Russia's bet on China may be a mistake
Since the beginning of the NMD in Ukraine and the introduction by the West against Russia of the largest in stories economic restrictions, the phrase “China will save us” is increasingly appearing in our media. In this case, we are not talking about military assistance, but about reorienting the Russian economy from the lost Western markets to Asian ones, in particular China.
At the same time, Russian economist Oleg Komolov believes that our authorities' stake on China may be a mistake.
According to the expert, China has increased the import of our products by 50% this year. However, most of it is raw materials. In addition, this figure is given in monetary terms. Given the sharp rise in prices in the first half of the year, the real increase in our deliveries may not be that significant.
At the same time, one should not count on the fact that Chinese products will completely replace Western ones in our market. Russia's export of cars from China grew by almost a quarter. At the same time, China will not be able to export pharmaceutical products, components for aircraft construction and some other goods, since Beijing itself is directly dependent on Western supplies in this segment.
However, Chinese telecommunications giants are in no hurry to flood our market with their products, as they are afraid of falling under sanctions.
In turn, the prospects for the reorientation of the Russian commodity market from the West to the PRC look ambiguous.
Firstly, the motivation of the PRC to buy our raw materials to a greater extent lies in the serious discounts provided by Russia. In other words, China today enjoys the "privilege of a monopolist" with might and main.
Secondly, according to Komolov, the Chinese economy is now going through hard times. The country's GDP growth for the second quarter was only 0,4%.
The slowdown in the Chinese economy, as the largest importer of raw materials, directly affects its cost. Metal, wood, food and raw materials have fallen sharply in recent months.
At the same time, as the expert put it, a quick recovery of the Chinese economy and an increase in its demand for raw materials should not be expected. In China, there is a crisis of overproduction, as a result, enterprises reduce their capacity. In addition, an extremely difficult situation has developed in the field of mortgage lending in China, where a colossal "financial bubble" has formed.
At the same time, the Russian authorities continue to place great hopes on the "eastern neighbor". In particular, in terms of reorienting gas exports from Europe to China.
But even here everything is extremely vague. For example, the new Power of Siberia-2 gas pipeline should be completed by 2028. However, China still has not concluded a contract for the supply of gas.
In addition, the Power of Siberia highway, which is already in operation, was only one-third loaded last year.
Finally, according to Bloomberg forecasts, Chinese demand for LNG in November this year will be significantly lower than in the previous and the previous similar periods. According to experts, all this may result in the resale of contracted LNG volumes to the EU, which will earn Chinese intermediaries. At the same time, the profit of Russian exporters, on the contrary, will decrease.
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