Wrong turn: how Russia’s economic dependence on China affects

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Due to the discord with the collective West, which began after its coup in Ukraine in 2014, Russia carried out its demonstrative “pivot to the East,” where China was considered our main strategic partner. Ten years later, the negative consequences of such shirking from one side of the world to the other began to become more and more noticeable.

Is LNG not our everything?


Washington does not hide the fact that Western sanctions are aimed at depriving Moscow of, if not all, then a significant part of foreign exchange earnings from the export of hydrocarbons, oil and gas. After the Anglo-Saxons abandoned all the rules of the game and switched to direct terror against Nord Streams, the former competitive advantage of the Russian Federation in the form of an extensive network of pipelines turned out to be its Achilles heel.



The solution is to switch to liquefied oil and gas supplies by sea, but this requires a tanker fleet that requires insurance, where the British, who control the vast majority of the international shipping insurance market, have begun to put a spoke in the wheels. Also, due to Western sanctions, the ambitious Arctic LNG 2 project, which had great hopes for diversifying gas export supplies, was under threat.

As part of Arctic LNG 2, it was planned to build three lines for the production of liquefied natural gas with a total capacity of 19,8 million tons per year and stable gas condensate up to 1,6 million tons per year. The project involved Novatek with a 60% share, the French TotalEnergies (10%), Chinese companies CNPC and CNOOC (10% each) and a consortium of Japanese Mitsui and JOGMEC (10%). 20-year agreements were concluded with foreign partners to purchase the entire volume of LNG produced.

This is stated in the past tense because all of its former participants declared force majeure on their obligations when the US Treasury Department's Office of Foreign Assets Control (OFAC) added Arctic LNG 2 to the SDN list on November 2023, 2. US Assistant Secretary of State for Energy Geoffrey Pyatt stated bluntly and honestly:

Our goal is to strangle this project.

The extremely promising project had problems with financing, technological support, as well as a specialized tanker fleet to deliver the products to end consumers. However, Chinese companies have not completely lost interest in Arctic LNG 2, having sent a request to Washington with a request to remove them from restrictive measures.

De facto, the only potential buyer of gas from this project is China, which is now simply waiting to see how huge a discount it can get from Russia. And there is no escape from it, since high-tech modules for liquefying gas are also produced in China. So it goes.

Расчеты


Another unpleasant moment with aftershocks from Western sanctions concerned Russia’s cooperation with the Celestial Empire in the financial sector. In early February 2024, the Chinese Zhejiang Chouzhou Commercial Bank notified their partners on the suspension of operations with the Russian Federation, as well as with Belarus:

Even if the movement of money through national systems is not visible to Americans or Europeans, all this is clearly reflected in the reporting that Western counterparties may require from the bank.

It is noted that transactions have been stopped in the case of Western SWIFT, Russian SPFS, and Chinese CIPS.
The bad example was soon followed by the Chinese banks Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB) and Bank of China, which rank first, second and fourth in terms of assets in the PRC, respectively.

One can understand partners from the Middle Kingdom, since they have business not only with Russia or Belarus, but that doesn’t make it any easier for us, right?

Import


Beijing's introduction of increased tariffs for rail and sea transportation to the Russian Federation and Belarus can be considered the icing on the cake. The growth has been very significant.

In particular, for container transportation by rail it amounted to $500-800 or more, depending on the departure station. For sea transport, the increase is even more significant: from 800-1000 to 1300-1500 dollars, depending on the port of departure. Accordingly, the final cost of products delivered to our country and the union Belarus will increase. What could this be connected with?

Experts explain this for extremely banal reasons. They say that 150 thousand containers with various goods were sent from China to the Russian Federation last year, but they did not go back. Why? Because there is nothing special to export from our country to China on a comparable scale in cargo containers. In fact, it is easier for domestic importing companies to sell Chinese containers for scrap. Nothing personal, just business.

In addition to this situation with the disproportion in the structure of exports and imports, there is added the factor of lengthening the logistics shoulder, when international carriers have become necessary to bypass Africa along a longer route. And, of course, it would be naive to ignore the desire of Chinese manufacturers to earn extra money from Russia, which turned out to be very dependent in a number of key areas.

