China-Russia Trade Slows In March

THIS BYSTANDER ALWAYS cautions against drawing too-firm conclusions from one month’s economic data. Yet, preliminary March trade data released by China’s General Administration of Customs suggests that Chinese companies have been cautious about trading with Russia since the invasion of Ukraine.

In March, China’s exports to Russia at $3.8 billion fell 7.7% year-on-year, their lowest level since May 2020, when global trade was tanked by Covid-19.

At $7.8 billion, imports from Russia rose 26.4% year-on-year, but rising commodity prices would have inflated the value of the underlying volumes. Even then, the dollar figure was below the record $8.3 billion recorded last December.

China mainly buys energy and agricultural commodities from Russia and sells it machinery, vehicles and electronic equipment. Product category breakdowns are not available with the preliminary data. We shall have to wait until later in the month for that detail.

In February, at their meeting during the Beijing Winter Olympics, President Xi Jinping and his Russian counterpart Vladimir Putin agreed to boost annual bilateral trade to $250 billion. In 2021, it was worth $147 billion.

Xi has been put in something of a quandary by his friend’s war in Ukraine, although China’s self-interest was always going to determine its economic support, overt or otherwise.

This and concern about possible risks of Western sanctions may have made Chinese firms proceed warily following the invasion of Ukraine. However, other factors could have contributed to March’s bilateral trade slowdown, most notably the Omicron surge disrupting supply chains.

April’s data may bring more clarity.

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Filed under China-Russia, Trade

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