During the meeting of the Russian-Chinese Committee of Friendship, Peace and Development held in Beijing last week, Russian Ambassador to China Igor Morgulov said that as of the end of November 2023, «the trade turnover between Russia and China has already exceeded the $200 billion bar set by the leaders of the two countries for the end of 2024». Thus, we can conclude that the volume of rapidly developing bilateral trade has reached its target almost a year ahead of schedule. In Morgulov’s opinion, this is a great achievement, because due to external pressure, the last year and a half has become a test for the strength of Russian-Chinese ties, and the countries passed it with dignity. Perhaps, one cannot disagree with this.
In this regard, former Russian Ambassador to China Andrey Denisov drew attention to the trends in China’s trade relations with Russia and with the United States. In the first case they are developing, while in the second one they are stagnating. Although the gap in numerical indicators is still huge: in 2023, the PRC and the U.S. trade for about $700 billion, which is three and a half times more than the volume of Russian-Chinese trade. But the good news is that the gap is narrowing, as China-Russia trade is growing at an average annual rate of 30 percent. In 2015, China-U.S. trade totaled $558.27 billion, while with Russia it was $68.06 billion. In 2018, the figures have already reached the marks of $633.5 billion and $107.05 billion, respectively. In 2022, China and the United States supplied each other with $759.42 billion, while China and Russia supplied each other with $190.27 billion worth of goods. At the end of the first 10 months of 2023, China-U.S. trade totaled $550.7 billion, China and Russia $196.48 billion. Although the gap is still large, the trend is obvious.
Andrey Denisov, noting the rapid development, pointed out the sharp acceleration in the past two years. Denisov believes that quantitative growth should lead to qualitative changes. That is, we should assume a change in the nomenclature of exports, first of all, from the Russian side and a transition to industrial cooperation.
At the same time, Denisov expressed a rather interesting consideration for understanding the Chinese mentality. «In general, I would say that China has very experienced and skillful economic planners, who perfectly arrange the pieces on the chessboard and do not mix these two areas (politics and economics — Auth.), do not make one dependent on the other. They have learned to draw a line between one and the other, not to mix one with the other and not to achieve one thing at the expense of the other», he emphasized.
To simplify, we are talking about Chinese pragmatism, which mainly drives our partners: for the sake of their practical interest, they are ready to turn a blind eye to some secondary things. If we understand this source code, we can better find common ground and achieve success.
It should be recognized that the driver of trade with China is still hydrocarbons, raw materials and other goods. Nevertheless, there is a positive trend. Russian small and medium-sized businesses are actively trying to develop the Chinese market. Modern methods of trade organization are used, where the role of intermediaries is taken over by automated platforms.
According to Aleksey Murzenok, Director of International Partner Programs at the Russian Export Center, Russian manufacturers have already made more than 1 billion retail sales in China through national Made in Russia stores on China’s marketplaces. This is one of the channels that the REC’s Made in Russia store opened in 2019 on Chinese retail e-commerce platform Tmall.com. Now exporters can enter the Chinese market through national stores on 8 marketplaces, including Taobao, JD.com, Pinduoduo, WeChat and Douyin. In total, Russian manufacturers can place their products on the online shelves of 27 national stores on 14 marketplaces. Other companies have emerged that are making it easier for Russian trading companies to operate in China through the digitalization of processes.
The export of Chinese cars to Russia has shown explosive growth, with 5.5 times more cars sold than in the previous year. And as experts believe, this is only the beginning. China, which has launched a large-scale expansion of its automobile industry around the world, considers the Russian market as one of the most promising. The opening of new directions of Russian exports to China is also expected. For example, this year the ban on Russian pork supplies to China was finally lifted.
Igor Morgulov, the current Russian Ambassador to China, also noted the dynamic development of bilateral relations. And, according to him, it is important that the positive trend is observed despite the pressure from the United States and its allies. In addition to the stable, expressed in tens of percent growth of bilateral trade turnover, there is a significant increase in the share of settlements in national currencies in mutual trade, building industry cooperation — «despite blackmail and threats from opponents». «As for mutual political trust during this period — it has only strengthened. Under the new conditions, Moscow and Beijing have confirmed the strategic choice in favor of further consistent development of cooperation regardless of fluctuations in external factors», the ambassador said.
And this is a good support for further development of economic relations. It should be assumed that it will take only a few years to double the volume of mutual trade.
At the same time, of course, Russia should not rely on China as its only trading partner and fall into dependence. There are many countries in Southeast Asia that can offer a worthy alternative to Chinese goods.