Why are China and Russia working to deepen their ties?


As trade relations between Beijing and Moscow deepen, Russia has begun construction of one of the world’s largest polymer factories, an investment of $ 11 billion intended for the Chinese market. The massive project, which began on Aug. 18 and will produce plastic components and improve trade between China and Russia, is the latest sign of the two countries’ growing economic and political ties as they create economic and political cooperation. after decades of hostility. The project, under construction in Amur, in the Russian Far East, near the Chinese border, is being carried out by the Russian petrochemical company Sibur Holding in collaboration with the large Chinese group Sinopec, which will hold 40% of the capital. It should start manufacturing in 2024.

From large gas projects in the Russian Arctic to growing high-tech partnerships and collaboration to reduce their dependence on the US dollar, Beijing and Moscow are finding more opportunities for cooperation.

The plant, which is one of the largest investment projects in Russia, is part of a growing trend of new initiatives between Beijing and Moscow that has seen ties deepen and evolve amid the double pressure of the coronavirus pandemic and the escalating economic and political conflict between the United States and China.

In December, Russia began sending natural gas to China via the 2,900-kilometer Power Of Siberia pipeline, and President Vladimir Putin announced in March his intention to start work on a second pipeline, Power Of Siberia 2.

“On almost all fronts, Russia and China have come together,” Artyom Lukin, a specialist in Sino-Russian relations at the Federal University of the Far East in Vladivostok, told RFE / RL. “We see the long-term trend of China’s growing economic importance to Russia.” But as the pandemic has made China an even more vital economic life and market for Russia, Moscow has become a more needed partner for Beijing as it clashes with the administration of US President Donald Trump on a wide scale. range of issues: from a trade war to issues involving Hong Kong and South China Sea rights.

And while China-Russia trade fell in the first five months of the year due to the global economic slowdown, bilateral trade soared in 2019 to a record high of over $ 110 billion. The two countries also announced new scientific cooperation to test COVID-19 vaccines.

This new dynamic proposes a turnaround in the forces that brought Beijing and Moscow closer together following the annexation of Crimea by the Kremlin in 2014, where Russia was placed in the crosshairs of Western sanctions. An official ceremony to launch Russian natural gas supplies to China via the Power of Siberia gas pipeline in the Black Sea resort of Sochi on December 2

During this period, it was Russia that relied on a China that was sometimes reluctant to deepen its relations to escape American pressure. Now, as their ties have spread to areas such as the military, technology, and finance, these roles are evolving.

“Before Trump, China was cautious about embracing Moscow geopolitically to the fullest, but Beijing determined that American pressure would not ease, so they have no choice but to move closer to Russia,” Lukin said. . “Today, it is China, not Russia, which is more interested in forming this quasi-alliance.” Russian-Chinese collaboration took off in 2014 after the forced annexation of Crimea and the ensuing war in eastern Ukraine and has since developed into a variety of areas. One of those areas lately has been efforts to limit reliance on the US dollar, a process called de-dollarization.

The US dollar occupies a prominent place in the global financial system, as the global reserve currency and de-dollarization have become a priority for China and Russia to protect their bottom line and fight against US domination. Replacing the dollar in trade agreements has become a necessity to circumvent US sanctions against Russia, and efforts have accelerated following Washington’s imposition of tariffs on Chinese products. Experts have long warned against efforts to limit the dollar’s privileged role in the world, and although these attempts have not been very successful, Beijing and Moscow have recently made headway.

New data from the Bank of Russia shows that in the first quarter of 2020, the dollar’s share in Russia-China trade fell below 50% for the first time, a notable change given that the dollar accounted for over 90% of trade. in 2014. While the dollar still accounts for 46% of transactions between them, the euro has risen and has become the currency of choice and, to a lesser extent, the ruble and renminbi, the currency of China.

Summary of the news:

  • Why are China and Russia working to deepen their ties?
  • Check out all the news and articles for the latest business news updates.

Disclaimer: If you need to update / change this article, please visit our help center.

For the latest updates Follow us on googIe New

Source link


About Author

Comments are closed.