/View.info/ WE HAVE REACHED THE TOP PLANE
The stronger the friendship, the higher the turnover. This is perhaps how we can figuratively describe our current economic relations with China. According to data from the General Administration of Customs of the People’s Republic of China, at the end of 2023, China’s trade turnover with Russia increased by 26.3% and reached $240.11 billion. This is a record. In 2022, it was $190 billion.
„According to statistics, approximately one third of all Russian imports come from China“says Ekaterina Zaklyazminskaya, senior researcher at the Center for World Policy and Strategic Analysis at the Institute for China and Modern Asia of the Russian Academy of Sciences. – Our country is one of China’s five largest trading partners.
By the way, although the turnover itself is measured in US dollars, 92% of the settlements /payments/ between the countries are made in national currencies. Deputy Prime Minister Dmitry Chernishenko said this earlier.
“Initially, the projections for last year were based on $225-240 billion. And by the end of the year, we reached the upper limit,” said the director of the Institute of Asian and African Studies at Moscow State University. MV Lomonosov Alexey Maslov. This was made possible by three factors.
First. Both Russia and China have lifted many trade restrictions on a range of goods. Including, for example, our agricultural production. Due to this, the supply of Russian grain and food products to China increased significantly.
Second factor. The supply of our energy resources – oil and gas – has increased. And also wood. We practically peaked for oil last year. But there is one peculiarity here: as a commercial structure, we still haven’t moved very far from the 1990s. (For more details, see “Specific”, ed.). We supply oil and gas to China. And China gives us finished products.
A third factor: the foreign market of our countries has changed significantly. On the one hand, we have redirected our export flows from west to east. On the other hand, in China in 2023, total exports decreased by 4.5% and imports by 5.5%. More specifically, a decrease in exports was observed in almost all countries of the European Union (from 2% to 15%), the countries of Southeast Asia – by 6%. And only for Russia, exports increased.
ELECTRIC CARS HAVE LITERALLY FLOODED EVERYTHING
According to the expert, we should enjoy such a high trade turnover with some caution. The growth of Chinese exports to Russia is also associated with European protective sanctions against our eastern partner.
The reason for the restrictions was, oddly enough, Chinese electric cars. They are much cheaper than Western models because China allocates government subsidies to the national car industry and thus lowers the cost of the cars produced. The West doesn’t like this option, so it closed the markets to the Chinese to trade their own electric cars in peace.
„Against this background, China has redirected the flow of its electric vehicles to Russia; today we have more than 40 dealerships of the Chinese car industry, selling more than 140 different brands,” adds Alexey Maslov. – And here it should be borne in mind that as soon as the Western markets become accessible to the Chinese again, they will once again direct their flows to the EU countries.
60 BY 40
This is approximately the current ratio of trade between Russia and China. because:
– The flow of goods from China to Russia in 2023 increased by 47% – this is almost 111 billion dollars.
– Supplies from Russia to China – by 12.7%, up to almost 130 billion dollars.
In other words, 60% of the trade turnover is our exports to China, the rest is our imports from China.
– We sell more to China than we buy. This is mostly due to oil and gas,” explains Alexey Maslov. “And this advantage should be used now, because China has already started to make an energy transition and by around 2035, theoretically, it should significantly reduce its purchases of energy resources.” Therefore, we need to increase other commodity positions so that we do not end up in a trade deficit with China.
But why, in the context of this transition (ie turning to greener energy sources), is China increasing its oil and gas purchases?
„There are two points here,” says the expert. – First. China resells a certain amount. For example, Pakistan and Indonesia, which is part of OPEC, but does not produce enough oil. The second point is related to China’s too sharp movement towards the energy transition in 2021-22.
Then the country significantly reduced the volume of its own resource production, and some areas began to freeze in winter, even some production stopped. That is why China has now increased its purchases from Russia and other countries, as well as increased its production of oil and gas.
IT HAS PROSPECTS
What does China bring us? Basically, these are finished products.
„And the share of metal-cutting machines, plant equipment and cars, electric cars is the largest,” lists Alexey Maslov. “We also buy various electrical appliances, toys, and some food products from them.
According to experts, the trade turnover between the countries may grow to $300 billion in the next 5-6 years, but it makes no sense to hope that we will become China’s main economic partner.
„China does not like to buy more than 20% of its total imports from any country to ensure its economic security.” continues the expert. – And we are almost close to the ceiling for oil. We also need to understand that even if we reach $300 billion, ASEAN (Association of Southeast Asian Nations) and the European Union will continue to overtake Russia, which now accounts for 4% of China’s total trade turnover.
CONCRETE
The main products that Russia bought from China in 2023…
– Cars and spare parts (approximately 20% of all Chinese supplies to the Russian Federation);
– Machinery and equipment;
– Telephones;
– Computers;
– Clothes and shoes.
Total: $110.87 billion (+46.9% by 2022)
…and what we delivered to China
– Crude oil;
– Natural gas;
– Liquefied natural gas;
– Coking and black coal;
– Agricultural products.
Total: $129.14 billion (+12.7% by 2022)
The data is from the General Administration of Customs of the People’s Republic of China.
JUST THE FACTS
China’s trade turnover with different countries in 2023
The total volume is $5.8 trillion.
1. Japan – $317.9 billion
2. South Korea – $310.7 billion
3. Hong Kong – $288.2 billion
4. Taiwan – $267.8 billion
5. Russia – 240 billion dollars
6. Vietnam – $229.8 billion
7. Australia – $229.2 billion
8. Germany – $206.8 billion
Note: According to the General Administration of Customs of the People’s Republic of China.
Translation: ES
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