The Intensification of External Trade Turnover Growth Between Russia and China as a Factor of Increasing National Economic Efficiency
E.G. Ivanova,
аспирант, Дальневосточный федеральный университет (690091, Россия, г. Владивосток ул. Суханова, 8; email: Elenaivanova96@gmail.com)
K.I. Safonova,
профессор, Дальневосточный федеральный университет (690091, Россия, г. Владивосток ул. Суханова, 8; email: Elenaivanova96@gmail.com)
Аннотация. В статье рассмотрен внешнеторговый оборот России и Китая с 2003 по 2013 годы. Выявлены основные статьи импорта и экспорта между странами по результатам анализа. Описаны перспективы международных отношений России и Китая.
Abstract. This article focuses on the external trade of Russia and China from 2003 to 2013. The main import and export items of the two countries are observed. After analysis, the prospects of international economic relations between China and Russia are described.
Ключевые слова: внешнеторговый оборот, импорт, экспорт, Китай, Россия, международные экономические отношения России и Китая.
Keywords: external trade, import, export, Russia, China, international economic relations.
Maximum completed and differentiated saturation of national is only possible with beneficial exchange of commodities and money between countries. This exchange helps countries not only satisfy citizens' demand, but also use resources more efficiently, have access to their scientific and technical achievements in the production of commodities, use innovation in the restructuring of the national economy and obtain a significant source in the formation of budget's income part of countries-members of international economy [1], [2].
Economic development in any country is impossible without a connection with the world economy and without border cooperation with other governments. The geographical proximity of the Russian Federation and China, as well as close cultural-historical ties, constitutes an important base for mutually beneficial cooperation. Border territory of the two countries covers six Russian regions: the Republic of Altai, Amurskaya Territory, Zabaikalye Territory, the Jewish Autonomous Region, and Primorsky Territory; and four administrative-territorial units of the PRC (People's Republic of China): Xinjiang Uygur Autonomous Region, Inner Mongolia Autonomous Region, and the provinces of Heilongjiang and Jilin [3], [4]. The territorial closeness of China to Russia, the dynamic and effective development of the production of fast-moving consumer goods in the PRC, Russia's large and relatively unsaturated commodities market, and rational logistic schemes of cargo delivery influence both countries' priorities with regards to long-term Sino-Russian trade relations [5], [6], [7].
Currently, trade between China and Russia has a very dynamic nature [8]. The PRC is one of Russia's biggest world trade partners, with a 10.8% share in its aggregate turnover, while Russia is ninth among China's trade partners. Because of economic sanctions against Russia by the USA and Europe, and because of Russia's reciprocal protection of commodity markets against unethical competition, the accumulation of trade turnover between Russia
and China has become a vital strategy for the Russian government.
Over the past decade, trade relations between the Russian Federation and China have been developing quite rapidly, while the macrostructure of Russian-Chinese external trade turnover has been improving (annex 1). Turnover has increased by 466%, or $ 73445.44m in total. Exports and imports are also substantially increasing. During the analyzed period, exports have increased by 307%, or $ 29873m, and imports have increased by 822%, or $ 43571.8m, accordingly. Import growth rates have affected the change in structure of external trade turnover, as the export ratio has decreased from 61.7 % in 2003 to 44.4 % in 2013. Accordingly, the import ratio has increased from 38.3 % to 55.6 %. This proportion shows that Chinese industry is more oriented toward the needs of the Russian market by not only by quantity, but also commodity structure.
The commodity structure of exports from Russia to China and imports to Russia from China undergone significant changes (annex 2). Russia's primary export to China is mineral fuels, oil, and oil products, which in 2005 constituted 41.2 % of all exports to China. In 2013, due to a heightened rate of export (188%), the proportion increased to 68.2%. During this period, the realization of fuel has increased by $12328.85m. The realization of crude oil is increasing more actively. While in 2005, the proportion of crude oil as a part of total fuel exports was 31.2%, in 2013, it jumped to 48%. The second largest export item is timber and timber goods, which constitute 7% of the total amount of exports. In 2011 and 2012, timber exports underwent intensive growth ($3488.6m and $2458m, respectively). During the analyzed period, the export of timber has increased by 6%, or 103.74m, in total. The third largest Russian export is ore minerals, scum and ash (5.16 %). The growth rate of this export item was 162%, or $884.3m. The next largest item is the recovery of nonferrous metals (4.1%). While the sale of these commodities fluctuates by year, the
Экономика и предпринимательство, № 2, 2015 г.
trend is nonetheless positive; growth from 2003 to 2013 has amounted to 84.4%.
