Russia’s main trading partners, the European Union, and Britain have imposed sanctions on Moscow since the attack on Ukraine.
In that case, can China help Russia economically?
Will sanctions on Russia affect trade?
China has said it will resume normal trade with Russia.
But after the expulsion of a few Russian banks from the global banking system Swift, which allows global payments to be made, it is being speculated that it will no longer be easy for Moscow to make payments for its exports.
That is why China withdrew from some of the recent deals with Russia because traders had difficulty arranging payments.
In recent years, both China and Russia have been trying to come up with an alternative payment system to reduce their reliance on Western systems such as Swift, which bargain in dollars.
Russia has developed a system called the System for Transfer of Financial Messages (STFM), while China also has a cross-border interbank payment system (CIPS). But so far these systems are only used in their respective currencies domestically.
A study by the Carnegie Moscow Center claims that these systems from China and Russia cannot be a substitute for the Swift system.
By 2021, only one Chinese bank has joined STFM, while many Russian and international banks have joined China’s CIPS system.
China’s currency, the yuan, is currently used for 17% of bilateral trade between Russia and China, an increase of 3.1% over 2014, according to media reports based on official Russian data.
Most of the energy trade between the two countries is still in US dollars, although the use of the Chinese yuan is slowly increasing in this area as well.
What is the volume of trade between Russia and China?
The volume of bilateral trade between Russia and China has been steadily increasing in recent years.
Last year, the volume reached US 14 147 billion, an increase of 36% over 2020 and a new record. In 2021, 18% of Russia’s total world trade was with China.
When Russian President Putin visited China last month, the two countries said bilateral trade would increase to ÚˆÚ¾ 250 billion by 2024.
It should be noted that China is Russia’s largest consumer of energy exports such as oil, gas, coal, and agricultural commodities, and it is clear that in recent years Russia’s exports to China have multiplied many times over. What’s up?
Nevertheless, the EU is the largest bloc trading with Russia as a whole. In 2021, Russia’s trade volume with the EU was twice that of China.
Dr. Rebecca Harding, a financial expert, says the current situation could change dramatically.
I think it is inevitable that the current sanctions will reduce trade between Russia and Europe. The crisis has reinforced Europe’s perception that it must consider other means for its own needs.
Bilateral trade between Russia and the United States is very small.
Can China buy more gas from Russia?
Russia’s economy is largely dependent on oil and gas exports, which have not yet been subject to Western economic sanctions.
According to media reports, last year Russia was the second-largest supplier of oil to China and the third-largest supplier of gas, with imports estimated at 41.1 billion and 4.3 billion.
Russian President Vladimir Putin has also unveiled new oil and gas deals with China worth about 7 117 billion.
Russia’s highest energy consumption is still in Europe, with Moscow meeting 40 percent of its gas and 26 percent of its oil needs.
According to the International Energy Agency’s 2021 figures, on the other hand, only 20% of Russia’s oil exports go to China, while the bulk is used by Europe.
According to Dr. Harding, Russia’s oil and gas exports to China have been growing at an annual rate of 9% for the past five years. It’s a big increase of this of course, but Russia’s oil consumption is still more than higher in Europe than in China.
Russia, Russia’s natural gas supplier, has recently announced that it will suspend plans for a new gas pipeline, dubbed the Nord Stream Two, in response to an attack on Ukraine.
According to an analyst, a new agreement between Russia and China will build a gas pipeline called the Power of Siberia II, but its capacity will be less than a quarter of that of the Nord to Stream pipeline.
It is not found at this time what he will do after leaving the post.
China is also the largest buyer of coal from Russia, and a new کا 20 billion deal was signed between the two countries a week ago.
Sooner or later China will want to increase gas imports from Russia in order to eliminate its heavy dependence on coal and reduce greenhouse gases.
Russia is the world’s largest supplier of wheat, but China has restricted imports from certain parts of Russia due to the threat of disease.
But on the same day that Russia invaded Ukraine, Chinese customs officials announced that all restrictions on Russia’s imports of wheat and corn were being lifted.
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