China-Russia efforts to boost trade in focus at EEF amid reports of border FTZ proposal
Published: Sep 05, 2022 10:39 PM
A China-Europe freight train loaded with 50 containers of footwear, socks and hardware departs Jinhua, East China's Zhejiang Province on February 22, 2022, heading to European markets via Manzhouli port. As of that day, Zhejiang had dispatched 85 China-Europe and Central Asia trains with a total of 7,452 containers. Photo: cnsphoto

A China-Europe freight train loaded with 50 containers of footwear, socks and hardware departs Jinhua, East China's Zhejiang Province on February 22, 2022, heading to European markets via Manzhouli port. As of that day, Zhejiang had dispatched 85 China-Europe and Central Asia trains with a total of 7,452 containers. Photo: cnsphoto

The Eastern Economic Forum (EEF), a major Russian platform for promoting global and regional cooperation, kicked off on Monday in Vladivostok, Russia, where Chinese and Russian officials and businesses are expected to discuss efforts to further boost bilateral economic and trade cooperation 

Among the most watched is a reported proposal from the Russian side on the establishment of a free trade zone (FTZ) on Heixiazi Island in Fuyuan city, Northeast China's Heilongjiang Province, a border island that links China and Russia, according to media reports. 

Several Russian media reports said earlier that Alexei Chekunkov, head of the Ministry for the Development of the Russian Far East and Arctic, suggested that the ministry would make a proposal to the Chinese side about the potential FTZ. 

Details about such a proposal remains scarce, but Chinese experts said that such a suggestion may be in line with growing joint efforts in a wide range of areas, including building cross-border infrastructure and expanding existing ports, to boost bilateral trade.   

"The suggestion suits the rapid economic development and trade ties between the two countries and shows Russia's enthusiasm for deepening cooperation with China against the backdrop of complex international changes and the pandemic," Song Kui, president of the Contemporary China-Russia Regional Economy Research Institute, told the Global Times on Monday.

As a border city, Fuyuan is already a distribution center for international commodities, and cross-border trade has exceeded 660 million yuan ($95.21 million) since 2016. In the cross-border trade zone, residents can purchase more than 70 categories of nearly 20,000 kinds of goods from abroad, according to Xinhua. 

In this context, the establishment of an FTZ as proposed by Russia is expected to further reduce the operating costs of enterprises and further optimize the business and investment environment, Song said.

"The two countries could also explore tourism development, promote the free circulation of goods and conduct trials of direct yuan-ruble settlements on the island," Song said.

Chen Jia, an independent research fellow on international strategy, told the Global Times on Monday that China and Russia are highly complementary in their economies, with Russia having advantages in resources, energy and heavy industry and China being strong in smart technology, modern services and electronic payments.

Against the backdrop of a global recession, inflation and increasing volatility in the energy market, China and Russia should deepen bilateral cooperation, which will be conducive for stabilizing the market, improving people's livelihoods, and deepening bilateral complementarity and innovative trade patterns, Chen said.

Due to these joint efforts, China has remained the largest trading partner and source of foreign investment for the Russian Far East. Trade between the Russian Far East and China reached $13.89 billion in 2021, up 28 percent year-on-year, according to Consul General of Chinese Consulate-General in Vladivostok Piao Yangfan.

Major border areas have seen increased trade, closer people-to-people exchanges and improved road connectivity, bringing tangible benefits to both peoples.

In Manzhouli, North China's Inner Mongolia, a major land port for China-Russia trade, coal shipments from Russia via the Manzhouli-Zabaikalsk port grew 18.3 percent in the first seven months of the year, Sputnik reported, adding that more than half of the exported coal via the port is needed mainly for thermal power plants in northeastern China. 

According to the report, in the first half of 2022, the volume of goods transported through this port reached about 7.5 million tons.

"We see a growing number of Chinese tourists come to visit Manzhouli to experience the taste of Russia and the exotic feeling at the border, since international travel has been restricted due to the epidemic," a staffer at a scenic spot in Manzhouli told the Global Times on Monday.

During the 13th Five-Year Plan period (2016-20), Manzhouli had 23.3 million tourist arrivals with total tourism revenue of 36.68 billion yuan. It was also the China-Russia border port that saw the most Russian inbound tourists during the period, the Xinhua News Agency reported.

Another border city, Heihe, in Northeast China's Heilongjiang Province, has made every effort to boost cross-border e-commerce. As of July 18, the Heihe Free Trade Zone had added 2,456 new enterprises so far this year, with total registered capital reaching 10.5 billion yuan, according to the local government. The government said that 70 percent of these new enterprises are engaged in cross-border e-commerce., a China-Russia cross-border e-commerce platform in the zone, told the Global Times on Monday that it sold 20 million yuan of Russian products online in the first half of 2022, up 900 percent from the same time last year, with Russian candies, sour cucumbers, biscuits and chocolate being most favored by Chinese customers.

Founded in 2016, Epinduo has 17 physical stores and 113 online stores, and it plans to expand the sales of Russian commodities across the country in the next three years, the company said.

"As a border city between China and Russia, Heihe has unique advantages for cross-border e-commerce," said Zhao Junyi, a staffer from the company.

In addition, increased road connectivity between the two countries with the opening of the Heihe highway bridge in June and the progress of the Tongjiang-Nizhneleninskoye railway will play an important role in enhancing economic and trade exchanges, experts said.   

The scale and quality of China-Russia economic and trade relations have been upgraded as bilateral trade has expanded from pure trade of goods to the integration of transportation, tourism and commerce, Chen said.

"Even amid the complicated and volatile international situation this year, bilateral trade will maintain the momentum of rapid growth," Chen said.

Trade between China and Russia last year rose 35.9 percent year-on-year to $146.87 billion, reaching the highest level in history.

In the first seven months of 2022, trade between Russia and China rose 29 percent year-on-year to $97.71 billion, according to Chinese Customs.