In 2023, trade between Russia and China increased by 26.3% compared to 2022 and reached $240.11 billion, the highest level in the history of economic relations between the two countries. This was announced on Friday, January 12, by the General Administration of Customs of the People's Republic of China.
According to the agency, from January to December, shipments of Russian products to the Asian republic increased by 12.7% in annual terms - up to $129.14 billion. Beijing, meanwhile, increased sales of goods to Moscow by 46.9% - up to $110.97 billion.
It is noteworthy that back in 2019, the Russian-Chinese trade turnover was only about $111 billion, and then the authorities of both states set themselves the goal of bringing the figure to $200 billion in 2024. However, due to increased interaction, it was possible to reach this level ahead of schedule.
"In the current geopolitical conditions, relations between Russia and China have successfully passed the test of strength. Demonstrate a high degree of resilience... We have fulfilled the task set by the leaders of our states ahead of schedule to increase bilateral trade," Russian Prime Minister Mikhail Mishustin said at a meeting with Chinese State Council President Li Qiang in December.
According to the Chinese premier, cooperation between Moscow and Beijing "is built on a mutually beneficial basis" and in the next few years mutual trade will continue to grow. At the same time, the Russian Cabinet of Ministers considers it possible to reach $300 billion by 2030.
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China has been Russia's key trading partner for more than a decade. Moscow, in turn, over the past year was able to rise from tenth to sixth place in the list of Beijing's main export-import destinations, as previously stated by Russian President Vladimir Putin.
"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 said during his autumn visit to China.
External stimulus
The growth of mutual trade with the Asian republic accelerated markedly in 2022 after the West imposed large-scale economic sanctions against Moscow and the decision of many international companies to curtail work in Russia. At that time, Chinese business took advantage of the departure of competitors and began to actively occupy niches vacated in the Russian market. In the meantime, Russian enterprises began to massively reorient the supply of their products to the East.
As Vladimir Chernov, an analyst at Freedom Finance Global, told RT, today Moscow ships large volumes of metals, mineral resources, timber, food and seafood to Beijing. However, hydrocarbons are still the largest item of Russian exports to the Asian republic.
According to the latest estimates of Chinese customs, from January to November 2023, a little more than 73% of all supplies from the Russian Federation to China accounted for energy resources. Thus, according to the results of 11 months, Russia became the largest supplier of crude oil to China, having shipped 97.5 million tons of raw materials for $55 billion and ahead of Saudi Arabia (80 million tons for $50 billion). Moreover, Moscow now sells energy resources to Beijing at an average of $77.3 per barrel, which is noticeably higher than the price ceiling of $60 set by the West.
In addition, from January to November, Russia sent 7.5 million tons of liquefied natural gas to China for almost $5 billion and came in third place in the ranking of the main sellers, second only to Australia (21.7 million tons for $13 billion) and Qatar (14.5 million tons for $9 billion). At the same time, Moscow received about $5.9 billion from Beijing for pumping pipeline gas, while only Turkmenistan earned more ($8.8 billion).
China, in turn, has managed to significantly increase its presence in the Russian car market. If at the beginning of 2022 the share of Chinese models among new cars sold in the Russian Federation was only 9%, then by the end of 2023 this figure reached 61%. Such data is provided by the analytical agency "Autostat".
According to The Wall Street Journal, last year Russia became the main buyer of Chinese cars. This has helped Beijing top the ranking of the world's largest car exporters.
"In addition to passenger cars, China supplies us with engineering products and heavy equipment. Along with this, Russia is actively buying electronics and microchips, clothing and footwear, household appliances, as well as consumer goods from China," Vladimir Chernov said.
A remedy for sanctions
In general, the strengthening of trade cooperation with China has made it possible to minimize the impact of Western sanctions on Russia. This point of view was expressed in a comment to RT by Alexander Abramov, head of the Laboratory for Analysis of Institutions and Financial Markets at the Institute of Applied Economic Research of the Russian Presidential Academy of National Economy and Public Administration.
Initially, in the face of unprecedented external pressure from the West, a number of analysts predicted a collapse of the Russian economy by 10-25% in 2022. Nevertheless, the real decline was only 1.2%, which turned out to be even less deep than in the pandemic 2020 (2.7%), as well as the crisis years of 2015 (2%) and 2009 (7.8%). Moreover, according to the latest estimates of the Russian authorities, in 2023, the country's GDP fully won back the sanctions losses and grew by 3.5-4%.
"China is our main economic partner and plays a key role in Russia's recovery from the consequences of sanctions. At the same time, the Chinese yuan is an important instrument that partially replaces the dollar and the euro in the foreign exchange market of the Russian Federation," said Alexander Abramov.
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It should be noted that Moscow and Beijing have almost completely switched to settlements in national currencies instead of dollars and euros. According to the estimates of the Russian authorities, about 95% of mutual transactions between the parties are already 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%.
"The decline in the share of the dollar and the euro is primarily facilitated by the actions of the official authorities of the United States and the European Union. Representatives of these states are adopting more and more packages of sanctions, as a result of which the number of correspondent accounts, companies and financial institutions that can be involved in settlements in dollars and euros is decreasing... The process has already become self-sustaining. Russian entrepreneurs are actively using the yuan and the ruble... Moreover, we are now paying in yuan not only with China, but also with many other countries," Deputy Minister of Economic Development Vladimir Ilyichev said in an interview with RT.
According to Russian Finance Minister Anton Siluanov, confidence in the dollar and the euro has been undermined as the United States and Europe manipulate their currencies by printing them in unlimited quantities and using them as political leverage. Against this background, Russia, China and a number of other countries are increasingly beginning to make payments either in national currencies or in the currencies of friendly states that they trust.
"We reduce the risks of possible blocking of the money in which we conduct trading settlements. Previously, it was predominantly dollars. However, the dollar itself cut off the branch on which the entire system of international payments was built," Siluanov said in an interview with RT.