Home » World » Russian think tank survey: Nearly 70% of Russian companies choose “Made in China” to replace Western equipment, and the proportion is expected to be even higher in the future | Blog Post
Russian think tank survey: Nearly 70% of Russian companies choose “Made in China” to replace Western equipment, and the proportion is expected to be even higher in the future | Blog Post
According to a recent report on the website of the “Russian Business Consulting Daily” website, a recent survey by the Gaidar Economic Policy Institute shows that Russian companies now mainly use Chinese and local products to replace equipment and spare parts originally imported from “unfriendly countries”. Especially in the equipment market, nearly 70% of Russian companies chose Chinese suppliers last year. Some Russian experts predict that the market share of “Made in China” in the Russian industry will be even higher in the future.
Last year, nearly 70% of Russian companies chose Chinese suppliers to replace Western equipment.
According to the report, the investigation laboratory of the Gaidar Institute of Economic Policy issued a questionnaire to about 1,000 Russian companies in January this year to investigate the replacement of imported goods subject to secondary sanctions in equipment, spare parts and accessories. The results show that the share of Chinese suppliers in the first two replacement products exceeds that of Russian local suppliers, becoming the “most popular new channel”, while Russian products only have a slight advantage in accessories.
Specifically, 67% of Russian companies chose China as the country to replace Western equipment, accounting for the highest proportion, followed by 39% of Russian companies. Another 21% chose EEU partners other than Russia (Armenia, Belarus, Kazakhstan, Kyrgyzstan), 17% chose Turkey, and 12% chose India, Iran, Vietnam, Egypt and North Korea. In addition, 23% of Russian companies chose “third countries” other than the listed countries, and 15% continued to receive sanctioned equipment.
In the spare parts market, Chinese producers are also leading, with 63% of Russian companies seeking their supplies. 46% choose Russian local products, and the gap is slightly smaller than that in the field of equipment replacement. 24% of the companies surveyed switched to spare parts from other countries, and 22% chose to continue to receive sanctioned products.
In terms of accessories (including raw materials and semi-finished products), enterprises that choose Russian local products rank first with a proportion of 54%. Chinese products ranked second with a slight gap, accounting for 52%. 23% of Russian companies continue to receive sanctioned parts. The head of the investigative laboratory, Sergey Tsukhlo, said that the Russian company had shown “the highest independence” in terms of accessories for secondary sanctioned products. Previously, 20% of Russian companies had never used foreign imported accessories, while in terms of equipment and spare parts, this proportion was only 11%.
Russian car assembly workshop.
According to reports, Vladimir Salnikov (Vladimir Salnikov), deputy director general of the Russian Center for Macroeconomic Analysis and Short-Term Forecasting (CMACP), believes that although similar products in Russia are not the main replacement channel for imported equipment and spare parts, they are The findings are still arguably positive. “These surveys show that import substitution is working,” he said.
Salnikov said that the share of indigenous equipment in Russian industry has always been very small. Taking the field of machinery and equipment production as an example, as of 2021, five-sixths of the equipment of Russian enterprises will be imported from abroad, and domestic equipment will only account for one-sixth.
According to him, the market share of Chinese and Russian local products in the aforementioned data may still be on the high side, because it is often difficult to determine the true country of origin of equipment or components in such surveys. Chief accountants in companies often fill out these types of questionnaires, but they don’t always know exactly whose equipment they’re buying, he explained.
“The chief accountant can see who the money went to, but it may have been a Russian distributor of spare parts made in China. I think this factor may have affected the outcome of the investigation.” Salnikov also expects that the future of products from Chinese suppliers accounted for or more in Russian industry.
It is reported that China’s exports to Russia will increase by 12.8% in 2022, reaching US$76.1 billion. Last year, China increased its supplies of Russian trucks, excavators and loaders, rubber tires, pumps and compressors, cranes, gate valves, valves and gas valves.
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