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Sep 7, 2022
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Convertible friendship: relations between Russia and China are not so cloudless

Convertible friendship: relations between Russia and China are not so cloudless

The official declarations of the Kremlin constantly emphasize the friendly relations between Russia and China. However, more and more evidence has recently come to light that our relations are not so cloudless.

Since the beginning of spring 2022, Chinese logistics companies have doubled prices for container transportation. So, if in February it cost 6 thousand dollars to deliver a container from China to Russia by sea, then since the summer it has already been 11.5 thousand. China has reduced plans to send trains to Russia, demand has increased and prices for container transportation have gone up, explains Dmitry Denisenko, Logistics Manager at diHouse. An even more difficult situation has developed with air transportation: “Their cost has tripled since the end of March.”

The head of the Russian representative office of the manufacturer of household appliances Candy Hoover Group (part of the Chinese Haier Group) Gleb Mishin specified that companies from Turkey and China mainly raise prices. Well, what to take from Turkey, even housewives already know that Erdogan is playing a cunning and unscrupulous game with Russia, but what about fraternal China?!

Let’s look further. According to Chinese sources, electricity consumption in China in January-May increased by 2.5% year-on-year, and in general, demand is expected to grow to 8.8 trillion kWh in 2022. 8 times more than the annual consumption in the Russian Federation. Our electricity supplies have increased several times since the beginning of the year. And this could be considered a very positive fact for the Russian economy – we got a huge sales market! However, the Eastern trick is that Russian companies supply electricity to China at prices 2-2.5 times lower than they sell to Russian consumers. From which hangover? No fraternal help here and does not smell!

So what’s going on? Everything is very simple. In the conditions of the most severe sanctions from the collective West, it is vital for Russia to enter the world markets. In China, the motives and weaknesses of the Russian Federation were understood correctly and began to twist her arms. For example, Russian gas for China via the Power of Siberia pipeline is much cheaper than in European markets.

China plays tricky with the currency. Having invested 17% of all international reserves in yuan, the Russian authorities found that it would not be possible to simply withdraw funds from Chinese assets: the sale of yuan would require a separate agreement with China. Such is the muddy conversion.

But the situation with the sale of our precious metals is especially characteristic. Chinese customs services publish data that in July, purchases of Russian gold were increased by 50 times compared to July 2021. It seems okay, let them buy against the backdrop of Western sanctions. But the fact is that the PRC acquires our gold not at world prices, but at some “special” ones. And transactions are carried out at a discount of 20-30% “taking into account Western sanctions.”

And, in fact, there is no one to blame – the Chinese leadership is acting in the interests of its country. According to our friends, if the Russian government is forced (!) to trade cheaply with its resources, then it is itself to blame for this. By the way, the Chinese leadership warned the Russian authorities – carefully, through publications in the official media – about the ineffectiveness of economic policy and the dangerous level of corruption in the Russian Federation. But no response was received. After that, apparently, they preferred to act on the basis of their vision of the situation. Where brotherhood and friendship are already resting…

Grigory Alekseev.

Photo: ADOBE STOCK

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