Virus hits Chinese firms in Russia

By Ma Jingjing and Zhao Juecheng Source:Global Times Published: 2020/4/16 18:33:40

Bilateral energy cooperation to be strengthened for geopolitical stability

A harvester works at a soya farm near Russia's Birobidzhan on Oct. 19, 2018. Photo: Xinhua

 Economic and trade cooperation between China and Russia has been challenged amid the COVID-19 outbreak, with Chinese enterprises operating in Russia facing a business slump and barriers to the movement of people and goods.

Chinese companies engaged in tourism, hospitality, trade and construction in Russia sustained a hard blow from the coronavirus outbreak, Zhou Liqun, president of the Chinese Chamber of Commerce in Russia, told the Global Times on Thursday.

"The occupancy rate of hotels has dropped to less than 10 percent from 40-50 percent at the beginning of 2020, Chinese restaurants are temporarily closed and projects under construction have come to a halt," he said.

A Chinese tourism agency owner surnamed Li in Irkutsk, Russia told the Global Times on Thursday that work in the tourism sector in Russia has been suspended, and many Chinese tour guides and chefs either found other jobs or returned to their hometowns.

"I've already lost a lot of money by booking hotels for Chinese tourists who later canceled trips, and I still have to pay salaries to my employees," Li said, noting that many travel agencies operated by Chinese nationals in Russia might be forced to close due to the coronavirus.

What's worse, Russian farmers are worried that Chinese workers can't quickly return to Russia to prepare for spring farming, Zhou said, noting that the grain harvest and China-Russia agricultural trade would be threatened if the problem couldn't be solved.

Data from the General Administration of Customs showed that bilateral trade rose just 3.4 percent year-on-year in the first quarter of 2020 to reach $25.35 billion.

Russia's exports of wood, coal and seafood to China contracted, while Russia's Far East region reported tight supplies of vegetables, according to Zhou.

A businessman named Hu Yong in East China's Zhejiang Province told the Global Times on Thursday that the company's exports of small commodities like household items to Russia are now just about 40 percent of the pre-epidemic level. 

"After the outbreak in China was largely brought under control in early March, our exports to Russia recovered somewhat, but they're slumping again following the closure of land ports," Hu said, adding that his company has shifted to exporting medical supplies to Russia.

Given the dual impact of the pandemic and low oil prices, Russia's economy may contract by 3-5 percent in 2020, The Moscow Times reported earlier this month.

Zhang Hong, a research fellow at the Institute of Russian, Eastern European and Central Asian studies at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Thursday that Russia is expected to seek Chinese companies' investment- for example, at the upstream of the energy industry and in the financial sector - to create more jobs and stabilize the economy.

China-Russia energy cooperation may be strengthened amid the global pandemic, Zhang said. "China will likely increase energy imports from Russia not only for economic benefits but to extend support to our strategic partner," he said, noting that China needs to build a stable relationship with Russia which reportedly sent a planeload of medical equipment to New York recently.

Since the outbreak in Russia, Chinese companies such as the Greenwood International Trade Center in Moscow — where many Chinese companies are located — and ICBC's Russian branch have donated medical supplies to help the drive against the virus.

The first batch of 200,000 face masks purchased by the center arrived in Moscow on April 12, and they were donated to government agencies in the capital city.

Posted in: ECONOMY

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