After the introduction of economic sanctions, Russia had to reconsider the priorities of foreign economic activity. China, as the country with the largest economy, is the largest exporter in the world. In addition, the geographical neighbor has strengthened its position as a strategic trading partner of Russia. The positive dynamics of trade between Russia and China is gradually increasing. As noted by the Chinese Ministry of Commerce, in less than 40 years, trade between Russia and China has grown more than 130 times, from $500 million in 1980 to $69.5 billion in 2016. China is Russia's main trading partner for both imports and exports. At the same time, Russia ranks tenth in terms of exports and ninth in terms of imports.
A bit of history
The economies of Russia and China could perfectly complement each other, at a fundamentally different level than now. After all, the Russian market buys more finished products with a high rate of added value, and sells mostly slightly processed raw materials. Such shifts in the trade turnover between Russia and China have occurred over the past twenty years as a result of the rapid growth of Chinese industry and not verysuccessful performance of Russian production.
In 1998, machinery and equipment in Russian exports accounted for 25%, now this item is about 2.2%. Trade turnover between Russia and China (from 1999 to 2008) shows a constant positive trend. At the same time, until 2006, the export of Russian goods was greater than the import of Chinese. However, imports of Chinese goods grew faster, and in 2007 Russia for the first time had a negative trade balance in mutual trade. China is becoming an increasingly important trading partner for Russia, ranking third for the first time in 2007 and first in 2010 in terms of trade. At the same time, the structure of Russia's exports is gradually shifting towards commodities. By 2011, the existing proportions in trade and economic relations between Russia and China had taken shape. The volumes and structure of trade between countries are determined mainly, on the one hand, by the success of economic reforms in China, and on the other hand, by the dynamics of commodity prices.
Plans and reality
Russia has several times set itself the goal of significantly increasing trade between countries. In 2014, when the trade turnover between Russia and China reached a maximum of $95.3 billion, Russian President Vladimir Putin said that by next year it is planned to beat the bar of $100 billion, and by 2020 $200 billion. So far, it has not been possible to achieve significant and permanent growth.
According to the General Administration of Customs of China, in 2017 the trade turnover between Russia and Chinaincreased by 20.8% compared to the previous one. In total, the parties traded for 84 billion dollars. Russia purchased $42.9 billion worth of Chinese goods, up 14.8% year-on-year, and sold $27.7 billion worth, up 27.7%. At the end of 2016, mutual trade grew by only 2.2% and amounted to $69.5 billion, while purchases in China grew by 7.3% ($37.2 billion), while sales of Russian goods fell by 3.1% ($32.2 billion). Mutual trade is gradually recovering after a catastrophic fall in 2015, when exports to Russia fell by 34.4% and imports by 19.1%. What was caused by a significant devaluation of the ruble, including against the Chinese yuan. The Ministry of Economic Development considers the increase in trade between Russia and China to be an important condition for ensuring the positive dynamics of the country's economic growth, the target of 200 billion by 2020 has not yet been canceled.
Russian exports
Mineral resources (including hydrocarbons) dominate Russian exports to China. The main Russian exports are oil and oil products, timber, nuclear equipment and armaments, fish, and pharmaceutical products. In 2017, Russia supplied $25.3 billion worth of hydrocarbons, about $4 billion worth of timber and wood pulp, and about $1.5 billion worth of armaments and equipment for nuclear power plants, each item. The next significant item of Russian exports is the supply of fish and seafood: a little more than 1 billion per2017. Sea products are mainly supplied from Primorsky Krai to the border regions of China, where there is practically no processing of local fish.
Import Russia
Russia imports machinery and equipment, clothes, shoes and other consumer goods, chemical products from China. The largest deliveries in 2017 fell on the following items: equipment - approximately $13.6 billion and electrical machines - $11.8 billion, about 6 billion were for the purchase of consumer goods (clothes, shoes, toys, umbrellas, etc.). The entire Far East and Siberia are largely supplied with consumer and food products from China. Imports of various goods amounted to approximately $1 billion in 2017.
Structure of trade
The structure of trade between Russia and China changed significantly between 1998 and 2011. Deliveries of machinery and equipment from Russia decreased by 18 times. In Chinese exports, on the contrary, there was an increase in this item to 40% of all goods. The share of hydrocarbons in Russian exports has reached 49%, and the share of raw materials is about 70%. Since 2016, there has been a decrease in the export of ore and metals, due to the unfavorable global situation and a decrease in metallurgical production in China. At the same time, the proportion of non-ferrous metals required for high-tech production is increasing. About 20% of Chinese exports are consumer goods, 10% are chemicalproducts.
Cross-border trade
Russia has the longest border with China - 4209.3 kilometers, which creates an excellent opportunity for the development of cross-border trade. In China, entire cities have grown up along the border with Russia, with Russian streets and Russian-speaking vendors. Although Russia as a whole is not a major foreign trade partner of China, in the past 10 years, it has accounted for 40% to 50% of all China's trade of this type in border trade. In some years, the growth rate of cross-border trade was higher than the growth rate of the trade turnover between Russia and China by more than 10%, and its share in some years was up to 21%. A significant part of the trade turnover is occupied by agricultural products produced in Russia, but by Chinese companies. In the structure of Chinese imports between the border regions, equipment, vegetables, clothing, and footwear prevail. And in the opposite direction go mostly commodities, including fish, timber.
Prospects
Changing the export structure is hardly possible. In the coming years, the answer to the question: "What is the trade turnover between Russia and China?" will be unequivocal - we supply them with raw materials, and they supply us with finished products. After the construction of the Power of Siberia gas pipeline is completed, natural gas will become another item of Russian export. Some reduction in the share of raw materials supplies may occur during the implementation of interstate programs for the organization of Chinese processing industries in Russia with further export of finished products toChina.
