October 5, 2022

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Index – Economy – China may rush to comfort Putin after sanctions

The United States and the European Union in turn Enforce its barriers Against Russia. Moscow has been preparing for this for some time: on February 4, 2022, just before the Beijing Winter Olympics. Met Chinese President Xi Jinping and Russian President Vladimir Putin have agreed to forge closer economic ties. The parties also raised the issue of abandoning dollar-based trade between themselves.

Sino-Russian relations have been tumultuous in the past: in 2014, after Russia unilaterally annexed Crimea, sanctions were imposed on the Russians by Western powers. As a result, their economies have continued to move towards China ever since, with Beijing eventually becoming Moscow’s largest export destination.

The new sanctions will encourage Russia to seek to deepen its trade ties with Beijing, which could mitigate the effects of the sanctions imposed on it.

“In the case of sanctions, especially if an oil-producing country like Russia is affected, violating the system is a problem,” he said. To Reuters Harry Bradman, an expert at the World Bank in China and Russia. He then continued:

It can be said that China buys oil in the open market, and if it is Russian oil, so be it.

Under an enforcement order signed by US President Joe Biden on Monday, any company in the Russian financial services sector could face further penalties. Washington said in a statement that Russia handles more than eighty percent of its daily foreign exchange transactions and half of its trade in dollars.

When Biden announced the first sanctions on Tuesday, he said the measures would “take strong measures to ensure that the Russian economy does not suffer.”

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But this is easier said than done.

Russia is one of the world’s largest exporters of oil, natural gas, copper, aluminum, palladium and other important raw materials. Oil prices on Tuesday They have reached an all-time high since 2014.

The According to World Bank data Russia accounted for 2.8 percent of world trade in 2013 and 1.9 percent of global trade in 2020. Its 2020 GDP ranks 11th globally between Brazil and South Korea. According to the World Bank’s World International Trade Solution database, Russia’s trade dependence has been steadily declining over the past twenty years.

At the same time, Moscow’s export destinations have changed: a decade ago, the Netherlands was number one, and now it is China. German and British purchases in Russia remained broadly stable, while imports from Belarus increased.

China is Russia’s number one supplier: two main types: mobile phones, computers, telecommunications, toys, textiles, clothing and electronic components.

Beijing’s share of Russian imports has been steadily growing since 2014. Taking these trends into account, we can conclude that sanctions will certainly further enhance the economic relationship between the two countries. The Russian economy is expected to continue to turn to China.

(Cover: Alexei Trujinin / AFP)