Russia increases its energy exports to China with the prospect of losing the market with Europe


Beijing has avoided condemning Russia’s invasion of Ukraine, opposes sanctions against Moscow and regrets sending Western weapons to Ukrainian troops.

China imported $72.9 billion worth of raw materials from Russia between January and August this year, up 50% from the same period in 2021, Russia’s “Kommersant” newspaper reported Wednesday, citing data from Customs Statistics. Office from China. However, the Asian country’s exports to neighboring Russia, mainly capital goods, grew by only 8.5% to $44.2 billion.

As a result, Russia’s trade surplus with China has quadrupled in 2022, mainly due to the increase in the supply of Russian raw materials, especially gas and oil. Such a trend is part of Moscow’s new strategy to “turn east” in the face of the deterioration of its relations with the West as a result of the sanctions imposed as a result of the invasion of Ukraine.

Chinese customs data shows that the volume of trade with Russia is not reciprocal. In his speech at the Eastern Economic Forum, in the Russian city of Vladivostok, China’s representative, the head of the legislature, Li Zhanshu, said on Wednesday that an acceleration of supplies to Russia of Chinese equipment, which Moscow needs to replace them by those who are no longer supplying the United States and Europe because of the sanctions.

In August, Russian trade with China accelerated. Russian exports to the Asian country grew by 59% year-on-year (after 49% in July). Deliveries from China to Russia increased by 26.5%, after reaching 22% in July. Overall, Russian exports to China grew by 50% over the past eight months, while in the opposite direction increased by 8.5%.

In this way, the surplus on Russia’s trade with China, according to ‘Kommersant’, amounted to $28.7 billion, a fourfold increase over the year from $7.3 billion until January. At the same time, the share of exports from Russia in total Chinese imports increased to 4% since the beginning of the year (2.9% in 2021) and the share of deliveries to Russia in total Chinese exports decreased to 1.9 % (2% in 2021). In other words, for Russia, China’s importance as a trading partner is only increasing.

If 5% of China’s imports came from Russia in 2002, they reached 25% in 2021. The Roscongress Fund report, released this week at the Eastern Economic Forum, assures that “the planned increase in the share of both imports and exports in light of the current large-scale restructuring of Russia’s foreign trade every argument offers to foretell a further expansion of China’s presence.” According to Russian President Vladimir Putin at Wednesday’s plenary session, trade with China could reach the $200 billion threshold as early as 2022.

However, the structure of Russian exports to China is one of the least diversified compared to Russia’s other trading partners, Roscongress says, stressing that oil, its derivatives, gas, coal and lignite, account for 68% of the volume’s value. deliveries and 78% in quantitative terms. Also taking into account that “the physical flow of raw materials from Russian energy suppliers to China is stable and expanding”. On the other hand, important Russian items for China are low added value products. According to 2021 data, frozen fish accounts for 29.6% of all imports from China, fertilizers (28%) and timber (16.7%). Russian oil accounted for 16% of China’s purchases, but is now increasing.

“Kommersant” points out that “China is in no hurry to step up its exports to the Russian Federation.” “It is not uncommon for Chinese banks to be extremely careful with their Russian customers” for fear of being caught helping Moscow evade sanctions and being subject to sanctions itself, Alexei Dajnovsky, Russia’s trade representative in Russia, explained on Wednesday. Vladivostok, Beijing.

“However, we understand the origins of this course of action and are convinced that both Russia and China must do the corresponding work (…) to create a cross-border payment mechanism beyond the reach of hostile sanctions,” Dajnovsky said. . for those present at the Vladivostok forum.

Li Zhanshu, “number three” in his country’s state hierarchy and head of the Communist Party of China with the highest rank to travel to Russia since the start of the military intervention in Ukraine on Feb. 24, spoke in his Address to attendees at the Eastern Economic Forum of the need to develop regional cooperation in the Far East “by removing barriers to trade and ensuring the safe and smooth functioning of value chains”. In his words, “we need to create a more sustainable, safe and open environment for investment and trade, thus reinvigorating economic globalization.” The senior Chinese official called for “adherence to the concept of common, comprehensive, joint and lasting security, to leave the game without sums and the Cold War mentality.”

Beijing has avoided condemning Russia’s invasion of Ukraine, opposes sanctions against Moscow and regrets sending Western weapons to Ukrainian troops. Putin and his Chinese counterpart, Xi Jinping, met in Beijing in early February for the opening ceremony of the Winter Olympics, and will meet again in Samarkand, Uzbekistan, in the middle of this month.

Source: La Verdad


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