Beijing has avoided condemning the Russian invasion of Ukraine, is against sanctions against Moscow and deplores the sending of Western weapons to Ukrainian troops.
China imported 72.9 billion dollars worth of resources from Russia between January and August this year, an increase of 50% over the same period in 2021, the Russian newspaper ‘Kommersant’ reported on Wednesday, citing data from the Customs Statistics Office. from China. However, exports from the Asian country to the Russian neighbor, mainly capital goods, grew by only 8.5%, to 44.2 billion dollars.
As a result, Russia’s trade surplus with China quadrupled during 2022, mainly due to the increase in the supply of Russian raw materials, especially gas and oil. Such a trend is part of Moscow’s new strategy of “turning east” in the face of the deterioration of its relations with the West due to the sanctions imposed as a result of the invasion of Ukraine.
Chinese customs data shows that the volume of trade with Russia is not mutual. In his speech at the Eastern Economic Forum, in the Russian city of Vladivostok, the Chinese representative, the head of the Legislature, Li Zhanshu, said on Wednesday that an acceleration of deliveries to Russia of Chinese equipment, necessary for Moscow to in order to replace them with those that the United States and Europe are stopping supplying because of the sanctions.
In August, Russia’s trade with China accelerated. Russian exports to the Asian country grew by 59% year-on-year (after 49% in July). Deliveries from China to Russia rose 26.5% after reaching 22% in July. In general, during the last eight months, Russian exports to China grew by 50% while those in the opposite direction increased by 8.5%.
In this way, the surplus in Russia’s trade with China, according to ‘Kommersant’, amounted to 28.7 billion dollars, quadrupling during the year, since until January it was 7.3 billion dollars. At the same time, the share of exports from Russia in total Chinese imports since the beginning of the year increased to 4% (2.9% in 2021) and the share of deliveries to Russia in total Chinese exports decreased to 1.9% (2% in 2021). In other words, for Russia, the importance of China as a trading partner is only increasing.
Increase
If, in 2002, 5% of China’s imports came from Russia, in 2021 they reached 25%. In the ‘Roscongress’ fund’s report, released during this week’s Eastern Economic Forum, it is ensured that “the planned increase in the share of both imports and exports in light of the current large-scale restructuring of the Russia’s foreign trade offers every argument to predict a further expansion of China’s presence.” According to Russian President Vladimir Putin at Wednesday’s plenary session, trade with China could reach the $200 billion threshold as early as 2022.
However, the structure of Russia’s exports to China is one of the least diversified compared to Russia’s other trading partners, says ‘Roscongress’, stressing that oil, its derivatives, gas, coal and lignite, they represent 68% of the value of the volume of supplies and 78% in quantitative terms. Also taking into account that “the physical flow of raw materials from Russian energy suppliers to China is stable and expanding.” On the other hand, significant Russian items for China are low value-added products. According to data from 2021, it is about frozen fish, 29.6% of all imports from China, fertilizers (28%) and wood (16.7%). Russian oil accounted for 16% of purchases by China, but now they are increasing.
‘Kommersant’ points out that “China is in no hurry to intensify its exports to the Russian Federation.” “It is not uncommon for Chinese banks to be extremely cautious with their Russian clients” for fear of being caught helping Moscow circumvent sanctions and being subjected to sanctions themselves, Alexei Dajnovski, Russia’s trade representative in Russia, explained on Wednesday in Vladivostok. Beijing.
“However, understanding the origins of this way of proceeding, we are convinced that both Russia and China must do the corresponding work (…) towards the creation of a cross-border payment mechanism beyond the reach of hostile sanctions,” Dajnovski said. before those attending the Vladivostok forum.
Li Zhanshu, ‘number three’ in the hierarchy of the State of his country and head of the Communist Party of China with the highest rank to travel to Russia since the beginning of the military intervention in Ukraine, on February 24, spoke in his speech to those attending the Eastern Economic Forum of the need to develop regional cooperation in the Far East “eliminating trade barriers and ensuring the safe and smooth operation of value chains”. In his words, “we must create a more sustainable, safe and open environment for investment and trade, and thus revitalize economic globalization.” The senior Chinese official called for “adhering to the concept of common, comprehensive, joint and sustainable security, in order to abandon the game with zero sums and the Cold War mentality.”
Beijing has avoided condemning the Russian invasion of Ukraine, is against sanctions against Moscow and deplores the sending of Western weapons to Ukrainian troops. Putin and his Chinese counterpart Xi Jinping met in Beijing in early February, before the opening ceremony of the Winter Olympics, and will meet again in the middle of this month in Samarkand (Uzbekistan).
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