CC BY
7DOI 10.24412/cl-37234-2024-1-299-307
BILATERAL TRADE BETWEEN CHINA AND RUSSIA: TRENDS, CHALLENGES AND OPPORTUNITIES
N. Saprikina, L. Yanan
Belgorod State National Research University [email protected], [email protected]
ABSTRACT
The authors analyse the current tendencies of development of the foreign trade between China and Russia and determine the opportunities and challenges to the future development of China-Russia trade. Keywords: foreign trade, bilateral trade, China, Russia, trade imbalance.
The foreign trade between China and Russia has been a significant aspect of their bilateral relationship in recent years. The economic cooperation between these two major powers plays a crucial role in fostering regional stability and promoting mutual development.
Numerous studies are devoted to the questions of China-Russia economic cooperation [1-4; 7-9] and to the tendencies and prospects of their bilateral trade in the context of Belt and Road Initiative [6; 11], in the conditions of US-China trade war and in the conditions of foreign sanctions again Russian economy.
The purpose of the present article is to examine the trends, patterns, and dynamics of the trade relationship between the two countries for the six years' period, 2017-2022. By delving into the details of import and export data the authors gain insights into the factors driving the trade between China and Russia. Additionally, the present study sheds light on the opportunities and challenges for further development of the bilateral China-Russia trade and the economic cooperation in future.
The scope of analysis primarily focuses on the quantitative aspects of the China-Russia trade relationship, utilizing official statistics and reports from the relevant government agencies. It also takes into account key political and economic factors that may have influenced the trade dynamics during the specified time frame. Furthermore, this analysis provides a foundation for understanding the overall trajectory of China-Russia trade relations and offers recommendations for enhancing the bilateral economic cooperation between the two nations.
China and Russia are important trading partners and their bilateral trade relationship has undergone significant development in recent years (Fig. 1).
Figure 1. The dynamics of the total trade volume between China and Russia,
2017-2022, bln USD.
200 150 100 50 0
84
I
190,3
146,9
107,1 110,8 107,8
2017 2018 2019 2020 2021 2022
■ Total Trade Volume (USD billions)
Source: Ministry of Commerce of China. Statistics. 2017-2022. URL: http://eng-lish.mofcom.gov.cn/article/statistic/foreigntradecooperationl
The total trade volume between China and Russia witnessed a steady growth trend from 2017 to 2022, with occasional fluctuations. Starting at 84 billion USD in 2017, the trade volume increased consistently, reaching its peak at 190.3 billion USD in 2022. Notably, there was a significant jump in trade volume in 2021, where it soared from 107.8 billion USD to 146.9 billion USD. This data highlights the strengthening trade relationship between China and Russia, underscoring their growing economic ties over the analyzed period.
To provide a more complete analysis of the trade relationship between China and Russia, it is crucial to examine not only the total trade volume but also the specifics of exports and imports between these two nations. Table 1 presents six years' worth of data on the exports and imports between China and Russia.
Table 1. The dynamics of export and import between China and Russia from _2017 to 2022, bln USD.
Year Export from China to Russia (USD billions) Import from Russia to China (USD billions)
2017 42.9 41.2
2018 47.9 59.1
2019 49.7 61.1
2020 50.6 57.2
2021 67.6 79.3
2022 76.1 114.1
Source: Ministry of Commerce of China. Statistics. 2017-2022. URL: http://eng-lish.mofcom.gov.cn/article/statistic/foreigntradecooperation/
Starting with export from China to Russia, there is a clear increasing trend observed throughout the six-year period (Table 1). The figures show a steady growth
from 42.9 billion USD in 2017 to its highest point at 76.1 billion USD in 2022. The data suggests that China has significantly increased its exports to Russia over time, indicating a positive trend in bilateral trade. It is notable that the most significant increase in exports occurred between 2020 and 2021, where exports rose by almost 20 billion USD from 50.6 billion USD to 67.6 billion USD. This substantial surge indicates an upsurge in exports, resulting in an even higher trade surplus for China.
Looking at the import from Russia to China, there is also an upward trend observed throughout the years, with some fluctuations. While the figures show a general increase in the import figures, the trend is not as linear as that of export. In particular, there are two significant surges in imports observed in 2021 (reaching 79.3 billion USD) and in 2022 (reaching 114.1 billion USD), which are much higher than any other year analyzed. It is worth noting that the import figures starting from 2018 have always been higher than the export figures, resulting in a consistent trade deficit for China in bilateral trade relationship with Russia. The gap between export and import values widened from 11.2 billion USD in 2018 to 38 billion USD in 2022, indicating China's role as an importer to Russia, which has remained relatively steady over the years. Overall, these data suggest that the trade relationship between China and Russia has been positive, with continued growth in exports and imports, although with a persistent trade deficit for China.
