By Tang Guhan
The trade volume, cross-border flow of China and Russia' s personnel, goods and funds have increased rapidly in recent years. What are the current potential spheres for the two nations to further tap into? Also what difficulties need to be tackled?
A report namely the Sino-Russian Economic Cooperation Assessment and Prospect: Shared Opinions, compiled jointly by representatives of the Chinese and Russian think tanks led by Dr. Sergey Glaziev, counsellor to President Putin and Wang Wen, executive dean of Chongyang Institute for Financial Studies at the Renmin University of China, was published recently.
The report says that the Sino-Russian economic cooperation has made significant progress in the past few years. Moreover, this comprehensive strategic partnership of coordination is the most important bilateral and peripheral relations between the two countries, which provides intimate political connections for economic collaboration. However, there were still numerous bottlenecks and problems.
The cross-border trade volume is rather small and structurally simple. Despite the frequency of business, which has improved between the two nations, the overall scale of their trade volume was around thirteen percent of that between China and the US in 2017. Meanwhile, energy, raw materials and value-added products dominated the trade structure. Therefore, economic cooperation would be vulnerable to price fluctuations, particularly in raw materials.
The Sino-Russian economic cooperation lies in areas of infrastructure constructions, energy projects and aeronautics which were normally led by governments from both sides. A market-oriented and enterprises-led business cooperation model should be considered.
There were still trade barriers in many industries of both economies. Russia has introduced import restrictions on Chinese products. While China has also imposed high tariffs on certain Russian exports.
Financial collaboration has been a focus for experts from both sides. They noted that the financial sphere remains a "bottleneck" for economic convergence of the Eurasian Economic Union (EEU) and the Belt and Road Initiative's projects. This is an area they have to work on together.
The report says the financial cooperation between China and Russia is becoming more intimate. However, it continues to be insufficient and can not meet the demands of the growing trade and economic collaboration, especially in the scientific, technical and production sectors.
The two sides are planning to deepen and expand their cooperation in traditional banking, insurance and securities. The partnership could start in the sectors of local currency settlements, collaboration in financing activities and commercial interbank business cooperation.
Analysts suggested urging state-run banks to use local currencies for providing credit in bilateral trade and joint investment activities while governments could deploy currency (RUB/RMB) and credit swap mechanisms to finance bilateral trade.
They propose the two sides could establish a bilateral financial mechanism (special funds) involving state-run banks from both countries to prevent market risks.
From their perspective, it is necessary to enhance the placements of bonds and stocks across institutions from both countries.
besides financial collaboratiion, Cultural and scientific communications between the two countries could be further enhanced .