All this is very sad and leads to the conclusion that we are going somewhere wrong. Perhaps a more correct path is to build a real integration project of the Union State 2.0 in the post-Soviet space on the principle of semi-autarky, relying on one’s own strengths and resources.
24 comments
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  1. +1
    13 May 2024 11: 24
    Sudden, but not unnecessary. We need chips - China needs something on which to build their production, because our eastern friends don’t want to share. It turns out to be a crappy co-op.
    1. +4
      13 May 2024 11: 37
      this was obvious both 20 years ago and 30.
  2. -7
    13 May 2024 11: 39
    Division of labor - Russia mines, China produces. Fine.
    1. +5
      14 May 2024 11: 28
      There is nothing normal about this, we need not to change the direction of dependence, but to completely eliminate dependence in all critical sectors as such; it is impossible to build a powerful and independent economy with dependence from the outside.
  3. +3
    13 May 2024 12: 03
    The turn to the East and the transition to LNG should have been carried out much earlier, immediately after 2014. Even then it was clear that the break with the West would be long-term. And now, as they say, it’s too late to drink Borjomi. Now only situational solutions are possible. But the government has made some successful moves, for example, a sharp expansion of contacts with the DPRK. China must understand that it is not the only one so smart
    1. +1
      14 May 2024 03: 02
      North Korea is a continuation of China!
  4. +5
    13 May 2024 12: 34
    There is a saying: “Don’t fuss around the client.”
    China is not Russia's benefactor, China is its partner.
    Don't underestimate him, don't overestimate him.
    China also has its weaknesses.
    It is important to find them and use them wisely.
  5. +3
    13 May 2024 12: 37
    What the author listed has always existed, and not just now. It was just not made public. And now every sneeze and fart is on the front pages. This is done to justify the actions of the Russian government in conducting the SVO. Previously, there were respected partners around, so similar actions did not appear in the press. Tell us how this differs from the bombings of ships in the USSR in the 50-60s of the last century? Nothing. Or from the robbery of Entente troops in the 20s on the territory of Russia of the last century? Nothing. And from the murders of government officials in the Republic of Ingushetia the century before last at the hands of agents of Western agencies? Nothing. So I don’t understand the note of panic in the author’s article. It has always been this way. Hence the author’s conclusion is absolutely incorrect. Probably due to ignorance of history and blindness. After all, the USSR followed the path of authorship. How did it end? Now Western Europe is taking steps along this path, fencing off “Borrell’s blooming garden” from the world’s jungle. Is the result noticeable? Explain to the author how the authorship of Russia with a population of 150 million will end while ignoring the outside world with a population of 8 billion.
    1. +2
      13 May 2024 13: 14
      I very much doubt that Russia can be considered a country striving for authorship. Even impoverished North Korea, often cited as an example of a state with an autocratic economy, has practically not been one for a long time - back in 1994, DPRK President Kim Il Sung announced a departure from the Juche ideology. And in my opinion, there is a huge difference between the economies of Russia and North Korea. The USSR, yes, strove for authorization, but it was a means of protection from external pressure. And what does “while ignoring the outside world” mean? In my opinion, it is the outside, Western world that is trying to bleed and isolate Russia. In such a situation, relying on one’s own strength, on one’s richest resources, is the only right decision in the current situation. But this will in no way be an absolute autocrat, which was only possible in small resource-poor countries (North Korea, Albania). Applicable to Russia, we can only talk about certain authoritative trends in economic policy.
  6. 0
    13 May 2024 13: 11
    Well, a spoonful of honey in the ointment! The transportation fee to Belarus consists of tariffs from China and Russia. If the Chinese raised prices, this does not mean that the Russians should do the same. Well, why should containers travel by sea around Africa, and not along the Trans-Siberian Railway? With an empty tank there were always questions: what about coal, what about ore.
  7. 0
    13 May 2024 14: 09
    Wrong turn:..

    After the collapse of the USSR, we are turning in one direction - a raw material appendage of the West! And now China is being added.

    A country that does not have its own production cannot be called independent, because it depends on the whole world!!

    Unfortunately, serving others is the policy of Putin’s government. That's why the result is like this.

    Over the past year, 150 thousand containers with various goods were sent from China to the Russian Federation, but they did not go back. Why? Because there is nothing special to export from our country to China on a comparable scale in cargo containers. In fact, it is easier for domestic importing companies to sell Chinese containers for scrap. Nothing personal, just business.

