Germany’s machinery manufacturers are increasingly feeling the pinch from Russia’s economic troubles and continue to lose market share to their Chinese competitors, as Moscow seeks closer strategic ties with Asia.

Plant and machinery exports to Russia fell 28% in the first quarter from a year earlier, as companies struggled to secure trade financing amid strained relations between Russia and the West, German industry association VDMA said Monday.

“The downtrend in engineering exports accelerated at the start of the year and it’s quite conceivable that engineering exports to Russia could drop by 30% this year,” said Ulrich Ackermann, VDMA’s head of foreign trade.

The Russian economy has been hit hard by Western sanctions over the conflict in Ukraine and a rapid drop in oil prices, the country’s key export.

The Russian Economy Ministry said on Monday that gross domestic product contracted by 4.2% in April, compared with a year earlier, after shrinking by 2.7% in March. In the first four months of the year, the economy contracted by 2.4%, said the ministry.

The data showed that a drop in foreign trade also put pressure on the economy.

The World Bank said it sees the Russian economy shrinking 2.7% this year before growing 0.7% next year and 2.5% in 2017.

China meanwhile is increasingly capitalizing from Russia’s disengagement from the West. Mr. Ackermann said that “it’s only a matter of time until China will replace Germany as the most important supplier of machinery and equipment to Russian industry.”

Researchers at Oxford Economics see a 60% chance of economic sanctions on Russia remaining in place throughout 2016.

“In spite of the cease-fire, we believe fighting in eastern Ukraine will continue to flare up on a regular basis, following the existing pattern of waves of escalations and cease-fires,” they said.

Total German exports to Russia declined 18% last year to €29 billion ($31.64 billion) and imports dropped 7% to €38 billion, according to the federal statistics office.

Weakening trade with Russian is further undermining industrial production in Europe’s largest economy, which is already struggling to maintain momentum amid weak corporate investment and unsteady global demand.

“Germany’s manufacturing upturn appears to be losing its legs again,” said Oliver Kolodseike, economist at Markit, following the publication of a weaker-than-expectedGerman purchasing managers’ survey Monday.

Germany’s manufacturing PMI index fell to 51.1 in May from 52.1 in April, signaling softer growth. Index readings above 50 imply expansion.

Total orders for Germany’s plant and machinery industry, including tickets from Russia, fell 2% in April from a year earlier, VDMA said.

Domestic orders declined 3%, but there was an opposing trend in demand from inside and outside the eurozone.

Eurozone orders jumped 14% from April last year, but this wasn’t enough to compensate for a 7% drop in orders from outside the region.