Opportunities For Russian Companies To Sell To China: Russia-China Bilateral Trade To Grow 25% Per Annum From 2021-2024
Veronika Nikishina, CEO of the Russian Export Center said that increasing bilateral trade turnover between Russia and China to US$200 billion by 2024 is feasible. “The task set by the leaders of our countries – to reach the level of US$200 billion by 2024 – will be completed. We have excellent prospects, and this is clearly seen in the example of exports amid the pandemic in several industries at once.” she said.
This is equivalent to a sustainable Russia-China market growth rate of 25% per annum from 2021.
According to Nikishina, in particular, there are several confident leaders in the sector of the agro-industrial complex. For example, the supply of meat and offal from Russia to China in 2020 increased nine times, soybean oil – five times, sunflower oil – two times. In addition Russia began supplying beef to China in 2020.
“Our products have two unconditional competitive advantages, which we will develop in the future. The first is natural ingredients. In Russia, the use of genetically modified technologies is legally limited, so Chinese consumers clearly know that they have found products that are environmentally friendly and safe.” Nikishina said.
The common border with China and actively developing logistics system is another competitive advantage for Russian goods. According to Nikishina, further construction of infrastructure in the Russian Far East will increase trade between China and Russia.
The Russian Ambassador China, Andrey Denisov has also stated that by the end of 2020 the two countries will maintain 2019’s volume of bilateral trade at US$110 billion.
According to the ambassador, the pandemic has not affected Russian-Chinese trade. “In the first nine months, according to Chinese statistics, we are practically at the level of last year. The reduction in trade turnover is about 2%. This is within the statistical margin of error, and in absolute figures, for nine months we have reached the level of almost US$80 billion, which says that if we at least maintain these rates, then by the end of the year we will receive the same – roughly US$110 billion of trade that we had in the crisis-free 2019.”
The two countries have long expressed desire to double trade. This is good news for Russian traders and exporters who are now looking at targeting the China market. We examined the trends in the article Russia-China Bilateral Trade Hit US$110 Billion In 2019: What Is China Buying? and looked at how Russian businesses can set up offices in China in the article Procedures For Russian Companies To Set Up Representative Offices In China.
China has also incentivized Russian companies and traders to sell to and buy from China by cutting profits taxes when selling to China to 15% for Russian companies operating in border Free Trade Zones, while import taxes have been reduced in zones in Suifenhe, a trade zone in China’s Heilongjiang Province.
It is also possible for Russian traders to sell to Chinese buyers online – and use online platforms to do so.
As Nikishina stated, the Russia-China infrastructure has also improved, with the first China-Russia bridge over the Amur River opening this summer.
Dezan Shira & Associates assist Russian companies enter the China market and can advise on business intelligence, corporate establishment and available tax incentives. The firm has 13 offices across China including Hong Kong. Please email Maria Kotova at email@example.com for assistance.
- The Benefits For Russian Companies When Setting Up In Hong Kong To Access Mainland China Opportunities
- Why Russia Is Suitable For Subsidiary Manufacturing Investments Supplying The China Market
During these uncertain times and with sanctions in place, our firm helps Russian companies relocate to Asia. We also provide financial and sanctions compliance services to foreign companies operating in Russia. Additionally, we offer market research and advisory services to foreign exporters interested in doing business in Russia as the economy looks to replace Western-sourced products. For assistance please email firstname.lastname@example.org or visit www.dezshira.com