From January to November 2023, the volume of trade between Russia and China increased by 26.7% compared to the same period in 2022 and reached a record $218.18 billion, the General Administration of Customs of the People's Republic of China presented such data on Thursday, December 6.

According to the agency, over the past 11 months, shipments of Russian products to the Asian republic increased by 11.8% in annual terms - up to $117.84 billion. Beijing, meanwhile, increased sales of goods in Moscow by 50.2% - up to $100.34 billion.

As Russian President Vladimir Putin noted earlier, the recent trade indicators are "really impressive" because they are growing much faster than expected. Initially, Moscow and Beijing planned to reach a mutual trade turnover of $200 billion only in 2024.

"When we formulated this in 2019, I will tell you frankly, few people believed that it was possible at all, because at that time our trade turnover was $100 billion, and now, ahead of schedule, it is already $200 billion," Putin said during a visit to the Asian republic in the fall.

China has been Russia's key trading partner for a decade. At the same time, in less than a year, Moscow was able to rise from tenth to sixth place in the list of Beijing's main export-import destinations.

"And if we keep in mind that any country always has a larger trade turnover with neighboring countries (I mean South Korea and Japan), then among non-regional countries, we, in fact, occupy the second place in trade with China, after the United States, overtaking Germany in this indicator," Putin added.

  • AP
  • © Sergei Guneyev, Sputnik, Kremlin Pool

At the end of October, the Federal Customs Service of the Russian Federation predicted an increase in Russian-Chinese trade to $220 billion by the end of 2023. However, taking into account the latest trends, the real value may be much higher, said Vladimir Chernov, an analyst at Freedom Finance Global.

"We believe that the total volume of trade may amount to $230-240 billion. The increase in the growth rate of trade in November and December is due to the lifting of the ban on pork exports from Russia, which has been in effect since 2008, and the signing of the largest long-term contract for the supply of grain from the Russian Federation," the source explained.

According to him, along with agricultural products, Moscow today ships metals, timber and seafood to Beijing in large volumes. However, the main item of Russian exports to the Asian republic is still energy resources, Chernov noted.

According to the latest estimates of Chinese customs, from January to October 2023, 73% of all supplies from the Russian Federation to China accounted for hydrocarbons. In particular, according to the results of ten months, Russia became the largest supplier of crude oil to China, having shipped 88.5 million tons of raw materials for $49.3 billion and ahead of Saudi Arabia (73.4 million tons for $45.6 billion). Moreover, Moscow now sells energy resources to Beijing at an average of $76.4 per barrel, which is noticeably higher than the price ceiling of $60 set by the West.

In addition, from January to October, Russia sent 6.9 million tons of LNG to China for $4.39 billion and came in third place in the ranking of the main sellers, second only to Australia (19.1 million tons for $11.3 billion) and Qatar (13.3 million tons for $8.2 billion). At the same time, Moscow received about $5.4 billion from Beijing for pumping pipeline gas, while only Turkmenistan earned more ($8.1 billion).

China, in turn, has managed to significantly increase its presence in the Russian car market. For example, if at the beginning of 2022 the share of Chinese models among new cars sold in the Russian Federation did not exceed 10%, then by the end of November 2023, this figure came close to 60%. Such data is provided by the analytical agency "Autostat".

Moreover, today up to 92% of cars imported from abroad to Russia come from China. This was told in an interview with RT by the acting head of the Federal Customs Service of the Russian Federation Ruslan Davydov.

"In general, the Chinese auto industry has made a giant leap forward over the past two years. The country has reached a sustainable level of production, which makes it possible to accumulate profits for subsequent investments in new technologies. And we see how the quality of Chinese cars is improving literally before our eyes. At the same time, our consumers are getting used to it and are no longer afraid to buy Chinese," Davydov added.

Along with passenger cars, Russia is actively buying car parts, trucks and heavy equipment from China, Artyom Deev, head of the analytical department at AMarkets, said in an interview with RT. Also, according to him, various equipment, electronics, household appliances, clothing and a number of consumer goods are imported from China in large volumes.

  • Omoda cars in the Agat showroom in Volgograd. Cars from China accounted for 2023% of Russian car imports in the first eight months of 92
  • RIA Novosti
  • © Kirill Braga

In general, Moscow and Beijing do not intend to rest on their laurels and in the coming years can increase mutual trade by at least one and a half times. Deputy Minister of Economic Development Vladimir Ilyichev spoke about this in an interview with RT at the St. Petersburg International Economic Forum (SPIEF) in June.

"The new goal, which we believe is achievable in the foreseeable future, is about $300 billion. According to our estimates, this could happen by 2030. At least, we will definitely set such a goal in our plans," Ilyichev stressed.

Sanctions protection

According to Vladimir Chernov, it was partly the strengthening of trade cooperation with China that helped Russia cope with the consequences of sanctions more easily. So, in 2022, against the backdrop of unprecedented restrictions from the West, the Russian economy shrank by only 2.1%, although initially it was predicted to collapse by 10-25%. Moreover, it is expected that by the end of 2023, the country's GDP will be able to fully win back last year's losses and increase by more than 3%.

"With the help of China, we managed to redirect some of our export products from European markets to Asian ones. At the same time, at the expense of the PRC, we were able to partially replace the purchase of foreign products that fell under sanctions. That is, in general, the growth of trade with China allowed the Russian economy not to fall very deeply and to recover quickly," Chernov stressed.

Moreover, in order to minimize sanctions risks, Moscow and Beijing have almost completely switched to settlements in national currencies. According to the estimates of the Russian authorities, today about 95% of mutual transactions between the parties are carried out in rubles and yuan. For comparison, in 2022 this figure was 50%, in 2020 it was 24-25%, and in 2013-2014 it was only 2-3%.

  • © anilbolukbas

Recall that last year, as a result of restrictions by the United States and the European Union, almost half of Russia's gold and foreign exchange reserves (worth $300 billion) were frozen, and the country's banks were disconnected from the SWIFT platform and Visa and Mastercard payment systems. According to the head of the Ministry of Finance of the Russian Federation Anton Siluanov, by its actions, the West "cut off the branch" on which the entire system of international settlements was built. As a result, more and more countries are now beginning to abandon settlements in dollars and euros, as they want to avoid the possible blocking of their money.

"Confidence in such units of account as the dollar and the euro has been undermined because the countries that issue these currencies manipulate them, not only printing them in unlimited volumes, but also using them as leverage in foreign policy matters. Indeed, along with Russia and China, other countries are increasingly beginning to make payments either in national currencies or in the currencies of friendly states that they trust," Siluanov explained in an interview with RT on the sidelines of the SPIEF.

According to Russian businessman Oleg Deripaska, in the last year alone, the number of transactions in the world made in Chinese yuan has doubled. Such dynamics may indicate the "extraordinary success" of the US and EU sanctions policy, the entrepreneur jokingly noted.

"It seems that the volume of transactions paid in Chinese yuan will surpass the volume of transactions in euros in four years. And at this point, the sanctions can be considered a complete exercise," Deripaska wrote on his Telegram channel.