The rates of sales of chemical goods, however, are decreasing, as are those of commodity groups such as ferrous metals, pulp, cellulose, electrical machinery, power equipment, machines and pumps, electrical machines and equipment, aircraft, mineral products, paper, and cardboard. This decrease negatively affects Russia, as it demonstrates insufficient competitiveness with regards to the price and quality of domestically manufactured goods. It also bespeaks a poor knowledge of the changes that have occurred and are occurring in the Chinese market. This shift in the export-import ratio indicates a decreasingly effective trade dynamic between Russia and China. It is important to conduct much more thorough research of Chinese commodity markets order to accurately evaluate hitherto unfulfilled demand. Moreover, it is of vital importance to find and utilize domestic resources in the production of goods that may have value as exports to China.
Russia's primary import from China (annex 3) has consistently been machines and equipment (2005 - 20.1%, 2013 - 38.7%). Within the analyzed period, turnover has increased by 351%, or $9352.2m. Other significant imports are: chemical goods, which in 2013 constituted 9% of all imports; foot wear, at 6.4 %; textiles and clothing, at 6.19 %; knitted fabric, at 5.8%; ferrous metal goods, at 3.7%; and leather goods, at 2.3%. It is also important, however, to consider that the volume of certain imports, as well as the proportion of certain items, such as fur and fur goods, has decreased significantly. While proportion of this particular item was 12.6% in 2003 with a realization volume of $1664.7m, its proportion in 2013 has decreased to 2.6%, with an import volume of only $883.85m - an overall decrease of 53.1%. Similar changes can be observed in the import of leather goods.
In our opinion, these decreases can be explained by the over satisfaction of population demand and changes in fashion trends. Official sources regarding imports from China disclose a fairly inconspicuous realization of fruit (0.4% in 2013) and vegetables (0.5% in 2012). In actuality, the volume of Chinese fruit and vegetables consumed by Russian citizens is much higher. It can therefore be assumed that there are different distribution channels of production that are not officially considered as an import supply.
Even considering official data, though, the scale and range of imports to Russia are quite large. Many import goods (textile clothing, knitting, foot wear, chemical products, vegetables, etc.) may have been substituted by domestic production. These domestic commodities, however, should not yield to imports with regards to price and quality. Such a process is only feasible through the cultivation of favorable conditions for Russian producers and through effective control over organizations responsible for certification and regulation; such steps have already been taken in France, England, Germany, and China [9], [10]. As is the case in Belarus, consumers must believe that Russian domestic production is much more advanced. Russia should maintain its status as a primary trade partner with China, but must decrease its dependence on large-scale Chinese imports [11].
Despite the rapid growth rates of turnover between Russia and China, both countries' respective presidents have set a course to strengthen long-term economic cooperation on a wide range of subjects, in particular on further improvement of external trade turnover. President Putin and President Xi have set 2015 as the deadline to increase turnover to $100 bn, a figure that many experts agree is realistic [12], [13]. The most significant Chinese investment in the Russian economy is capital investment into the construction of highways and railways. The creation of joint ventures with Russian businessmen in the spheres of trade, agriculture, and industrial recycling are an attractive field of investment for Chinese businessmen [14], [15], [16]. The long-term cooperation of both countries has already had a significant impact not only on the development of border territories in Russia and China, but also on the level of satisfaction of both populations with regards to their wants and needs, on the mutual advancement of technologies for goods production, and on the amount of income as a part of the national budget. Further development of external trade turnover between Russia and China will absolutely facilitate an increase of the efficiency of both nations' economie [17], [18].
[Edited by Cameron Ruscitti]
References:
1. James Bellacqua, 2010. The Future
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