00:00Chris Weaver is CEO of Macro Advisory Limited, a Eurasia-based business consultancy.
00:05Great to have you on Global Business Europe.
00:08Now, it's a reasonably balanced trade relationship.
00:11Talk me through what China and Russia actually trade in.
00:16Yeah, it is. It's a lot more balanced now.
00:18If you go back 10 years, it was very heavily biased in Russia's favor
00:22because it was selling all sorts of resources to China, but not buying a lot.
00:29But over the last 10 years, as Russia's position with the West has deteriorated because of sanctions,
00:35then Beijing has insisted that Russia close that trade gap.
00:39In other words, that Russia buys a lot more product from China in order to boost Chinese exports.
00:47And, of course, sanctions have helped that because Russia has had no choice.
00:50So today, for example, Russia is the biggest export market for Chinese-made cars or vehicles.
00:56It buys a significant amount of product.
00:59If you go to a typical supermarket now in Moscow, for example, in the building that I'm now in,
01:0510 years ago, you would have seen mostly Western-made products,
01:09from detergents to all sorts of products.
01:12Now you go down and you find that a significant amount of those products have made in China on them.
01:18So we've seen this rebalancing rushes.
01:20This largely has replaced the kind of lost Western-made goods because of sanctions with Chinese-made products.
01:29And that's across the board, say cars for sure, but right down to detergents and all sorts of basic goods.
01:35It's a more balanced relationship.
01:36And that's what we saw this week, I think, the visit between President Putin and President Xi.
01:42It was talking about continuing that balanced relationship.
01:46In other words, as China is thinking about buying more energy, you've mentioned Power of Siberia too,
01:53but thinking about buying more energy from Russia.
01:55But in exchange, it wants a commitment from Moscow that Moscow would buy more products from China to keep the
02:01trade in balance.
02:02So this visit really did put a big focus on trade resilience.
02:08Where do you think that China and Russia and economic ties have moved forward most noticeably over the last few
02:15years?
02:16And where do you think they're going to move forward most noticeably in coming years?
02:20Well, as I say, it's been a very broad kind of engagement.
02:25Clearly, China has been buying a lot more resources from Russia.
02:31So I suppose to the extent from what we hear from Chinese officials is that they see the trade in
02:36energy and materials.
02:37And that includes coal and timber and all sorts of materials, not just oil and gas.
02:43But they see that as helping China to kind of build a resilient supply chain.
02:48In other words, a safer supply chain.
02:50And I guess that message has been reinforced in the last couple of months with the blockage of the Strait
02:56of Hormuz.
02:56You know, China has been importing imports a lot of key materials such as gas and oil from around the
03:03world by tanker.
03:04And it's the problem to the Gulf has shown that you can be vulnerable for all sorts of reasons, either
03:11by sanctions or deliberate blockades or accidents, etc.
03:14So China has been kind of creating a more secure supply line of critical materials from Russia, from Central Asia
03:23over the last 10 years.
03:24And Russia, in turn, has been broadening out the, if you like, the trade relationship with China.
03:31It used to be very heavily dominated with imports from Europe.
03:35And now that's completely shifted to China.
03:37So it is a much more integrated relationship than has been the case.
03:42Russia is no longer just a supplier to Russia.
03:45It's a big customer and vice versa.
03:47So it has broadened.
03:48It has deepened.
03:49It's now a lot more important for both countries.
03:52Chris Weaver at Macro Advisory Limited.
03:55Thank you very much.
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