Russian Prime Minister Mikhail Mishustin travelled to Beijing for a Sino-Russian business forum to boost rapidly developing economic ties on May 24.

The Sino-Russian business forum is a “good platform to strengthen co-operation between Russia and China,” Prime Minister of China Li Qiang told the forum participants during the plenary session.

"China is ready to further expansion of economic and trade exchanges with Russia and co-operation development, both in terms of quality and quantity. This forum provides a good platform to business communities of the two countries to strengthen exchanges and co-operation," the Chinese prime minister said, cited by the China Central Television.

Mishustin arrived with a large delegation that included a number of Russian tycoons subject to Western sanctions, including from the key fertiliser, steel and mining sectors. Russian exports of oil, gas and raw materials to China have soared since sanctions were imposed over a year ago.

Amongst the delegation were vice-premiers Dmitry Grigorenko, Dmitry Chernyshenko and Denis Manturov, several ministers, including the head of the Ministry of Transport, Vitaly Savelyev, and the head of the Ministry of Agriculture, Dmitry Patrushev. Amongst the businessmen were the owners or heads of the largest enterprises: Alexei Mordashov (Severstal), Andrey Guryev (Phosagro), German Gref (Sberbank), Andrey Kostin (VTB), Igor Shuvalov (VEB) and others.

However, in a sign of the lopsided nature of Russia’s relations with China and the threat of sanctions, the Chinese delegation was thin. There were no top government officials and no big-hitting Chinese businessmen in the corresponding Chinese delegation.

“The Chinese are warmly welcomed, but they are very afraid of sanctions. Even those big businessmen who wanted and were ready to speak publicly were not allowed to the meeting by the official authorities – they do not want to take even the smallest risk. No offence – their position is clear,” one of the forum participants told Vedomosti.

Deputy Prime Minister Alexander Novak, who was part of the delegation, said Russian energy supplies to China would increase by 40% year on year in 2023, Russian state media reported. China has begun to import record amounts of Russian crude oil since Europe imposed restrictions on the import of Russian oil.

The Russian prime minister is scheduled to hold talks with Chinese President Xi Jinping and his counterpart Li to discuss boosting trade and economic ties, with special attention on industry, energy, transport industry and agriculture.

“Amid today’s global economic recovery we are facing numerous challenges, as uncertainty and instability are mounting. China is committed to high-quality development and top-level openness. We are ready to strengthen our mutually beneficial co-operation with all countries, including Russia,” Li said.

Beijing and Moscow have been drawn together by rising tensions in recent years as both countries have come under increasing pressure from the US. Those tensions erupted into war 15 months ago when Russia marched into Ukraine. Since then China has given Moscow limited support as Beijing tries to avoid bringing down sanctions on itself, but broadly backs President Vladimir Putin’s call for a “multi-polar” world. The relationship went to a new level after Xi went Moscow in March to show solidarity with Putin. Some analysts took that meeting as an act of open defiance by Beijing and an explicit challenge to the US’ claim to be the global leader.

The unintended consequence of the extreme sanctions regime imposed by the West on Russia has been to unsettle the Global South, which is now being drawn into the BRICS bloc led by China and Russia. A key element of that is to de-dollarise international trade, with the yuan as the leading contender to replace the dollar.

 

Sino-Russian trade soaring

Russia has become China's seventh partner in terms of trade turnover in the first quarter of 2023, according to Mishustin.

"China has been Russia’s biggest trade partner for 13 consecutive years, with the scale of mutual investment surging," Li added.

Speaking at a plenary meeting of the Russian-Chinese business forum in Shanghai, Mishustin highlighted the significant growth in bilateral trade between the two countries.

"China has been Russia's main trading partner for more than ten years. And in the first three months of this year, our positions in a similar Chinese list have also changed – they have risen from tenth to seventh place," Mishustin said.

The volume of mutual trade between Russia and China has been steadily increasing, with a growth rate of about a third annually in 2021-2022.

In 2022, the trade turnover reached approximately $190bn, and the momentum has continued into 2023. Mishustin reported that the turnover in the first quarter of 2023 had risen by almost a quarter, reaching $52bn.

Work is also underway to expand mutual access to agricultural markets. "Last year, agricultural trade increased 42% to $7bn. In the first quarter of this year, exports to the Chinese market grew by another 91% (from last year) to $2.4bn," the Economics Ministry said ahead of Mishustin's trip to China.

“I am sure that this year we will fulfil the task set by the heads of state, Vladimir Vladimirovich Putin and Xi Jinping, to bring mutual trade to $200bn,” Mishustin stressed.

China's foreign trade turnover in 2022 amounted to $6.31 trillion, with the United States as its main partner with a trade volume of $759bn. Following the US, South Korea, Japan, Taiwan, and Hong Kong are China's other major trading partners, with turnovers exceeding $300bn with each country.

However, the improvement of logistics infrastructure remains a key challenge that Russia and China need to address. Chinese Premier Li Qiang emphasised the importance of enhancing logistics infrastructure during the plenary meeting.

Mishustin also noted this problem. “Russia and China share a long land border. And its infrastructure needs to be improved,” the prime minister said. To do this, according to him, it will be necessary to increase the capacity of transport arteries, modernise checkpoints, expand air traffic and unlock the potential of the Northern Sea Route as the shortest route from Asia to Europe.

As Russia and China aim to strengthen their economic partnership and overcome logistical challenges, further investments in infrastructure and collaborative efforts will be crucial to sustain and enhance the bilateral trade between the two nations.

The Russian Ministry of Economic Development and the Ministry of Commerce of China signed a memorandum on deepening co-operation in the services trade sphere, the press service of the Russian ministry said the same day, Tass reports.

As a result of negotiations between Russia and China, five documents were signed in the field of trade, medicine, sports and intellectual property, according to a Russian government statement.

The memorandum on deepening investment co-operation in the sphere of trade in services was signed by the Ministry of Economic Development of the Russian Federation and the Ministry of Commerce of the People's Republic of China.

Russia’s agricultural organ Rosselkhoznadzor and the Main Customs Administration secured the agreements with protocols on phytosanitary requirements for grain and plant materials exported from Russia for the medical region of China.

The prime ministers of Russia and China will hold another meeting at the end of this year to compare notes and "synchronise their watches,"  Mishustin said during a meeting with Chinese President Xi.

"We have agreed to activate the logistical work and mechanisms for holding regular meetings of the heads of government of Russia and China. It encompasses five intergovernmental commissions at the deputy prime ministerial level and more than 80 sector-specific working groups. We will compare notes at the next regular meeting of prime ministers, which will take place at the end of this year," Mishustin said as reported by Tass.

Separately, Chinese Foreign Minister Qin Gang said that more and more voices are calling for a ceasefire in Ukraine, during a meeting with his Dutch counterpart a day earlier.

"At present, more and more peaceful and rational voices speaking in favour of a ceasefire and an end to hostilities [in Ukraine] can be heard," the Chinese Foreign Ministry quoted Qin as saying.