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China holds back Russian exports more than the EU and the US

Almost 100 restrictions per year were introduced against Russia and the countries of the Eurasian Union by trade partners from China, the USA, and the EU. This follows from the monitoring of the Eurasian Commission. China, which is considered our most promising partner, restricted Russian exports more than others. Official Beijing is actually pursuing a protectionist policy, using anti-COVID measures as a cover, experts are sure. The Eurasian Economic Commission (EEC) has monitored restrictive measures applied by trading partners against Russia and other members of the Eurasian Union. Dozens of restrictions have been identified.

“In total, from January 2021 to January 2022, 88 measures were noted that are applied by the main trading partners of the EAEU, which may have a restrictive effect on our exports,” Andrey Slepnev, Minister for Trade, explained at the EEC board meeting on February 16.

The largest number of restrictions, oddly enough, was recorded by the PRC. Chinese partners have introduced 26 restrictions against Russia and the EAEU as a whole.

Whereas the European Union introduced only nine restrictions during the same period. The United States opposed trade even less - only five restrictions. Five restrictions were also introduced by Russia's partners in the BRICS association - India and Brazil. Japan, which has strained relations with the Russian Federation amid disagreements over the Kuriles, has introduced four restrictions.

Most of the restrictions are technical barriers (38%). More than a third (33%) are sanitary and phytosanitary restrictions. Quantitative import restrictions amounted to 15%, tariff restrictions - 7%, administrative measures - 6%. The minimum part of the restrictions was contained in the customs procedures - 1%.

Restrictions are set primarily for food products, the chemical industry and rubber.

As explained in the trade block of the Eurasian Commission, the number of identified measures has nothing to do with political relations between Russia and China. A large number of identified restrictive measures by China indicates that business, including Russian, is showing an increased interest in developing trade, wants to trade more actively, and is ready to discuss emerging regulatory inconsistencies.

In addition, the restrictions are related "to China's complex procedure for gaining market access for exporters from other countries."

Back to news content Vinokurov.

The second and no less significant reason for the restrictions is the pandemic and related security measures introduced by China.

"A significant part of China's restrictions were related to the 'zero tolerance for COVID-19' policy and included sanitary measurestricted the cross-border movement of goods, vehicles and personnel," Vinokurov explained.

Repeatedly during 2020-2021, the PRC has introduced additional sanitary checks at the border for coal and timber. At the beginning of December 2021, the Russian-Chinese railway border crossings Grodekovo-Suifenhe and Zabaikalsk-Manchuria were closed to receive all cargo except containerized.

“Charcoal, round timber, building materials, small-sized equipment, clothing and footwear, and some food products were banned,” says Vinokurov.

In addition, since December 2021, four out of five automobile border crossings on the Russian-Chinese border have been closed. “The traffic jam at the only operating Suifenhe checkpoint has reached a thousand trucks, and the waiting time for a freight vehicle to cross the border is several weeks,” says Vinokurov, an expert at the Eurasian Development Bank.

Similar problems arose with partners in the EAEU - at road and rail checkpoints across the Kazakh-Chinese and Kyrgyz-Chinese borders.

Among the most affected commodity groups is food, especially perishable products. Such goods were subjected to additional checks due to reports of coronavirus traces on the packaging of imported goods.

These restrictions were especially severe for pollock purchases from Russia. Before the pandemic, China bought about 700,000 tons of this fish a year from Russia. This is almost 65% of all pollock caught by Russian fishermen. Only this year, China has allowed the unloading of fish products from Russian ships, but it is not yet clear how much purchases will recover, the Fish Union explained.

“China is very serious and strict about covid. Both in relation to internal rules and in relation to external ones. But besides the real anti-covid restrictions, official Beijing, of course, uses the anti-covid theme to achieve its economic goals”,

- said the chairman of the Fish Union of Russia Alexander Panin.According to him, China is restructuring its logistics scheme from transport ships to container transportation.

The most significant number of Chinese restrictions is easily explained. This country is one of the largest trading partners of Russia and some member countries of the EAEU, recalls Alexander Daniltsev, director of the Trade Policy Institute at the National Research University Higher School of Economics. “In addition, we must admit that the level of protectionism in China is indeed higher than in other major economies. And this affects trade relations with all countries, not only with members of the EAEU,” says Daniltsev.

Significant restrictions from China are also related to the fact that Russia has recently become more active in promoting its products to the Chinese market than to the markets of the EU, and even more so the United States, adds Daniltsev.

Protectionism in trade relations has not gone anywhere either and has even intensified, experts are unanimous. “The same technical barriers, sanitary and phytosanitary measures are not always a manifestation of protectionism. Often they are objectively justified, but at the same time they can be used as a tool to restrict access to their market,” says Daniltsev from the HSE.

Formally they do not contradict

“There are quite a lot of measures from China that are direct restrictions on trade, although formally they do not necessarily contradict the rules of trade. Of course, the Chinese side is very attentive to the interests of its business. Beijing is a difficult partner. In relation to everyone, ”Daniltsev believes.

The CEO of the Chinese trade and manufacturing company JinCheng, a member of the General Council of Delovaya Rossiya, Mikhail Goryanoy, says that China is pursuing a consistent policy to limit coronavirus risks. And for this reason, it conducts additional disinfection of goods arriving from abroad. In this situation, despite the growth of restrictions, there are advantages for Russia, Goryanoy believes.

According to him, the COVID-19 confrontation is forcing China to abandon a large part of maritime logistics and use Russian logistics infrastructure for 80% of all trade with Europe.

“In my opinion, this is a very favorable position for Russian business,” says Goryanoy.

He predicts two phases in trade relations between Russia and China for the coming years. First, the growing wealth of Chinese citizens will lead to an increase in demand for imported products among the population. “In the future, there will be a short phase of an increase in almost all areas of imports and, accordingly, relaxations in local legislation,” Goryanoy says.

This will be followed by a phase of import substitution, focusing on domestic producers and, accordingly, increased protectionism and external restrictions, the expert does not exclude.

China holds back Russian exports more than the EU and the US