China’s trade with Russia won’t offset sanctions, U.S. says
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Following a videoconference call between Premier Mikhail Mishustin of Russia and China’s Premier Li Keqiang, Russia’s Deputy Prime Mins Yuri Trutnev (Russia), Tatyana Golikova (Russia), Alexander Novak (Russia), and Dmitry Chernyshenko, Dmitry Chernyshenko sign joint documents.
Dmitry Astakhov | Tass | Getty Images
BEIJING — China’s trade with Russia isn’t enough to offset the impact of U.S. and European sanctions on Moscow, according to the White House.
Within hours of Russia’s invasion of Ukraine, the U.S., U.K. and European Union announced new sanctionsThese measures were designed to exclude Moscow from the world economy. The sweeping measures did not include restrictions on purchases of Russian oil and gas — a significant driver of the local economy.
China’s Foreign Ministry in Beijing said that trade relations with Russia and Ukraine will remain normal. refused to call the attack an “invasion.” Meanwhile, the customs agency approved wheat imports from Russia.
China and Russia’s share of the global economy is far less than that of the Group of Seven countries — which includes the U.S. and Germany. This means that China cannot cover the effects of sanctions, U.S. Press Secretary Jen Psaki said to reporters in Washington late Thursday.
According to World Bank data, China was responsible for 17.3% global GDP in 2020 and Russia 1.7%, respectively.
China is Russia and Ukraine’s biggest trade partner. Both countries are part of the Belt and Road Initiative — a regional infrastructure development plan widely seen as Beijing’s effort to increase global influence.
The trade between China and Russia was a success. record highA total of $146.9 trillion in 2021. This is an increase of 35.8% over the previous year. according to China’s customs agency.China imported more Russian goods than it exported by Russia, exceeding exports by over $10 billion.
Trade must grow 37% more from the current level of exports and imports to achieve Moscow’s $200 billion goal by 2024.
According to customs data, China’s trade surplus with Ukraine increased by 29.7% to $19.31 Billion last year, also an unprecedented high. It was split pretty evenly between exports and imports.
China and Russia are strategic comprehensive partners. According to CNBC’s translation, Assistant Foreign Minister Hua Chunying stated Thursday that China and Ukraine were friendly partners.
China’s normal trade cooperation will continue, based on [China’s]Five Principles for Peaceful coexistence [for international relations]She said that this was the foundation of friendly relations with both countries. This includes energy cooperation.
Uncertain scale of economic impact
According to Chinese customs data, just under two thirds of China’s Russian imports were for energy products in 2021. According to the agency, Russia is China’s second largest source of electricity as well as its third-largest crude oil source.
Stephen Olson is a senior researcher at the Hinrich Foundation. He said that China’s lifting restrictions on Russian wheat imports clearly aims to compensate for the effects of sanctions. However, it remains to see if this will be symbolic or meaningfully impact the economy.
Olson stated that China’s ability and willingness to mitigate the effects of Western sanctions would be determined by how severe and broad the sanctions were ultimately imposed by the U.S. along with its partners. “The West hasn’t yet laid all its cards down, so it is open to the possibility of tightening them later, if needed.”
The Russian ruble plunged to record lows against the U.S. dollarThe invasion officially began on Thursday.
The West has not yet taken any measures to cut off Russia from SWIFT (the international payment network). Since January 1, the Chinese yuan was the fourth most-used currencyGlobal payments ranked up two years after being in sixth place, according to SWIFT.
China’s Hua criticised the U.S. on Thursday for its military support to Ukraine, and claimed that Russia did not require such assistance from Beijing or other countries.
The close ties between Vladimir Putin, the Russian president of Russia and Xi Jinping were strengthened by a high-profile summit in Beijing earlier in the month just before the Winter Olympics.
Officially, China’s side stated that both countries should “strengthen energy strategic partnership” and cooperate on technological and scientific innovation.
Gazprom and Rosneft, Russian oil giants, signed contracts with China National Petroleum Corporation (CNPC) to deliver natural gas and oil to China.
Tong Zhao, senior fellow with the Carnegie Endowment for International Peace nuclear policy program, said Tong Zhao that Russia will benefit as long China implements its trade relationship.
Zhao said, despite the fact that he does not have an expertise in economic matters, that China is most likely to take extra measures to support Russia.
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