In the first 6 months of 2023 China-Russia trade up 40%

By Rhod Mackenzie

In the first half of 2023,the volume of trade between the Russian Federation and China grew by 40% - previously the countries have not shown such results, said the head of the Institute of Asian and African Studies at the Lomonosov Moscow State University, Alexey Maslov, speaking at the session "Chinese business in Russia: prospects for further growth" within the framework of the Eastern Economic Forum in Vladivostok. During this period, the figure reached $115 billion, added First Deputy Chairman of the Board of Directors of Sberbank Alexander Vedyakhin. 2023 will surpass 2022 and the countries "will make a huge trade turnover", he is sure.

Good trend
Trade turnover between Russia and China in the first half of 2023 amounted to $115 billion, for the whole of last year the figure was $190 billion.

" It is obvious that we will exceed 2022 and make a huge trade turnover," said First Deputy Chairman of the Board of Sberbank Alexander Vedyakhin, speaking at a WEF session dedicated to the prospects for the development of Chinese business in the Russian Federation.

According to the head of the Institute of Asian and African Countries at Moscow State University. M.V. Lomonosov Alexey Maslov, we are talking about growth of 40% in the first half of 2023. So far, trade between states has not shown such a growth rate, he emphasised.
The structure of trade between countries has changed over the past year, the Sberbank representative added. If before "everything was quite simple": energy resources were exported from Russia and consumer goods from China, "now we see a lot of equipment, service solutions and so on coming to us from China. "This country has largely replaced in Russia Federation the suppliers from Central and Eastern and the USA ,this is a good trend, the analyst noted.
According to Alexander Vedyakhin, China not only supplies Russia with goods, but also invests into Russian companies. According to Sberbank's estimates, the budget for new projects with Chinese capital is about 2 trillion roubles - "these are big numbers for the Russian economy, we are talking about strategic cooperation," he added. Today, there are more than 7.5 thousand companies with Chinese participation in the Russia, whereas 20 years ago there were only a few dozen.

• We, at Sber, welcome our Chinese partners here in Russia and are also actively developing our presence in China: the company already has a representative office there. In addition, the bank is working on opening a branch in China," the analyst stated. - We have the most diverse relations with our partners in China: in particular, we look at the technological solutions that exist in China and try to bring them to us. On the other hand, we also have technological developments - for example, Sber has already discussed with its Eastern partners what the company can share.
• According to the Union of Chinese Entrepreneurs, the total contribution of Chinese organisations in Russia can be estimated at more than $60 billion, said Zhou Liqun, the organisation's chairman. The Union brings together some 300 companies that are actively developing in the country. This year, for example, a serious breakthrough was made in the Russian Federation by companies in the automotive industry, which promoted both finished products and technologies, Zhou Liqun said. As a result, the share of the country's automotive giants (such as Chery, Greatwall and Geely) has risen sharply in recent years - from 5% to 40%. This result will also make it possible to increase turnover between the countries to more than $200 billion by the end of the year.
  Closer to the Far East
  China is particularly interested in the Far East, Natalya Nazarova, head of the Institute of Economics and Entrepreneurship, told Izvestia. The majority of foreign direct investment goes to this region - there are already 26 infrastructure projects financed by Chinese state-owned companies. Chinese investment is constantly growing, and the Far East is Russia's most important asset in attracting Chinese investment.
  Primorsky Krai is an important gateway for new Chinese business projects, agrees Alexey Malov of the Institute of Asian and African Countries at Lomonosov Moscow State University. In fact, the region has been building a strategic partnership with China for years, said Nikolai Stetsko, the region's deputy head of government. He emphasised that "these are geography, economic ties and five international road checkpoints. "
• And if the turnover of the Russian Federation and China as a whole in the country increased by 40%, then in the Primorsky Territory in the first half of the year it increased by 62%. We are personally supporting key investment projects with Chinese capital," Nikolai Stetsko emphasised. Our region is interesting for Chinese business because every second container that passes through the country's sea ports is processed here," he stressed. The Primorsky Krai is actively developing its seaports: in the next 10 years, for example, the seaport cargo turnover will double to around 300 million tonnes.

According to the Russian-Asian Union of Industrialists and Entrepreneurs, at the beginning of 2023 China will rank 22nd among all direct investors in to the Russian economy: China has focused its attention on replacing companies that have left the country, Natalya Nazarova noted. The most promising sectors for Chinese investors are gas chemistry, oil refining, agriculture, engineering, IT and high technology, and transport infrastructure, she emphasised.
On the one hand, Chinese companies are trying to fill the vacuum created by the departure of Western transnationals, but there is also a reverse trend, Natalya Nazarova continues. Fear of Western sanctions has forced Chinese technology companies such as Huawei and DJI to leave Russia. It will be increasingly difficult for large companies, including state-owned ones, to evade restrictive measures. As a result, the Russian market will become the most attractive for private regional companies from China that aim to produce consumer goods and have no plans for international expansion," the analyst noted.