Russia-China trade down 29% as $100bn dream fades

Putin lands in Beijing for WW2 anniversary

Russia-China trade: As Chinese leader Xi Jinping plays host to Russian President Vladimir Putin to Beijing  for ceremonies marking the anniversary of the end of World War II, dreams of trade between the two countries hitting the $100bn mark are beginning to look just that – dreams, according to Russian officials.
Trade between the two nations fell by 29% in the first half of this year, down to just over $30bn, and sources within the Russian government now say that there is virtually no chance they will hit the $100bn goal publicly embraced by Putin  as recently as October. China’s market plunge over the last few weeks has added to the pressure,  and has helped pushed the rouble down to its lowest level in months. Growing doubts about China’s economic outlook have also hit oil prices – Moscow’s main export – pushing Russia deeper into recession.
Ever since relations between Russia and the West began souring after the annexation of Crimea, Moscow has been defiantly hailing its growing trade and business links with China as a deliberate strategy to shift the centre of gravity of the world economic order eastward. The reality is quite different, Moscow Carnegie Center’s Alexander Gabuyev told Bloomberg this week.  “Russia is the supplicant partner, not China, which still has a range of choices to source resources even despite its recent economic troubles.”
This year’s decline in trade this year has pushed Russia out of the ranks of China’s top 15 trade partners for the first time in more than five years, with some of the Russia-Chinese deals announced to date not working out as hoped.
These include a CNY150bn swap agreement between the countries’ central banks that was designed to  facilitate direct settlement between the ruble and the yuan, bypassing the dollar. The agreement has hardly been called upon,Vnesheconombank’s first deputy chairman Peter Fradkov said last week, because it can only be used only for short-term trade financing. 

Source: Bloomberg