Figure 2 illustrates the export product structure from Russia to China from 2017 to 2022. It presents the percentage distribution of various product categories in Russia's exports to China during this period. The chart provides valuable insights into the composition of the bilateral trade relationship between these two countries.
Figure 2. Export product structure from Russia to China, per cent, average data for the time period 2017-2022.
13.55%
■ Mineral Products ■ Wood Pro ducts ■ Machines "Metals "Others
Source: General Administration of Customs of China, 2017-2022. URL: http://eng-lish.customs.gov.cn/statistics/Statistics ?ColumnId=6.
It's evident from the data presented on Figure 2 that, firstly, mineral products dominate Russia's exports to China, accounting for a substantial 70.99%. This highlights the significant role of the energy and natural resources sector in the bilateral trade relationship. Secondly, while wood products, machines, and metals hold smaller shares in the export mix (6.29%, 3.85%, and 5.32% respectively), they indicate the presence of diverse industries and potential opportunities for technological cooperation and infrastructure development. Lastly, the "Others" category, comprising 13.55%, represents a range of product categories contributing to the trade relationship.
Figure 3 represents the export product structure from China to Russia for the years 2017-2022. It provides an overview of the percentage distribution of various product categories in China's exports to Russia during this period. The categories included are miscellaneous, textiles, machines, metals, transportation, and others.
Figure 3. Export product structure from China to Russia, per cent, average data for the time period 2017-2022.
5,22%
7Q10/0
■ Miscellaneous ■ Textiles ■ Machines ■ Metals ■ Transportation ■ Others
Source: General Administration of Customs of China, 2017-2022. URL: http://eng-lish.customs.gov.cn/statistics/Statistics?ColumnId=6.
According to data presented on Figure 3 the export product structure from China to Russia during 2017-2022 is dominated by machines, with a share of 45.74% in 2021. The "Others" category has the second-largest share, ranging from 26.41% in 2022 to 26.84% in 2017, indicating a diverse array of products exported from China to Russia. Textiles and metals also have a notable presence, while transportation and miscellaneous categories have smaller shares. Overall, the data suggests that China has been a significant supplier of machinery and equipment to support
7,51%
26,41
7,16
45,74%
Russia's infrastructure and industrial development, as well as exporting a variety of goods to cater to Russia's diverse needs.
The political relations between China and Russia have played a significant role in shaping their trade relationship. Both countries have maintained a close political partnership, often described as a strategic partnership. This has resulted in enhanced cooperation in various areas, including trade. The strong political ties have fostered a favorable environment for trade, leading to increased collaboration and mutual support in trade-related activities. Diplomatic efforts, high-level visits, and bilateral agreements between the two countries have helped establish frameworks and promote trade facilitation measures, contributing to the growth of trade between China and Russia.
Economic factors have also influenced the foreign trade between China and Russia. Changes in GDP, inflation rates, and exchange rates have all had an impact on the trade dynamics. When both economies experience stable economic growth, it tends to lead to an increase in bilateral trade. A growing GDP indicates higher domestic demand, driving imports from China to Russia and vice versa. Inflation rates can affect the prices of goods, which might influence the volume and value of trade. Additionally, fluctuations in exchange rates between the Chinese yuan and the Russian ruble can impact the competitiveness of exports and imports, influencing trade patterns between the two countries.
Trade policies implemented by both China and Russia have had a significant impact on their trade relationship. Bilateral trade agreements, preferential trade arrangements, and tariff policies can create opportunities or barriers to trade. For instance, tariff reductions or exemptions established through trade agreements can stimulate trade growth by lowering trade costs and facilitating market access. Harmonizing of customs procedures and reducing of non-tariff barriers are also crucial for smooth trade flows. Additionally, the implementation of trade protection measures such as tariffs or quotas can restrict trade and challenge the trading relationship. Trade policies need to strike a balance between protecting domestic industries and facilitating trade, considering the long-term benefits of bilateral trade cooperation.
In general, the foreign trade between China and Russia is influenced by various factors. The close political relations between the two countries have created a conducive environment for trade cooperation. Economic factors such as changes in GDP, inflation rates, and exchange rates have also impacted trade patterns. Trade policies implemented by both countries have played a crucial role in shaping the trade relationship, with bilateral agreements and tariff measures affecting trade
flows. Understanding and addressing these factors are essential for fostering a mutually beneficial and sustainable trade relationship between China and Russia.
Based on the provided data, the trade relationship between China and Russia has shown growth and potential in recent years. From 2017 to 2022, China's exports to Russia increased steadily from $42.9 billion to $76.1 billion, while imports from Russia also witnessed a positive trend, rising from $41.2 billion to $114.1 billion. This indicates an expanding trade volume between the two countries, presenting opportunities for further economic integration and collaboration. On one hand, the significant increase in import values from Russia suggests a growing demand for Russian goods in the Chinese market, highlighting the importance of Russian resources and products in fulfilling China's domestic needs. On the other hand, the consistent growth of Chinese export suggests a growing demand for Chinese goods in the Russian market, particularly in advanced manufacturing and information technology sectors. However, to ensure sustainable trade development, efforts should be made to address trade imbalances and promote diversification in both exports and imports.
