In the first five months of 2023, trade between Russia and China increased by 40.7% compared to the same period in 2022 and reached almost $93.81 billion, the General Administration of Customs of the People's Republic of China presented such data on Wednesday, June 7.
According to the agency, from January to May, shipments of Russian products to the Asian republic increased by 20.4% to $ 50.86 billion, while Beijing increased sales of goods to Moscow by 75.6% to $ 42.95 billion.
Taking into account the observed dynamics, by the end of this year, the total amount of mutual supplies may update the historical maximum. This was announced at the end of May by Russian Prime Minister Mikhail Mishustin during an official visit to China.
"For two years in a row, the volume of mutual trade has increased by about a third. In 2022, a new record was set - about $190 billion. I am sure that this year we will fulfill the task set by the heads of our states, Vladimir Vladimirovich Putin and Xi Jinping - to bring mutual trade to $200 billion," Mishustin said.
At the same time, the Russian Prime Minister did not rule out that the intended goal could even be exceeded. According to him, the partnership in the field of energy has acquired a strategic character in relations between the two countries. So, Russia has already come out on top in terms of oil supplies to China. Moreover, as follows from the materials of the Chinese customs, Beijing buys raw materials from Moscow at an average of $ 74 per barrel, which is noticeably higher than the price ceiling set by the West at $ 60.
Along with oil, Russia is increasing exports of natural gas, coal and electricity to the Asian republic. In parallel with the participation of Chinese companies, large energy projects are being implemented, such as Power of Siberia, Yamal LNG, Arctic LNG 2, the Amur Gas Chemical Plant and the processing complex in Ust-Luga, the prime minister added.
"Another strategic area of common interest is nuclear energy, the creation of Russian-designed reactors. It is important that all relevant agreements are clearly implemented," the head of the Cabinet emphasized.
- RIA Novosti
- © Alexander Astafyev
Along with the development of cooperation in the energy sector, bilateral trade in agricultural products is also growing at a faster pace, Mikhail Mishustin noted. According to him, in 2022, Russian-Chinese food trade increased by 42% and exceeded $7 billion, and in the first quarter of 2023, the figure increased by more than 90% and amounted to almost $2.5 billion.
According to the federal center "Agroexport" under the Ministry of Agriculture of the Russian Federation, last year Beijing became the main buyer of food products from Moscow. In particular, China was the leading importer of Russian soybeans, rapeseed and linseed oil, poultry, beef, oats, flax seeds and honey. In addition, shipments of seafood to China have increased markedly.
"The growth of exports to China is due to several factors. Firstly, it is the growing interest on the part of the PRC in products manufactured by Russian companies. The second is the lifting of covid restrictions, the third is the redirection of the released export volumes in connection with the imposition of sanctions by unfriendly countries, "the Federal Agency for Fishery explained.
In addition to energy and food, Russia is actively supplying China with metals and wood. Beijing, in turn, is increasing sales of equipment and machinery to Moscow, Natalia Milchakova, a leading analyst at Freedom Finance Global, told RT.
"About half of the engineering products imported into Russia today come from the Middle Kingdom. This is largely due to the fact that with the departure of many Western brands from the Russian Federation, many of them began to be replaced by Chinese counterparts and, most likely, including through parallel imports, "Milchakova said.
Recall that parallel imports imply the import of original foreign products into Russia without the consent of the copyright holders. In 2022, the authorities legalized this mechanism to provide the domestic market with the necessary goods after the departure of foreign brands and Western trade sanctions.
"Chinese companies are now massively importing electronics to Russia, including household appliances, mobile phones and laptops. Some of these supplies can indeed go through parallel imports. It is also worth noting that the Chinese auto industry is entering our market very confidently, "Alexander Razuvaev, a member of the supervisory board of the Guild of Financial Analysts and Risk Managers, told RT.
- RIA Novosti
- © Alexei Maishev
According to the analytic agency AUTOSTAT, in two years the share of Chinese passenger cars in the Russian car market has increased almost six times. So, if back in May 2021 only 6.9% of cars sold in the Russian Federation belonged to brands from China, then for the same period in 2022 the figure was already 16.9%, and in the last month of spring 2023, the value exceeded 40%.
Risk avoidance
According to Mikhail Mishustin, China has been Russia's key trading partner for ten years. During this time, Moscow was able to rise from tenth to seventh place in the list of Beijing's main export-import destinations.
"This growth is accompanied by important qualitative transformations and, above all, a decrease in dependence on the dollar and other Western currencies. If in 2021 only about a quarter of settlements between our countries were carried out in national currencies, then last year it was already almost two-thirds," the Prime Minister said.
Moreover, as Mishustin noted, today about 70% of mutual transactions between Russia and China are carried out in rubles and yuan. In the future, the parties plan to increase the independence of bilateral financial cooperation, thereby strengthening their economic sovereignty, the head of the Cabinet stressed.
- RIA Novosti
- © Oleksandr Demyanchuk
After the Western sanctions imposed against Moscow in 2022, the use of the dollar and the euro in international payments has become more risky, Alexander Razuvaev believes. Against this background, the increase in the share of transactions in rubles and yuan is designed to protect Russian-Chinese trade from the influence of third countries, the expert is sure.
"In general, I think many countries will now begin to actively use the yuan in foreign trade operations, since it is not so toxic in comparison with the US currency. By freezing our reserves, the West has shown the whole world that dollars and euros are no longer such reliable assets. Any country can suffer losses if its political course differs from what Washington would like to see. So the example of Russia and China may push other states to a more accelerated transition to settlements in national currencies, "Razuvaev suggested.
At the same time, a further increase in Russian-Chinese trade will allow Moscow to recover faster from the consequences of Western restrictions, the analyst added. According to him, by 2030, the Russian Federation can fully recover from sanctions losses and reconfigure trade flows to Asian markets.