In the beginning of the year, the value of China’s exports to Russia increased by about half of a year ago. Imports also increased clearly.
Does Russia get support from China? Are the countries converging?
These questions have been on the back burner ever since Russia started a war of aggression. Based on the most recent trade figures, the relationship between China and Russia only seems to be getting closer.
In January-March of this year, China’s exports to Russia increased by half from a year ago, and imports were about a third more. The figures are published by the Bank of Finland’s Research Institute for Emerging Economies (Bofit) from the information collected (you move to another service).
China’s trade with Russia has been growing for years, but after the start of the war, trade flows began to increase strongly.
– Chinese companies are taking advantage of the war situation to the best of their ability. China consumes a lot of raw materials and they can be found in Russia, says a senior economist Heli Simola From Bofit.
Most of China’s imports to Russia are energy. There are no longer buyers for Russian energy in Europe, and that is why Russia trades especially its most important export product, i.e. crude oil, at a cheap price to China and India.
China’s balancing act continues
Trade relations between China and Russia are not even, but China dominates the relationship by far.
Russia, on the other hand, is becoming more and more dependent on China. It has especially received machinery and equipment, cars and, for example, electronics from China. At the end of last year, China’s share of all Russian imports was already about 40 percent, while a year earlier it was about 25 percent.
For China, Russia is not such a significant trading partner, even though trade flows to the country waging a war of aggression have increased. Russia still accounts for only a few percent of China’s total foreign trade.
Europe and the United States have much greater economic importance for China, emphasizes the professor of international politics Juha Vuori from the University of Tampere. Because of this, China balances between Russia and the West and does not want to give too obvious support to Russia’s war effort.
– China has sometimes given indications that it condemns certain things, such as nuclear weapons, but at the same time it has not joined sanctions issues, which can be seen precisely in these trade relations, says Vuori.
According to Vuori, despite the intensified trade relations, China does not seem to have fully joined the Russian bandwagon. Since the start of the war, it has been repeatedly assessed whether China will or could in the future provide direct military support to Russia. According to Vuori, this still seems unlikely.
– Its economic cost would be on a completely different scale than what this conflict has cost China so far.
The EU wants to intervene in the cycle of sanctions, Chinese companies may face sanctions
Based on the statistics, China has not, at least on a large scale, exported products to Russia on which the European Union has imposed sanctions, says Heli Simola.
– However, there are some regrettable exceptions.
The EU is concerned about the evasion of the sanctions and it has not taken kindly to the fact that trade flows to Russia’s neighboring countries such as Kyrgyzstan, Kazakhstan and Uzbekistan have increased strongly since the start of the war. Concern is also directed at Turkey and China.
The EU is expected to intervene in the 11th sanctions package. According to media reports, too sanctions are planned for some Chinese companies (you will switch to another service)because they have supplied Russia with products that can be used in warfare.
According to Juha Vuori, China would probably respond to this type of sanctions. He considers it expected that the EU will start targeting Russia-related sanctions to third countries as well, but believes that China will not be the first target.
– I personally think that it is more likely that it would start from some other country and thus serve as a warning to China that this can also be done.
The tightening of trade relations between China and Russia is not a surprise in itself. After the meeting of the countries’ leaders in March Vladimir Putin said that China is clearly Russia’s most important economic partner. According to Putin, the negotiations also discussed increasing energy cooperation at that time.
At the beginning of the year, got to know the Chinese town of Heihe, located on the Russian border, which was waiting for Russian tourists.
What thoughts do you have about China’s trade with Russia? The topic can be discussed until Thursday, May 11 at 11 p.m.