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“There should be no panic”: why China made an economic bet on Russia

The Chinese authorities decided to strengthen economic ties with Russia in various areas. “Vechernyaya Moskva” figured out why cooperation with Russia is beneficial for the Celestial Empire, the state of trade between the countries now, and whether disagreements may arise between them.

Turnover record

The Wall Street Journal ( WSJ ), citing sources in the Chinese government, reported that Chinese President Xi Jinping ordered to increase imports of Russian oil, gas and agricultural products. In addition, the head of the Chinese state called for strengthening the energy partnership with Russia in the Arctic and investing in Russian infrastructure, including ports and railways.

The WSJ also recalled a story that happened several years ago. At the Chinese Tsinghua University, Xi Jinping was presented with a report from which it followed that the Russian economy has no future. In response, Jinping wrote the word “nonsense” in the margin.

According to the General Administration of Customs of China, in 2022, trade between Russia and China reached a record level : in just 11 months, it grew by 32 percent compared to the same period last year and amounted to almost $172.5 billion. According to the agency’s statistics, the Celestial Empire sold $67.3 billion worth of goods to our country (an increase of 13.4 percent year-on-year). Russia supplied goods worth $105 billion to China (an increase of 47.5 percent).

China is an active buyer of Russian oil, gas and coal. It is energy carriers that are Russia’s main source of income in trade with China. There are plans to expand trade in the energy sector: for example, China recently built an additional section of a gas pipeline on its territory , connected to the Power of Siberia pipeline, which now reaches Shanghai. The Chinese government plans to complete the construction of the entire network by 2025.

The main deliveries from China to Russia fall on cars, machinery and chemical products ( data for August of this year). In addition, China supplies a variety of goods to our country: toys, household appliances, clothes, shoes, and more. The increase in trade between Russia and China is the result of a “high level of complementarity” between the two economies, Sun Kui, president of the Institute for Contemporary Russian-Chinese Economic Regional Studies , said in an interview with the Chinese Global Times .

Preferred Partner

The head of the Center for Asia-Pacific Studies at IMEMO RAS Alexander Lomanov, in an interview with Vechernyaya Moskva, noted that China had long wanted to develop cooperation with Russia and in 2022 received an excellent opportunity for this. At the same time, the Celestial Empire does not abandon old plans and does not join the anti-Russian policy of the West.

“Russian-Chinese rapprochement began in the last years of the USSR, a milestone event was the visit of Mikhail Gorbachev to China in 1989,” recalls Lomakin. – China has always been set to cooperate with Russia, but our country was not ready for this in everything in the late 90s and early 2000s. The administrative transition from a planned model to a market one interfered with the matter, there was quite a lot of disorganization and illusions about Russia’s “growing” into the Western world economic order.

For Xi Jinping, since he came to power in 2012, Russia has also been an important partner, the expert is sure. In the first few years of his reign, he gave approximately equal priority to the United States and Russia. However, when China failed to negotiate an equal partnership with America, Russia became its priority partner.

The range of opportunities for mutual trade between Russia and China is very wide, the expert is sure. It is not only about production, but also about scientific developments.

“China is no longer what many people remember it from the past decades. Now it is a country with decent salaries, for which people are able to buy, including imported products. If they like the products, then including Russian ones. We do not abuse agricultural chemicals and genetically modified products, so Russian agricultural products and the food industry have a very good reputation in China,” the expert said.

In addition, China is strongly interested in Russian raw materials. The country has recently emerged from severe coronavirus restrictions, and its economy will revive strongly in the near future. And this will require an increase in oil and gas supplies, Lomanov stressed.

As for Russia, in our country in recent years there has been an increased consumer interest in household appliances and equipment from China.

– In the past, this was not of interest to many Russian industrialists, because all the same things could be bought better, easier and closer in the West. But due to the change in foreign economic relations, not only Russia is becoming a priority for China, but China has also risen many lines in the priorities for Russia this year, – the source of VM is sure.

Business fears

Chinese business is acting cautiously in relation to Russia. For example, recently it became known about the ban on the supply of Loongson processors. This ban affected not only Russia. A spokesman for the electronics market explained that the ban on the export of Loongson processors is due to the fact that China uses the best chipsets in the military-industrial complex. It was also reported that the Russian market could leave the Chinese smartphone manufacturer Huawei.

According to Lomanov, the fear of Chinese business to trade with Russia can be overcome through close cooperation between the countries.

— Chinese business is afraid of secondary sanctions, and this situation is not only in China. But with China, the situation is just favorable: if there is good political trust at the highest level (and Russia and China have it), there are prerequisites for solving these problems. Of course, there will be problems, but the specificity of our relations is that we can negotiate. Some conditions will be created for private business, organizational and economic support measures will be provided. Business should not be in a panic that participation in the Russian-Chinese partnership will cause some potential damage, – the interlocutor of VM is sure.

It is precisely the presence of political trust between Russia and China that is an undeniable advantage over Sino-American or Russian-European relations, Lomanov concluded.

Source : Вечерняя Москва