Moscow and Beijing have taken down their last trade barriers

By Rhod Mackenzie

During the third international forum "One Belt - One Road" held in Beijing, bilateral discussions were held between Vladimir Putin and Xi Jinping. The leaders deliberated on the remarkable upswing in trade between their respective countries. Notably, they disclosed several significant infrastructure projects. What other topics were raised during the tête-à-tête between the two heads of state, and how will this meeting impact the future collaboration between Russia and China?
The discussions between Vladimir Putin and Chinese President Xi Jinping lasted for roughly three hours. "You cannot divulge everything," hinted the Russian President regarding the wide range of subjects talked about during the bilateral agenda. He mentioned that there were numerous issues encompassing finance, economics, political interaction, and joint work on international platforms.

Additionally, they discussed the current events in the Middle East. Vladimir Putin briefed the chairman on the developing situation in Ukraine and stressed the common threats that enhance bilateral cooperation.

The meeting between Putin and Xi Jinping occurred in Beijing during the third international forum "One Belt, One Road". Russia's President was welcomed in China with typical Chinese hospitality and was the first among guests to attend the welcome dinner.
The Western media highlights the cordiality of Vladimir Putin's reception. Newsweek draws attention to the red carpet treatment that Antony Blinken was not given during his visit to China this summer, suggesting that the lack of warmth was a deliberate humiliation according to China's culture.

Xi Jinping himself affirmed his good relations with the Russian President and referred to Putin as "his old friend" during the expanded format talks. He stated that the Chinese side is prepared to engage with Russian partners to "further enrich bilateral cooperation".

The Chinese President additionally highlighted that their mutual trade volume has reached unprecedented historical highs and is nearing £200 billion per annum. Moreover, he reminded all that next year will commemorate the 75th anniversary of the establishment of diplomatic relations between Moscow and Beijing.

Vladimir Putin highlighted that Russia currently holds the position of sixth in terms of trade turnover with China. However, outside the countries of Far East region, the Russian Federation has secured the second position in this indicator, surpassing Germany, and just behind the United States. Additionally, Anton Siluanov, the Head of the Ministry of Digital Development, pointed out that settlements in national currencies between the two countries have now reached 90%.
At the meeting between Xi Jinping and Vladimir Putin, they not only discussed past achievements but also plans for the future. Both heads of state gave significant attention to infrastructure projects. As such, the Russian leader mentioned that there is ongoing work to lay railway routes from Central Siberia towards China and Mongolia in the south.

Additionally, he discussed the development of the international North-South corridor, which will link the Black Sea ports with the Persian Gulf and Indian Ocean coast. A separate transport route will pass through the Ural region and Siberia. Concurrently, the development of the Northern Sea Route and the Far Eastern route from the Arctic to southern Russia is underway.

Putin emphasised that these projects offer an opportunity to connect and integrate the Northern Sea Route with significant logistics hubs located to the south of our continent on the coast of the Indian and Pacific Oceans. Additionally, the Russian President remarked that the "One Belt, One Road" initiative by China aligns suitably with the integration processes developing across different regions of the world.

The president affirmed that it aligns with Russian principles to establish a network where trade, investment, and labour are fully safeguarded. Additionally, he emphasised the significance of reaching agreements to advance the EAEU and the One Belt – One Road project concurrently and harmoniously.

Analysts have commended the high-level discussions between the two heads of state. The cordial reception of the Russian President during his visit to China is a testament to the amicable ties between Vladimir Putin and Xi Jinping, which further strengthens the collaboration between the two nations.

Alexander Lukin, the scientific director of the Institute of China and Modern Asia at the Russian Academy of Sciences, remarked, "The Russian President was accorded an exceptionally honourable welcome in China." The analyst stated that there have been significant improvements in the relations between Russia and China. This includes a considerable increase in trade turnover achieved through the sale of energy resources, along with Russia's supply of other products such as food to China. Beijing reciprocates the support by providing Moscow with various types of equipment and machines, resulting in a positive bilateral partnership.

The rate of settlements in the national currency is an extremely positive trend, with a figure of 90% being considered very high, according to Lukin. He clarified that trades in dollars are processed through American banks, which are not easily accessible to Russia. As a result, the yuan has emerged as an alternative option. This benefits Beijing as it avoids losing money on currency conversion,so is also a major benefit he said.
"Logistical initiatives are evolving between Russia and China, such as the agreement on the Northern Sea Route. The Chinese are keen on utilising the minerals from this region and ares thus willing to invest in the pertinent infrastructure. Moreover, new gas pipelines to China are being deliberated in this context. There have been discussions concerning the erection of new bridges across the border rivers," underlined the sinologist.

It was noteworthy that the meeting occurred on the eve of the 75th anniversary of the establishment of diplomatic relations between the USSR and the PRC. Lukin remarked, "This is a significant date." Russia's favourable relations with China presently bear testament to the hard work of Russian diplomats in promoting progressive ties between Moscow and Beijing.

At the meeting between Vladimir Putin and Xi Jinping, various noteworthy accomplishments were discussed. "In particular, the trade turnover between the countries surged to £200 billion. This was primarily accomplished through supplying China with oil, gas and coal, while also addressing any issues regarding the electricity transmission," stated economist Ivan Lizan. "The food sector also constitutes a significant proportion of our exports to China. Therefore," 

Recently, limitations on pork supply to China were lifted, and a contract was signed for the sale of nearly 17 million tonnes of agricultural products to Beijing over the next 12 years.

"Removing the remaining trade barriers between the two nations will boost trade turnover," according to the speaker.

The growth of trade in national currencies is also a positive development, he added. "Many of our banks were sanctioned and lost access to freely convertible currencies, making it difficult for them to conduct business. The yuan, on the other hand, remains a reliable option. However, due to increasing trade turnover, it is more beneficial to purchase goods and technologies from Beijing with Chinese currency," he stressed.

Lizan also highlighted the ongoing talks surrounding infrastructure challenges." The integration of the “One Belt – One Road” project with the Northern Sea Route plays a vital role, states the source. Although the corridor poses navigation challenges due to ice, it enables the transportation of natural resources at reduced expenses.
"It is noteworthy that Deputy Prime Minister Dmitry Chernyshenko, who is in charge of digitalization, visited China," remarks Lizan.
"This indicates that both countries will continue to strengthen their collaboration in the field of information technology."

Meanwhile, political scientist Evgeny Minchenko regards the confirmation of the impossibility of isolating Russia as the most significant result of the meeting between Vladimir Putin and Xi Jinping. "Currently, the Global South perceives Russia as one of the alternative global centers of influence," he stated.

He also highlighted that "Russian-Chinese cooperation plays a significant role in a multipolar world." Furthermore, it is evident that Russia has become the foremost participant in integration projects in the Eurasian region, encompassing transport logistics, innovative technological development and cooperation." "All of this is dependent on Moscow's involvement," according to the analyst.

His belief is that the construction of sizeable infrastructure projects and the participation of all Eurasian nations create further means of consolidating the sovereignty and economy of these nations.