“Relations are at their peak”: the Kremlin announced the rapid growth of trade and economic partnership between Russia and China

The strategic partnership between Russia and China has reached an unprecedented high level and will only intensify in the foreseeable future.

This was announced on Tuesday, March 12, by the press secretary of the Russian President Dmitry Peskov.

“Relations... between our country and the People’s Republic of China are at their peak, and let’s hope that this is not the peak yet and we will continue to develop... Obviously, such development is accompanied by the rapid growth of trade and economic relations,” Peskov said.

According to the General Administration of Customs of the PRC, in 2023, Russian-Chinese trade turnover increased by more than a quarter and for the first time exceeded $240 billion. Moreover, with the onset of 2024, the volume of mutual trade continued to grow and from January to February increased by 9.3% in annual terms - up to $37.01 billion.

It is noteworthy that back in 2019, the trade turnover between the Russian Federation and China was only about $111 billion, and then the authorities of both states agreed to almost double this figure over the next five years.

However, it was possible to achieve the intended goal ahead of schedule.

• © RIA Novosti / Sergey Guneev

“We set a goal with my colleague, friend, with Chairman (PRC. -

RT

) Xi Jinping, that this year (2024. -

RT

) trade turnover with China was to reach $200 billion.

And we exceeded this bar (in 2023 -

RT

)... A very important thing: we have a balanced trade turnover, and it complements each other in the high-tech sector, in the energy sector, and in the field of scientific development .

It is very balanced,” Russian President Vladimir Putin said in an interview with American journalist Tucker Carlson.

As the Kremlin previously noted, Beijing has remained Moscow’s largest trading partner for 14 years.

Russia, in turn, according to the results of 2023, rose to fourth place in the list of the main export-import destinations of China after the USA, Japan and South Korea.

External impulse

The growth of mutual trade with the Asian republic accelerated noticeably in 2022 after the West introduced large-scale economic sanctions against Moscow and the decision of many international companies to curtail their work in Russia.

Then Chinese business took advantage of the departure of competitors and began to actively occupy niches being vacated in the Russian market.

Meanwhile, Russian enterprises began to massively reorient the supply of their products to the East.

“In just two years, trade turnover has increased by more than one and a half times against the backdrop of a significant change in the structure of Russian foreign trade after February 2022.

The role of the main source of foreign goods has shifted from the European Union to China, whose share of our imports increased from 27 to 45%, while the share of developed economies fell from 47 to 17%.

As for Russian exports, here the share of unfriendly sales markets decreased from 57 to 15%, and China increased from 13 to 28%,” Olga Belenkaya, head of the macroeconomic analysis department of Finam Financial Group, told RT.

According to Freedom Finance Global analyst Vladimir Chernov, today Moscow and Beijing are developing joint projects in energy, industry, agriculture and high technology.

Moreover, in 2023, the volume of mutual trade was able to increase, including by expanding the capacity of the Northern Sea Route and optimizing transportation by rail, RT’s interlocutor emphasized.

“Russia supplies China with energy resources (oil, gas, coal, LNG, fuel oil, diesel fuel and jet fuel), timber products, agricultural products, metals, mineral resources and seafood.

At the same time, in 2024, a sharp increase in pork exports from the Russian Federation to China is expected, since the Celestial Empire has lifted restrictions on its supplies, and Beijing is the world’s largest importer of this type of meat product,” Chernov noted.

Simultaneously with the increase in its exports to China, Russia began to more actively purchase cars, industrial equipment, mechanical engineering products, electronics, household appliances, clothing, shoes and consumer goods from China, the expert added.

In his opinion, such a significant strengthening of trade ties has largely helped Russia cope with the economic restrictions of the West and recover faster from sanctions losses.

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Moreover, against the backdrop of a record increase in bilateral trade turnover, Moscow and Beijing have almost completely abandoned payments in dollars and euros.

According to the Russian government, today about 95% of mutual transactions between the parties are carried out in rubles and yuan.

For comparison: in 2022 this figure was only 50%, in 2020 - 24-25%, and in 2013-2014 - only 2-3%.

“After Russia was disconnected from the international SWIFT system, Moscow and Beijing apparently simply had no other suitable alternative payment options left.

By using rubles and yuan, countries have eliminated all external risks of blocking or freezing their assets and avoided double conversion through the dollar, reducing commission costs,” explained Vladimir Chernov.

No unnecessary risks

According to the forecast of the Russian authorities, in the coming years the volume of mutual trade with China will continue to grow and by 2030 could reach $300 billion. The Kremlin believes that the observed dynamics will not lead to the emergence of Moscow’s trade dependence on Beijing.

“We do not see political and economic threats in this... President Putin and Chairman Xi set the goal of further developing trade and economic relations... even before the start of the special military operation.

Therefore, this is a systematic, mutually beneficial development of trade and economic cooperation, which has long roots,” Dmitry Peskov emphasized.

Russian President Vladimir Putin called speculation about possible dependence on Beijing a “horror story” and noted that “you don’t choose your neighbors” and for centuries both countries have become accustomed to coexistence.

Moreover, as the president noted, China’s foreign policy philosophy is non-aggressive and the republic is always “looking for a compromise.”

“The growth rate of cooperation between China and Europe is greater and higher than the growth rate of cooperation with China of the Russian Federation.

Ask the Europeans: aren’t they afraid?

Maybe they are afraid, I don’t know, but they are trying to get into the Chinese market at all costs, especially when they are now faced with problems in the economy.

And Chinese enterprises are developing the European market.

Isn’t there a small presence of Chinese business in the United States?”

- Putin added.

Nevertheless, against the backdrop of a strengthening partnership with China, Russia should still strive to diversify its trade ties.

This opinion was shared with RT by the director of the Institute of Trade Policy at the National Research University Higher School of Economics, Alexander Daniltsev.

“There is no strong and immediate threat to increased interaction between Russia and China.

China is a good partner, but the more we develop cooperation with different countries, the better it is for us.

We can, for example, work more actively with Southeast Asia, Africa, the Middle East and Latin America.

As for China, the economic feasibility of trade interaction is important here: as long as it is beneficial for us, we will not become dependent on Beijing.

However, it is necessary to develop trade with other friendly countries,” concluded Daniltsev.