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Growth opportunities

Developing economic and trade cooperation is helping to consolidate good-neighborly relations between China and Russia

By LU NANQUAN | China Daily Global | Updated: 2021-06-15 08:31
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JIN DING/CHINA DAILY

Economic and trade cooperation between China and Russia have been on the rise in the past 20 years since the signing of the Treaty of Good-Neighborliness and Friendly Cooperation, aside from 2009 and 2015 when the trade volume declined compared with the previous year.

China has been Russia's biggest trade partner since 2010. In May 2014, the two countries set the aim of increasing bilateral trade to $100 billion in 2015. This was not materialized, however, due to the sanctions imposed on Russia by the West and falling oil prices in the international market. In 2018, bilateral trade reached $107.06 billion, exceeding the $100 billion target for the first time, which was of enormous significance to both sides, as it marked a great stride forward for bilateral trade relations and was a long-anticipated result for both countries.

Since 2018, China and Russia have seen more and higher-quality trade with a better structure and new growth areas. China imported $3.21 billion of agricultural products from Russia, an increase of 51.3 percent over 2017. The two sides also made progress in e-commerce, trade in services and other fields, some major strategic projects on energy, aerospace and infrastructure, and in emerging fields such as Arctic development and the digital economy.

The strengthening economic and trade cooperation between China and Russia over the past 20 years, apart from the important factor of greatly enhanced political relations, is attributable to the following two factors when put in the context of the strategic policy of regional cooperation.

Russia plays an important role in promoting China-EU economic and trade cooperation under the framework of the Belt and Road Initiative. Russia is thus of great significance in the interconnectivity between Europe and Asia. In addition, the design for the Belt and Road comprises six major economic corridors, two of which involve Russia, namely the New Eurasian Continental Bridge Economic Corridor and the China-Mongolia-Russia Economic Corridor.

Russia's increasing focus on the Asia-Pacific is conducive to China-Russia regional cooperation. In his speech on Nov 10, 2014, at the Asia-Pacific Economic Cooperation CEO Summit, Russian President Vladimir Putin said that strengthening cooperation with the Asia-Pacific region is one of Russia's strategic priorities and China is Russia's key partner in the region. Russia has adopted a series of policies to accelerate the development and opening-up of its Far East in preparation for greater cooperation with the Asia-Pacific region, and it is seeking to build the Far East into Russia's center of influence in the Asia-Pacific region. It is an important component of President Putin's strategic vision to develop the entire eastern region of Russia.

Although Russia wants to expedite the development of its eastern region, it lacks capital, technology and labor. It therefore needs to strengthen its international cooperation. China and Russia have already established two regional cooperation mechanisms, namely the Yangtze-Volga and Northeast China-Far East Mechanism, and forged 140 pairs of sister cities/provinces. There is a good foundation for more economic and trade cooperation between Northeast China and Russia's Far East. With joint efforts, China has been enhancing its cooperation with Russia's Far East. China and Russia's Far East Federal District saw more than $7.7 billion in trade in 2017. China has become the largest trade partner and the largest source of foreign direct investment in Russia's Far East.

There are bright prospects for rapid development of trade between the two countries and much potential is there to be tapped.

The author is an honorary member of the Chinese Academy of Social Sciences. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

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