Trade driving Russia-China ties

The 75th anniversary of the establishment of Moscow-Beijing diplomatic relations is an important occasion in the two countries' history. But the close relationship between the Communist Party of Soviet Union and the Communist Party of China was formed long before the founding of the People's Republic of China in 1949.

The relationship between Russia and China has, of late, gained in strength. But Russia has been facing many challenges because of the sanctions imposed on it by the collective West due to the Russia-Ukraine conflict.

The near-negligible Western investment in Russia, however, has facilitated the further growth of Russian-Chinese trade. Beijing has widened the scale of its trade and economic cooperation with Russia, exporting huge shipments of a variety of commodities to Russia — from consumer goods, clothing and shoes to cars and sophisticated appliances and machinery — thus successfully filling the commodity niches created by the withdrawal of Western companies from Russia and the stoppage of supplies from Western markets.

Russia, on its part, has been exporting huge volumes of oil, other hydrocarbons and raw materials to China, which significantly balances the bilateral trade structure. This arrangement raised the Russian-Chinese trade volume to a record $240 billion last year. Along with commodity trade, the Chinese companies have also found an opportunity to increase their investments in Russia, with manufacturing and trading assets abandoned by Western companies being especially attractive to Chinese businesses.

Having passed through various stages of bilateral relationship, including the difficult 1960s-1980s period, the two countries have taken their relations to possibly the highest level — officially described as a comprehensive partnership and strategic interaction in the new era. In some aspects, this relationship could be described as a model one.

The leaders of Russia and China have met face to face more than three dozen times — which is perhaps unprecedented in the history of two major countries.

Equally important, the two countries have presented a united front on most of the key issues at international forums, especially at the United Nations Security Council. Russia and China are also key members of growing global and regional organizations such as BRICS, the Shanghai Cooperation Organization and the Conference on Interaction and Confidence Building Measures in Asia. Besides, Russia will make efforts to ensure its presidency of BRICS this year and the grouping's summit in Kazan, Russia, from Tuesday to Thursday help promote regional and global initiatives that both Moscow and Beijing have faith in.

The two countries play a key role in maintaining geopolitical and socioeconomic stability in Central Asian countries, and are opposed to allowing destructive Western influence in the region, not least because it could incite "color revolutions".

Russia and China promote a multipolar world, and call on the international community to ensure that the sovereignty and territorial integrity of countries are respected, and no country interferes in the internal affairs of other countries. They also call on countries to jointly fight terrorism, separatism, extremism, and cross-border crimes.

Moreover, Russia welcomes the China-proposed Belt and Road Initiative and wants to modernize its infrastructure and transit mechanism, and expects China to help integrate the Belt and Road Initiative and the Eurasian Economic Union.

Given the huge volume of Russian-Chinese trade, the task of the two countries in the near future will be to stimulate further growth, by activating the most promising growth points. In this regard e-commerce is one of the most promising areas for promoting Russian-Chinese trade.

AliExpress Russia accounts for 70 percent of the total number of cross-border e-commerce orders in Russia. The value of Russia's e-commerce market reached $50 billion in 2023. Given that the bilateral e-commerce trade turnover has increased rapidly, there is a need for harmonizing the conditions for mutual access of goods by means of tariff and non-tariff regulation.

Since customs duties are a drawback, an increase in the threshold for duty-free import of goods by Russia and China can become a new driver of growth for cross-border electronics trade. At the same time, China should promote Russian products through its e-commerce platforms.

Another potential growth point could be private cooperation projects in the field of agriculture. In fact, in the first successful case, Russian company Rusagro and Chinese supermarket chain Century Mart have already signed an agreement on direct sales of sunflower oil.

Furthermore, Russian banks need to strengthen cooperation with the Chinese banking sector to pave way for smooth payment to expedite the settlement of transactions between Russia and China. Yet the long-term task of Russia and China will be to remove all the barriers to bilateral trade, and ensure each other access to their respective market.

The author is a senior researcher at Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences.

The views don't necessarily reflect those of China Daily.

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