Russia redistributes exports in favor of China

6 april 2017

In 2016, annual exports to China declined by 2% down to 28 billion US dollars, while the total Russian exports fell by 17%. This shows a redistribution of the exports in favor of China, the Analytical Center expert, Grigory Mikryukov, states.

According to the expert, the reduction in the value of exports is associated with a lower level of oil prices, as a result of which the volume of mineral fuel supplies fell by 5.6% to 17.9 billion US dollars. At the same time, in physical terms, supply has increased by 15.8% to 72 million tons, which is due to the overall increase in China's oil imports — by 13.6% to 381 million tons.

The second place in the export structure of China goes to timber, the supply of which grew in annual terms by 17% to $ 2.6 billion and by 22.4% in physical terms, Mikryukov said. More than 90% of supplies are raw timber, mostly coniferous wood.

One of the most rapidly growing directions of Russian exports to China is food supplies, which increased by 18.2% to 1.8 billion dollars in 2016. The bulk of supplies include fish, oil seeds and fruits. During the year, fish exports to China increased by 7.9% to $ 822.1 million, with frozen fish accounting for more than 90%. Oil seeds and fruits exports increased by 13.1% to 450.9 million US dollars, the expert added. Food supplies to China are likely to keep showing high growth rates, given the predicted food demand growth in China, Mr. Mikryukov believes. The media has also recently announced the conclusion of a significant number of new preliminary food supply agreements with China.

At the same time, China introduced a number of trade restrictions on Russian goods, among which are: anti-dumping measures for certain types of the chemical industry products and numerous sanitary and phytosanitary measures, for instance, the import of wheat, barley, rye and a number of other cereals, cloven-hoofed animals and their products, poultry, milk and dairy products is prohibited. In recent years, China has started to weaken some of its trade restrictions. As a result, since the end of 2015, the supplies of spring wheat grown on the territory of the Altai and Krasnoyarsk Territories, Novosibirsk and Omsk regions have been allowed, provided that the requirements for the packaging of products are met, Mr. Mikryukov said. Also at the end of 2015, permission was obtained for the exports of corn, rice and soybeans grown in the Khabarovsk, Primorsky and Transbaikal territories, Amur and Jewish Autonomous Regions, as well as the exports of soybean grown in the Siberian and Far Eastern Federal Districts. Exports of these products are permitted subject to compliance with packaging requirements and product quality.

The expert also specified that for transporting goods to China sea or road transportation is often used — up to the border with China. Railway transportation is much less common.