The Russian government announced that the Russian economy is expected to grow by 5.5% in the third quarter of 2023 compared to the same period last year, with full-year growth expected to be 3.5%.
The European Commission also revised its forecast upward from its previous forecast of a 0.9% contraction to a 2% increase. The European Union expects Russia’s economy to expand by 1.6% this year and in 2025.
‘Decent level’: Putin praises China trade as $200 billion target dashed
‘Decent level’: Putin praises China trade as $200 billion target dashed
According to the data, China, India and the European Union (EU) are the largest buyers of Russian crude oil, while the EU also leads purchases of Russian liquefied natural gas (LNG), followed by China and Japan.
But despite the expected rise in economic growth, headwinds are expected to persist, with central bank governor Elvira Nabiullina warning that Russia must brace for further sanctions from Western countries.
Russia also continues to face capital outflows, high inflation, and a shrinking workforce.
And despite the many differences between the two economies, Russia’s economic performance since the start of the war may still be instructive for China, which has strengthened its position in economic and technological competition with the United States. do not have.
If China has anything to gain, it’s the need to keep major companies and key parts of their supply chains within China.
China is also trying to strike a balance between promoting independence and increasing integration with global markets.
Oleg Deripaska, a former Russian billionaire and founder of the aluminum producer Rusal, said in an interview with China’s Phoenix Weekly magazine in early December that Russia’s experience has encouraged China to diversify its trade and improve its domestic economy. He said it could serve as a reminder to be more vigilant. against possible sanctions.
And according to Liu, Chinese manufacturers should try to expand the domestic market outside of semiconductors and other high-end technologies as soon as possible, but that will take a considerable amount of time.
“If China has anything to gain, it’s the need to keep powerful companies and key parts of their supply chains within China in the worst-case scenario of a major power struggle, such as war,” he said. That means there is.”
03:42
Ukraine says Russian airstrike kills more than 50 people in worst attack of war
Ukraine says Russian airstrike kills more than 50 people in worst attack of war
Avoiding potential sanctions can only be achieved if there is scope for trade volumes from new markets and industries and support from resource-rich partners, which Liu and other Russian insiders This is a lesson many of us are seeing in Russia.
Russia is rich in resources such as oil, natural gas, coal, metals, and wood, and is a major supplier of crops and fertilizers, but it is heavily dependent on imports for everything from manufacturing equipment to consumer goods.
China is also highly dependent on foreign sources for resources and energy to drive economic growth, but geopolitical complexities and Western-led global supplies as part of efforts to reduce over-reliance on Chinese markets Facing increasing challenges posed by chain restructuring.
While the Chinese government has long sought to diversify its energy and resource imports, it has also sought to expand domestic exploration and mining of precious metals and marine resources, and increase self-reliance through a transition to green energy.
China and Russia strengthen “unrestricted” partnership, pledge to cooperate in AI field
China and Russia strengthen “unrestricted” partnership, pledge to cooperate in AI field
It will also strengthen its security efforts on nearly every economic front and remain vigilant against the growing risks posed by disruptions in global markets, geopolitical complexities, and in particular the escalation of U.S.-led regulatory and containment efforts. ing.
As a key pillar of its dual circulation strategy, China aims to expand the potential of its strong and large domestic market, supported by a rapidly growing middle class of at least 400 million people.
This strategy focuses more on domestic markets and reduces reliance on export-oriented development strategies, but does not completely abandon them.
China also aims to further integrate into global markets, with particular emphasis on rules, industrial standards, and high-value-added areas.
Russia still faces challenges in building and improving its own production capacity and technology
On the banking and financial front, Russia was able to weather the storm caused by Western sanctions and become more self-sufficient.
Anna Kyrieva, associate professor of Asian and African studies at the Moscow State Institute of International Relations, said Russia has succeeded in diversifying its economic ties and finding alternatives not only for exports but also for imports.
This diversification is “likely to continue, at least in the medium term, and likely to continue in the long term,” Kiriba said.
“However, Russia still needs to build and improve its own production capacity and technology under the framework of import substitution policy, as well as develop new infrastructure to expand export capacity to avoid infrastructure bottlenecks in the Far East. “We are facing challenges such as building,” she said. she said.
01:28
Putin says relations with China have reached “unprecedented level”
Putin says relations with China have reached “unprecedented level”
Kiriba said China needs to explore indigenous technology, reduce dependence on technology transfers from Western countries and expand the use of the Chinese yuan in global payment networks.
Amid their respective tensions with the US-led West, trade between China and Russia under the so-called open-ended partnership has soared since the Ukraine war began.
During the same period, China’s exports to its northern neighbor increased by 51%, but shipments to other trading partners declined, including a 13.8% decline to the United States and an 11% decline to the EU.
China and Russia forge stronger ‘fiscal trajectory’ with new deal and state visit
China and Russia forge stronger ‘fiscal trajectory’ with new deal and state visit
If this momentum continues, trade between Russia and China is expected to reach a record $240 billion in 2023.
“It’s very impressive,” said Gong Zhiong, a professor at Beijing’s University of Foreign Business and Economics.
Gong added that Russia is rapidly catching up with South Korea and Japan in terms of trade with China and could surpass the two leading Asian countries “within a year or two.”
To deal with the impact of the next round of sanctions, the Russian Ministry of Finance announced in mid-December that it would eliminate tariffs on oil exports from early January, and at the same time lower tariffs on LNG exports.
But Gon said it remains to be seen whether Russia can maintain economic growth in the long term.
He added that China’s economy has become highly integrated into the global economic system, and the Chinese government should properly manage its relationships with major trading partners.
Gong said it is important to avoid decoupling, remain neutral in international affairs, and maintain friendly relations with resource-rich countries while striving to strengthen economic ties with Western countries.
“Both markets are important,” he said. “Equally important, we need to be self-reliant and continue to diversify our suppliers.”
While China still adheres to its openness to the outside world, let’s not exaggerate the situation in Russia.
Economists and policy advisers also said that unwavering openness remains important and central to China’s strategic goal of becoming a medium-developed country.
“China still adheres to its openness to the outside world, but let’s not exaggerate the situation in Russia,” said Zheng Yongnian, a prominent political scientist at the Chinese University of Hong Kong in Shenzhen.
“Russia’s self-sufficiency in energy, military and food is an essential advantage, but China is difficult in this respect.”
Moreover, China, unlike Russia, is a highly market-oriented country, he added.
Canberra ‘not opposed’ to China’s CPTPP trade deal bid
Canberra ‘not opposed’ to China’s CPTPP trade deal bid
“Those who are not open-minded will only fall behind in the long run,” Chung said.
The Chinese government also aims to strengthen global cooperation in technology and innovation and attract more international experts.
Alexei Chigadaev, a former visiting lecturer in comparative area studies at Moscow’s Higher School of Economics, said China also needs to be prepared to deal with unexpected risks.
You are on your own.Is it a hit or miss?
“The Chinese economy needs to control economic shocks, such as the bankruptcy of large companies and the subsequent legal procedures, and the closure of inefficient banks,” Chigadaev said.
“This could signal that in a complex geopolitical moment, governments cannot afford to solve problems manually and businesses need to find solutions on their own.
“You’re on your own. Hit or miss. China enjoys a friendlier regime than Russia and has a more developed transport and financial infrastructure, making sanctions less effective.”
He added that while Russia relies primarily on oil and mineral resources, China boasts a vast array of goods that influence global markets, including the US and the EU.
“Sanctions against Russia are hurting ordinary consumers in the EU due to rising fuel costs. But sanctions against China are a frontal attack,” Chigadaev said.
Additional reporting by Mia Nulimaimaiti