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FEATURE STORY: Trade Relationship and Largest Projects Between China and Russia
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Trade Relationship and Largest Projects
Between China and Russia
By Harold Murphy

BT 201901 feature 01中俄贸易关系和最大的项目

去年2018年标志着于2001年7月签署的中俄睦邻友好合作条约17周年纪念。随着协议进入成熟阶段,中俄关系从未如此深入,能源项目、基础设施、金融和其他项目正在如火如荼得进行中。 在本文中,我们将介绍不断增长的贸易量和中俄之间的一些最大的项目,这些项目正在进行或计划在不久的将来启动。

自九十年代末中俄建立第一个正式伙伴关,20多年后,两国各级的跨国关系不断发展。 在与欧洲紧张关系日益紧张的情况下,俄罗斯越来越多地转向东方,而中国在其雄心勃勃的“一带一路”倡议中找到了可靠的合作伙伴,将中国与世界其他地区联系起来。

作为俄罗斯最大的能源进口国,西伯利亚电力管道将从俄罗斯向中国输送380亿立方米天然气,俄罗斯和中国出口商将发现,一旦阿穆尔铁路桥建成,改善贸易关系将变得极为容易。

Last year 2018 marks the 17th birthday of the Treaty on Good-Neighborliness, Friendship and Cooperation between Russia and China, signed in July 2001. With the agreement entering adult age, Chinese-Russian ties have never been deeper with ambitious projects underway in the energy, infrastructure, finance and other sectors. In this article, we’ll cover the growing trade volume and some of the largest projects between China and Russia which are either underway or scheduled to start in the near future.
 

Trade Value Between China and Russia

Chinese trade value with Russia is on a steady rise. While exports to China accounted for around 7% of the total Russian trade turnover in 2012, that number rose to around 10% in 2016. Russia even managed to increase its exports to China in times of international sanctions against Kremlin, following the annexation of Crimea. At the same time, imports from China accounted for 16% of total Russian imports in 2012 and rose to almost 21% in 2016. This marks a whopping 34% year-on-year increase in China - Russia trade flow.

BT 201901 feature 02
China-Russia Trade Exports and Imports
Ernst & Young publication, China and Russia in 2017: an intricate path of growth

These numbers confirm China’s role as the largest Russian trade partner for the last six years. In dollar-terms, trade value between the two countries reached around $70 billion in 2016 with an impressive annual increase of one third.
 

This shouldn’t come as a surprise since Russian President Vladimir Putin shifted his diplomatic focus to the east in the face of rising political and economic tensions with the Western world.
 

Energy Projects: Power of Siberia

One of the largest energy projects in the world and the largest since the fall of the Soviet Union is a 3,000km pipeline that runs from Russia’s gas fields in the far east down to the Chinese border in the south-east. Around 8,500 workers are working all-year round to finish the gas pipeline, which is expected to transport the first cubic meters of gas in late 2019. Operated by the world’s biggest gas company, Gazprom’s Power of Siberia is an ambitious energy project that will connect Russia with its largest energy importer, China. The pipeline’s cost, which creeps across the Siberian permafrost at a rate of 2 kilometres per day, is estimated around $55 billion.

BT 201901 feature 03
The Power of Siberia will transport 38 billion cubic meters of gas to China annually.


Transportation and Infrastructure Projects

Beside energy projects, there is also a large number of infrastructure projects that have been launched recently.
 

Amur Railway Bridge

The bridge over the Amur River which connects the Russian and Chinese borders is the first-ever railway bridge between the two countries. The new bridge, which is to a large part financed by the Russia-China Investment Fund, is a significant project for the Russian exporters in the far east, as it will reduce the existing transportation distance by around 700 kilometres. The Amur River Bridge, which will be long 2.2 kilometres and cost around $355 million, connects the Jewish Autonomous Region of Russia with the Chinese province of Heilongjiang.

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First-ever railroad bridge over the Amur River

Moscow-Beijing High-Speed Railway

The Moscow-Kazan High-Speed Railway is a planned high-speed railway that should connect the Russian capital Moscow and Kazan over a distance of 772 kilometres. The project is the first segment of a transnational high-speed railway connecting Moscow and Beijing over a distance of more than 7,000 kilometres. The project, which is still under consideration by Chinese and Russian governments, will be an ambitious infrastructure project operated by the Russian Railways, featuring an operating speed of up to 360 km/h. Planning works finished in late 2017, and construction of the first part of the railway was expected to begin before 2019.

BT 201901 feature 04
Moscow - Beijing High-Speed Railway

Projects in the Field of Finance

A growing number of Chinese companies in the finance sector, including insurance, financing and payment-processing companies, are opening their offices in Russia. If you want to find a renminbi clearing bank in Russia, look no further than the Industrial and Commercial Bank of China. The China Development Bank and the Export-Import Bank of China have also reached major agreements with Russian financial institutions.

BT 201901 feature 05
Renminbi clearing bank in Moscow, The Industrial and Commercial Bank of China

e-Commerce

The economic relationships between China and Russia don’t end with energy, infrastructure and finance projects. Ties in the e-commerce sectors are also deepening at a steady pace. The Chinese AliExpress has become the largest foreign e-commerce platform in Russia, with the Chinese-Russian e-commerce trade volume rising to 54% of the total cross-border e-commerce trade volume of Russia. AliExpress also opened a local branch in Russia in 2017 to accommodate for the growing number of Russian customers.
 

Conclusion

With more than 20 years passed since the establishment of the first official partnerships between China and Russia back in the late nineties, transnational relations have grown at all levels between the two states. Russia’s focus is increasingly shifting to the east amid rising tensions with Europe, and China has found a reliable partner in its ambitious Belt and Road Initiative that shall connect China with the rest of the world.
 

Being Russia’s largest energy importer, the Power of Siberia pipeline will transport 38 billion cubic meters of natural gas from Russia to China, and Russian and Chinese exporters will find it tremendously easier to improve trade relations once the Amur Railway Bridge is completed.

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