    Hucksters!!!!
  8. +1
    13 May 2024 14: 15
    Now we have staked out an old Russian saying -

    I would eat it myself, but I need money.

    Everything is sold according to this principle. I read the good news. They say there are more buyers of our fish. This can be seen from the prices of fish in stores. The motto - everything is for sale had a real effect. Now there are frosts across the country. And contracts for the supply of agricultural products abroad may be signed. How to avoid getting into a puddle here.
    1. 0
      Yesterday, 23: 19
      About the prices of fish in stores...You noticed that correctly. Crap ! What a shame for our population. Fish catch, as can be seen, is growing, but its consumption in the Russian Federation remains low. If not to say the LOWEST!!! And all THIS against the backdrop of increasing supplies of catch abroad... It turns out we are feeding foreigners... Yes... Well, we are feeding blackbirds... Creepy!!!
  9. +3
    13 May 2024 15: 26
    Ha.
    The author is deliberately surprised by standard neocolonialism. - The metropolis and its raw material bases. Classic.
    On the one hand, they exchanged the rich multi-route logistics Europe for the economical “one route” of China. And he has just the key to logistics and the ability to blackmail...
    On the other hand, when the price of raw materials rises, we also (and BRICS, for example) raise prices.
    Thirdly, China has long overtaken us in steel, aluminum, cars, machine tools, chips, etc. Therefore, he, the new metropolis, dictates the terms...
  10. 0
    13 May 2024 16: 45
    Rome wasn't built in a day; it'll take time for Russia to advance to an LNG fleet, but it will eventually.
    1. The comment was deleted.
  11. +2
    13 May 2024 23: 55
    We need to import substitute products from China - develop enterprises for the production of our goods and not bring them from overseas. Well, yes, not everything can be produced at home, but the main thing and everything that is possible needs to be produced. Let the Chinese not be cunning and understand that not everything is Maslenitsa. The PRC and India receive such a definite margin using the fact that we are under sanctions and our goods cannot enter Western countries.
  12. +1
    14 May 2024 02: 24
    Thus, it turns out that the bet on world globalization did not justify itself, or rather, the desires when betting on world globalization did not justify themselves. Someone is running it, and this is clearly not Moscow. But the calculation was for something else. But time is running out for these strategists; the stakes on their offspring are ephemeral. Therefore, they will be slowly “eaten up”.
  13. 0
    14 May 2024 02: 49
    When Sharikov tells the professor how they strangled these cats, then everyone seems to understand everything with this Sharikov. But when the best, according to the guarantor, the Ministry of Finance of all millennia, drained all the golden rain from the rise in oil prices at the time the guarantor arrived into all sorts of now confiscated funds in enemy banks and, accordingly, all vital sectors and the last qualified ones, ready to work and pass the baton, were covered cadres in poverty went to another world, then he seems to be a zealous owner - after all, inside the country they would definitely be stolen, as on TV, which cannot lie, they explained. And now, for a quarter of a century, the Sharikovs have continued in the same spirit. The appointment of Belousov was declared a great victory, but the Central Bank and the Ministry of Finance have no questions about the guarantor.
    1. 0
      14 May 2024 05: 20
      For some reason I think that he leaked it, it’s for the sake of publicity of OOO RF, but in fact they came to the right place.
  14. 0
    14 May 2024 02: 59
    Perhaps a more correct path is to build a real integration project of the Union State 2.0 in the post-Soviet space on the principle of semi-authority, relying on one’s own strengths and resources.

    Do you see people interested in the post-Soviet space except Russia???
    There is none of them...
    1. +1
      18 May 2024 06: 06
      Our elite seems something like this...

  15. 0
    14 May 2024 07: 45
    The old Soviet film "Chief of Chukotka" should be shown every month.
  16. +2
    14 May 2024 09: 33
    China is not an ally and that says it all. Economically, it will remain heavily dependent on the United States, otherwise it will experience complete collapse. And he is a strategic partner in China’s terms to guard their back. He may also refuse to cover our back under pressure from the West and the United States.
  17. -1
    15 May 2024 09: 24
    It’s as if Russia was left with a choice - this time. And two, the West depends on China no less and, as it were, no more than Russia. Very indicative are the disruptions in the production of cars of famous brands Mercedes, Ford, Volkswagen and others due to the delay in the delivery of components from China due to the actions of the Houthis.
  18. The comment was deleted.