China, Russia eye $200 billion of trade this year during Russian PM’s visit

BEIJING: Visiting Russian Prime Minister Mikhail Mishustin attended a high level business forum in Shanghai on Tuesday, and expected that bilateral trade between China and Russia could hit the $200 billion goal by this year and cooperation will expand beyond traditional areas.

Chinese experts called this visit a “routine visit” whose purpose is to upgrade cooperation that will boost both countries’ new development demands, especially as the US-led small clique ramps up effort to encircle China’s and Russia’s growth. The visit’s aim isn’t to ask for China’s help, as some media have been hyping, the experts added.

China and Russia moving closer on economic cooperation should not be associated with the ongoing Ukraine crisis, nor should be seen as China skewing toward certain party, Chinese observers said, calling such interpretation as narrow-mindedness. They noted that China has the right to choose who to work with, as long as the collaboration does not violate international norms; and such choice won’t be disturbed by noise from any third party.

Mishustin landed late on Monday in Shanghai, where he was greeted at the airport by Moscow’s ambassador to China Igor Morgulov and Chinese Ambassador to Russia Zhang Hanhui, Reuters reported. Mishustin will pay an official visit to China from May 23 to 24.

Chinese Premier Li Qiang sent a congratulations letter on the China-Russia business forum on Tuesday, in which Li said the forum acts as an important step to implement consensus of leaders of the two countries, and that China is willing to expand trade cooperation with Russia, as well as promote the volume, quality of the bilateral cooperation.

Li stressed that China is ready to strengthen mutually beneficial cooperation with countries around the world including Russia to develop an open world economy and high-quality cooperation under the Belt and Road Initiative to inject more certainty and impetus into the global economy.

According to media reports, the Russian Prime Minister was also scheduled to visit a petrochemical research institute in Shanghai as well as hold talks with “representatives of Russian business circles.”

Closer Economic Cooperation

Chinese experts see this as a “routine visit” as Chinese and Russian high-level officials maintain frequent exchanges on trade. Mishustin’s visit mainly seeks to implement the cooperation blueprint chartered by both leaders during their meeting in March.

During the Forum, Mishustin said he expects the bilateral trade to hit $200 billion this year, Sputnik News reported. In 2022, two-way trade between China and Russia hit a record high of $190.27 billion.

China-Russia trade was up 38.7 percent in the first quarter and energy cooperation continues to be a major stabilizer for bilateral ties, according to data from General Administration of Customs.

On the one hand, under the sanctions of the West, Russia has accelerated the pace of economic transformation to the east. On the other hand, the vast market and the quick economic rebound of China also make it lucrative for the world, and Russia is no exception, Li Xin, director of the Center for Russian and Central Asia Studies at the Shanghai Institutes for International Studies, told the Global Times on Tuesday.

“The growth target is well within reach if the two countries keep the trade momentum since the beginning of 2023,” Li noted.

During the forum, Mishustin named a wide range of area for further cooperation, from energy to agriculture, finance and industry cooperation, where he seeks to expand cooperation with China, according to Russia’s Sputnik News.

Mishustin noted that energy cooperation with China remains an unconditional priority for Russia, and the supply of natural gas and coal has steadily increased. Beyond traditional energy, Russia is also preparing new projects with China in the renewable energy sector, Mishustin said.

“As China’s economy recovers there would be much demand for energy consumption. On the other it is an urgent task for Russia to expand the Chinese energy market, replacing parts of the European energy market,” Li said.

Mishustin also noted that Russia and China need to be more active in streamlining mutual access to agricultural markets and working together to strengthen food security. The Russian Prime Minister stressed that bilateral trade in agricultural products is developing at a faster pace.

Last year, trade in agricultural products increased by 42 percent to more than $7 billion.

The cooperation on agriculture is a relatively new sector and is of great significance for Russia to expand more markets from European market and China also needs diversification of its agricultural imports, Li said.

“Russian soybeans, for example, are expected to replace some of the US’ exports to China,” Li said.

In terms of financial cooperation, Mishustin said that the two countries will increase the bilateral financial cooperation through local currency settlement to strengthen economic sovereignty.

He noted that bilateral local currency settlement climbed to nearly two thirds of the total settlement in 2022, up from around 25 percent 2021.

Local currency settlement can avoid the risks of the dollar hegemony and promote the internationalization of the yuan, Li said.

In terms of industrial cooperation, Mishustin said that shipbuilding, civilian drone production and the timber industrial complex are promising areas for cooperation between Russia and China.

Defying narrow-minded interpretation

At Chinese Ministry of Foreign Affairs’ Tuesday briefing, a question was raised as whether close cooperation between China and Russia will trigger concerns and dissatisfaction from certain Western countries, who might even consider imposing sanctions on some business trading with Russia.

In response, Mao Ning, spokesperson of Chinese Foreign Ministry, said China has been conducting normal economic and trade cooperation with other countries in the world, including Russia, on the basis of equality and win-win result.

We oppose unilateral sanctions and long-arm jurisdiction that have no basis in international law or mandate from the UN Security Council, Mao said, reiterating that China-Russia cooperation does not target any third party and is not subject to disruption or coercion by any third party.

“China will take all measures necessary to protect the legitimate and lawful rights and interests of Chinese companies,” Mao said.

Other media reports associated Mishustin’s visit with the ongoing Russia-Ukraine conflict, saying the visit is a sign that the “two nations seek to further strengthen ties” despite the crisis; and that the visit demonstrated Moscow’s growing economic dependency on China.

Defying those reports, Zhang Hong, an associate research fellow at the Institute of Russian, Eastern European and Central Asian Studies of the Chinese Academy of Social Sciences, sees deepening China-Russia economic cooperation as rather an inevitable choice to cope with each other’s needs. “Russia’s ‘turn to east’ propels it to expand Chinese market, whilst China’s strong economic recovery makes the country need more energy and raw material.”

Western media has long been hyping Russian economic asphyxiation, yet such statement has serious underestimated Russian economy’s resilience, said Zhang.

While delivering the government’s annual report to the State Duma in March this year, Mishustin said the Russian economy withstood Western sanctions in 2022 and is now back on a growth trajectory; and that some international organizations predicted that the Russian economy will see positive dynamics in 2023.

Zhu Yongbiao, a professor at the Research Center for the Belt and Road of Lanzhou University, noted that Western countries’ view of China’s ties with Russia is myopic. “Consolidating economic cooperation with Russia does not signal that China skews toward Russia amid the conflict. As a big country with mature diplomatic strategy, China has its own plan to cooperate with other countries, as long as it does not violate international norms; and such plan won’t be disturbed by any noise from third party.”

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