Russia has repeatedly pledged to expand
trade with China, the Kremlin apparently
continuing to view commercial ties as an important
indicator of what is officially described as a
"bilateral strategic partnership".
increasing bilateral trade reflects a successful
development of Russian-Chinese economic
cooperation, said Valentina Matviyenko, head of
the Federation Council, the upper house of
the Russian parliament.
Russia and China share a goal of further
increasing bilateral trade up to US$100 billion in
2015 and $200 billion in 2020, she told China's
official news agency Xinhua, which reported the
comments on March 14.
Russian official pronouncements happened to be
based on reality. Last year, bilateral trade
between Russia and China was up significantly. In
2011, Russia's trade with China reached $79.25
billion or up 42.7% year-on-year, according to the
Chinese and Russian customs statistics.
the meantime, Russia apparently continued to rely
on commodities in its export policies towards
China. Russia has kept supplying China with energy
resources and raw materials in exchange for
shipments of Chinese industrial products.
Russian exports to China were up 56%
year-on-year, but the increase was mainly due to
the recent strength in global commodity prices,
Russia's trade representative in Beijing, Sergei
Tsyplakov, said. In 2011, Russian oil deliveries
to China totaled 19.7 millions tons or a 29.4%
increase year-on-year in terms of volume, but up
87.3% year-on-year in terms of value, according to
Tsyplakov. Timber exports to China were marginally
down at 13 millions tons in terms of volume, but
up 16% year-on-year in terms of value, he said.
Russian officials voiced tentative
expectations of further increases in trade with
China. Tsyplakov estimated that bilateral commerce
could reach about $90 billion in 2012.
However, Chinese businesses apparently
remain disinterested in any sort of long-term
arrangements with Russian companies. Tsyplakov
conceded that investment cooperation between
Russia and China amounted to a fraction of
In 2011, Chinese
investment in Russia amounted to a mere $300
million, or down 49% year-on-year, according to
Chinese statistics. The number represented just
0.5% of China's total foreign investment in 2011.
In order to increase bilateral trade and
investment ties, Tsyplakov urged the development
of transportation infrastructure, notably
upgrading the existing Zabaikalsk and Grodekovo
major border crossing points. He conceded that the
agreement to build the Nizhneleninskoe-Tongjiang
bridge across the Amur River, concluded back in
2007, was slow to materialize.
has long nurtured ambitious plans of increasing
trade with China. In January 2006, then Russian
president Vladimir Putin announced plans to raise
bilateral trade up to $60-80 billion/year by 2010.
Initially, both countries appeared to move
fast toward achieving that goal. In 2006,
bilateral trade amounted to about $33 billion or
an increase of some 15 percent. Russia's trade
turnover with China exceeded $29 billion in 2005,
up by 37% over 2004. In 2007, Russia's trade with
China reached $48 billion or up 44% year-on-year.
Then came another increase in bilateral
commerce. In 2008, Russia's trade with China
reached nearly $57 billion or up 18% year-on-year.
As a result, China emerged as Russia's
third-largest foreign trade partner, while Russia
became China's eighth-largest trade partner.
However, in 2009 - amid the global financial
turmoil - bilateral commerce fell to under $40
billion, or well below the level of 2007.
The global economic revival, notably the
recovery in the international commodity prices,
proved instrumental in revitalizing bilateral
commerce. In 2010, Russia's trade with China
exceeded $59 billion or up some 50% year-on-year.
As Russia moves toward full membership in
the World Trade Organization (WTO), officials are
voicing concerns that the country's entry in the
global trading body could have adverse economic
effects.  Tsyplakov conceded that some of the
Russian industrial sectors could prove unable to
face Chinese competition.
pledged to capitalize on new opportunities in
connection with Russia's WTO accession. On
February 22, the authorities of China's northeast
Heilongjiang province released plans to increase
commerce with Russia up to $20.5 billion in 2012,
or up from $19 billion last year. This year,
Heilongjiang would aim to benefit from Russia's
upcoming WTO entry, the authorities said.
Therefore, apart from immediate
money-making opportunities, the increasing
bilateral trade may entail some new economic
challenges for Russia after its WTO accession.
While selling crude oil and timber to China is
likely to continue bringing some quick cash to the
Russian state and private coffers, increasing
industrial imports from China on WTO terms may
deal some sensitive blows to Russian industries.
Note 1. Russia formally
joined the World Trade Organization last December.