Page 71 - bne monthly magazine June 2024 Russian Despair Index

bne June 2024
Opinion 71
received widespread attention in Europe recently. Recently, the EU, like the United States, has not set special import duties on Chinese products, although the debate on the matter is lively. The EU has placed under the competition investigation e.g. Chinese medical devices, wind turbines, solar panels, and electric cars, with the results influencing potential trade policy decisions.
Disagreements and a challenging business environment can also be seen concretely in business life. According to a report published by the EU Chamber of Commerce in China on May 10, the confidence of European companies doing business in China continues to weaken. According to the report, China's structural problems – such as weak domestic demand, industrial overcapacity, and a downturn in the construction sector –
as well as market access and regulatory barriers make it difficult for European companies to operate in China.
According to the statistics of the Chinese customs, trade in
goods between China and the EU has decreased by 6% in the first four months of this year compared to the previous year. Last year, the value of bilateral trade decreased by 7%. The background for this was especially the reduced exports from the EU to China (-10%), as imports from China only decreased by 1%. The value of China's exports to the EU was $504bn in 2023, while the value of imports was $283bn. Thus, China had a trade surplus with the EU of 221bn dollars last year.
China is a very important export market for the EU, as it bought 9% of the EU countries' total exports outside the Union in 2023. Similarly, the EU is China's most important export market alongside the United States, as both buy
about 15% of China's total exports. The EU exports to China e.g. motor vehicles and their parts, medicines, as well as electronic equipment and their parts and imports from China, for example, telecommunications equipment, information technology and various electrical equipment.
Putin visits China; US sanctions also make trade between China and Russia more difficult
Bank of Finland Institute for Economies in Transition (BOFIT)
Russian President Vladimir Putin travelled May 16 on a state visit to China to meet President Xi Jinping. In addition to Beijing, the destination is Harbin in northeastern China. The political relations between the countries have become closer after the war of aggression against Russia, says the Bank of Finland institute for Emerging Economies (BOFIT) in its weekly update.
The last time Putin visited China was at the forum of the Belt and Road project in October. According to Russia, the meeting will discuss cooperation in areas of innovation, such as high technology, space technology and renewable energy. The information about the meeting did not mention the Power
of Siberia 2 gas pipeline. The pipeline agreement, which has been in discussions for a long time, would be important for Russia. According to the Russian gas company Gazprom's plans, the pipeline would be in use in 2030, although an agreement with China has not yet been reached.
The growth of trade between the countries has waned. According to Chinese customs data, the value of goods exports to Russia decreased by 3% in January-April from a year ago. The value of imports increased by 11%. In particular, the export of vehicles to Russia has decreased. This can be partly explained by the boom at the end of last year, when Russians bought Chinese cars before Russia stopped at the beginning of April
the possibility of reimporting cars to the country through the Eurasian Economic Union with lower taxes.
The increase in imports is mainly due to crude oil imports, which grew in January-March in terms of volume by 13% (China's total oil imports +1%) and in dollars by 20% y/y. Imports of oil products and natural gas from Russia also increased at the beginning of the year. Coal imports, on the other hand, decreased. Russia is China's most important oil importing country with a 20% share. According to customs data, a ton of oil imported from Russia cost 3% less than
Russian President Putin travelled to China to meet President Xi Jinping in a display of their tightening relations, despite the Western sanctions / bne IntelliNews
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