Bilateral trade between Russia and China increased by around 4.5% in the first eight months of 2019, reaching $70 billion, with exports to China almost entirely responsible for the surge in activity, Brink News writes.
Five years after Western sanctions came into force, changing Russia’s economy, the continued strength of Russia-China relations is surprising for some analysts. What’s more, the union shows no signs of weakening given the extra impetus offered by the China-led Belt and Road Initiative, the report says.
China already held the position as Russia’s largest trade partner for nine consecutive years, but trade volumes between the two countries are now growing at an unprecedented rate. 2018 was a record year: bilateral trade rose by more than a quarter, exceeding $100 billion for the first time. Russia’s Prime Minister Dmitry Medvedev has announced lofty ambitions of doubling Russia’s trade with China by 2024 via greater cooperation in key economic areas, including energy, high-tech and agriculture.
Though Russia turning eastward following the 2014 sanctions was a predictable move, the fruits of this cooperation have been met with surprise, Brink News writes. Indeed, doubts remained over whether China could replace the quality and service that the “Made in Germany” label (and its equivalents) guaranteed for Russian counterparts.
But it wasn’t long before China-based manufacturers were gaining an increased share of Russia’s trade — largely to the detriment of Western producers.
Russia-China trade relations will bear new fruit in the coming years, thanks to the BRI. Moscow has already earmarked some $100 billion of its currency reserves for large-scale infrastructure projects, including airports, bridges, ports, and rail and road networks through to 2024. Around 10% of this infrastructure spend — the largest in Russia’s history — will serve to further facilitate trade through the East-West corridor.