While the data demonstrates the increasing volumes of trade between China and Russia, there are also challenges that need to be addressed. One challenge is the trade imbalance, as China consistently imports more goods from Russia than it exports. This trade disparity may hinder the long-term sustainability of the trade relationship and requires efforts to promote balanced and mutually beneficial trade. Additionally, global economic uncertainties, such as trade protectionism and geopolitical tensions, can impact trade flows between the two countries. These external factors emphasize the need for adaptability and resilience in navigating the ever-changing global economic landscape. Furthermore, regulatory and administrative barriers, such as non-tariff barriers and technical standards, can impede trade efficiency and create hurdles for businesses. Streamlining bureaucratic processes and harmonizing regulations would contribute to a more conducive trade environment, fostering further growth in China-Russia trade.
Regarding diversification of exports and imports, both countries should explore new areas of cooperation to expand the range of goods and services traded. In particular, energy cooperation has been an important area for both countries, with Russia being a major supplier of oil and gas to China. However, there is potential for further collaboration in renewable energy, such as wind and solar power. Moreover, e-commerce has become increasingly important for cross-border trade, particularly during the COVID-19 pandemic. Encouraging businesses to leverage e-commerce platforms can help facilitate trade and overcome logistical barriers.
To address the trade structure imbalance, China can increase imports of high-
quality Russian goods and services, particularly in strategic sectors such as aerospace, defense, and nuclear energy. Additionally, encouraging Chinese companies to invest in Russia can help promote balanced economic growth in both countries. To this end, both countries should work to improve investment conditions and provide more favorable policies and incentives for investors.
Innovation and technology cooperation can also play a significant role in driving future growth of China-Russia trade. Both countries boast strong capabilities in advanced manufacturing, the internet of things, and artificial intelligence. Promoting cooperation in these areas can enhance the competitiveness of both countries in the global market, facilitating trade and creating new growth opportunities.
Improving the business environment is crucial to fostering a more conducive environment for trade. Both countries should streamline administrative procedures and harmonize standards and regulations to reduce bureaucratic hurdles for businesses. Additionally, promoting greater transparency and predictability in policy-making can help build trust between businesses and governments.
Finally, institutional cooperation between China and Russia can deepen economic integration and promote long-term sustainable trade development. The Belt and Road Initiative and the Eurasian Economic Union are two examples of such cooperation that can contribute to greater connectivity and economic interdependence between the two countries.
In conclusion, the foreign trade between China and Russia has experienced steady growth and positive trends from 2017 to 2022. The total trade volume between the two countries increased consistently, reaching its peak at 190.3 billion USD in 2022. The analysis of export and import data reveals that China has significantly increased its imports from Russia over the years, indicating a positive trade relationship. Although there is a persistent trade deficit for China, the export figures also show a general upward trend, with a significant surge in 2021.
The trade relationship between China and Russia is influenced by various factors. The strong political ties and strategic partnership between the two countries have created a favorable environment for trade cooperation. Economic factors such as GDP growth, inflation rates, and exchange rates have also played a role in shaping trade dynamics. Trade policies, including bilateral agreements and tariff measures, have had a significant impact on trade flows.
Looking ahead, there are opportunities for further development and collaboration in China-Russia trade. The increasing demand for Chinese goods in the Russian market and the importance of Russian resources for China's domestic needs present avenues for economic integration. However, challenges such as the trade imbalance and external uncertainties need to be addressed. Efforts should be made to promote
balanced and mutually beneficial trade, navigate global economic uncertainties, and address regulatory barriers.
Overall, fostering a sustainable and mutually beneficial trade relationship between China and Russia requires continued efforts in promoting diversification, addressing trade imbalances, enhancing trade facilitation measures, and strengthening cooperation in various sectors. By doing so, both countries can further deepen their economic ties, contribute to regional stability, and promote mutual development.
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ДВУСТОРОННЯЯ ТОРГОВЛЯ МЕЖДУ КИТАЕМ И РОССИЕЙ: ТЕНДЕНЦИИ, ВЫЗОВЫ И ВОЗМОЖНОСТИ
Н.А. Саприкина, Ли Янан
Белгородский государственный национальный исследовательский университет [email protected], [email protected]
АННОТАЦИЯ
В статье анализируются текущие тенденции развития двусторонней торговли между Китаем и Россией и определяют угрозы и возможности развития взаимной торговли Китая и России. Ключевые слова: внешняя торговля, двусторонняя торговля, Китай, Россия, несбалансированность внешней торговли.
