construction.

Beijing signed $5.5 billion in new deals in Saudi Arabia in the first half of the year – more than any other country – as Chinese investment abroad largely plateaued. In 2021, Iraq was the biggest beneficiary of the BRI with $10.5 billion in new construction contracts.

“It’s significant and it shows…a focus on resource transactions,” Nedopil Wang said.

The strengthening of China’s position in the Middle East comes after the United States officially ended its combat mission in Iraq and withdrew from Afghanistan. US President Joe Biden visited Riyadh this month, vowing “not to go away and leave a vacuum to be filled by China, Russia or Iran.”

Fudan University’s report reflects the changing role and shrinking footprint of the BRI, once touted by Beijing as the “project of the century”.

In the first half of 2022, there was a total of $28.4 billion in Chinese investment and contractual cooperation in the 147 BRI countries, compared to $29.6 billion in the same period a year ago.

The longer-term decline in BRI engagement comes amid growing scrutiny of how project loans are exacerbating financial pressures on vulnerable governments. In the most recent example used by critics, BIS beneficiary Sri Lanka defaulted on its sovereign debt in May.

While researchers do not expect China’s BRI engagement to return to past highs, the data suggests the focus is on deals to secure access to strategic resources, including minerals used in the clean technology supply chain as well as oil and gas across the Middle East, Africa and Latin America.

“The Belt and Road Initiative remains highly relevant,” said Nedopil Wang.