Russia: Economic turn to the East was a fiction

Officials and journalists announced strong growth of external trade with China and other Asian countries. However, if you look, this “rapid growth” was a fiction. Growing up in 2017, the volume of foreign trade is exceeded only by the previous year, but remain modest in comparison with pre-crisis 2013, crisis or even 2014-2015. And prerequisites for a particular situation is not improving.


Many Russian media has announced the growth of Russia’s foreign trade with Asian countries. Some reported an increase in the share of Asian countries in foreign trade turnover with 30% in 2013 to 35% in 2016, the other a 20-percent increase in trade with China in may 2017 and 26 percent jump in the first five months of this year.

If you open the statistics of the Federal customs service (FCS), at first glance you can really see a sharp reversal of Russia in Eastern Asia (China, Korea, Japan, Mongolia). This part of Asia meant primarily talking about the cooperation with Asian countries. For example, in January-April 2017 (no more recent data) the trade turnover with China increased by 37% to 24.5 billion us dollar in comparison with the same period in 2016, and Korea by 36% to 5.8 billion dollars, with Japan — on 6% to 5.3 billion dollar, with Mongolia 31% to 347 million dollars.

However, if you look at the numbers of previous years of the same period, it turns out that the increased volume of trade in any of the countries do not reach the indicators of 2014 and even 2013, when relations with the West were still good and when about any turn towards the East, the Russian government was out of the question.

So, trade with China in January-April 2017 14% less than the same indicator in 2013 (28.3 billion dollars). Trade with Korea — 29% does not reach the indicator of 2013 (8.2 billion dollars). The four-month turnover of procurement from Japan by 52% less than the same figure four years ago ($11 billion). A similar pattern with Mongolia — in January-April 2013, Russia bought 77% more (616 million dollars) than in 2017.

The annual turnover of foreign trade is still more evidence of the collapse of cooperation with East Asia. Moreover, according to the figures, the fall was very large. From 2013 to 2016 the volume of trade with China decreased by 25.5% to 66.1 billion dollar, Korea — 39% to 15.1 billion dollar, with Japan — by 51.7% to $ 16 billion, with Mongolia — 42.2% to 347 million dollars.

On paper, the share of East Asia in the structure of Russia’s foreign trade in 4 years increased. In 2013, the share of these four countries amounted to 17.8%, in 2016 — 20,9%. The main growth was due to China (its share increased from 10.5% to 14.1%) and Korea (from 3% to 3.2%), the share of turnover with Japan has fallen from 4.1% to 3.4%, while the share of Mongolia has remained unchanged (0.2 per cent). However, the increase in the share of these Asian countries has occurred exclusively on the background of falling volumes of trade with Western countries. Just trade with the West fell a little harder than with Asia.

Against this background, statements by Russian officials about the “rapid growth” of trade with China look strange. In April, for example, the head of the Department of Asia, Africa and Latin America the Ministry of economic development Evgeny Popov has announced a 30-percent trade growth with China in the first quarter of 2017. And by 2020, he said, turnover is expected to grow to $ 200 billion a year. This, incidentally, is 3 times more than in fact Russia sold to China in 2016. Due to what needs to happen three times, it is not clear, especially given the risks associated with the slowdown of the Chinese economy, and the slowdown in cooperation in the energy sector.

As explained lecturer Institute of business administration Rangers Galina Kuznetsova (specializing in the foreign trade), no growth of trade with Asian countries do not. “And can not be, because there is no reason. The price of our raw materials remain low, whatever is going on, and fluctuations in the 2-3 dollar weather do not. Orientation to Asia, of course, is everywhere declared, however, the economy can not be so quick to rebuild. Moreover, our oil and gas pipelines were built to Europe. The Chinese, in turn, are tough negotiators. Plus we’re under pressure competition for gas from Turkmenistan and Iran recently started to supply oil and gas to foreign markets. Not to mention the fact that we are not increasing imports,” said she.

Despite the decline in trade with Asian countries, it should be noted that it is represented in monetary terms. It is possible that in absolute terms the turnover pattern is somewhat different. FCS database provides statistics in tonnes only in all regions of Russia and from the vast amount of goods that it is technically impossible to generalize. And the calculation manually would take a lot of time. “In tons, we have a small 2-3% growth in the Asian countries but only for some items of products. The total turnover in absolute terms is still declining,” said Galina Kuznetsova.

According to her, the cycle of growth in foreign trade, which had for the period 2011-2013 has been suspended in 2014 for various reasons, “and such beauty, as in 2013, we are at least a few years will not see”. “We are all the same there is a crisis, a recession. The people who announce the growth of trade with Asian countries, as a rule, compare data with year 2015, which was most disastrous. Of course, in comparison, will increase in 2016 and even in 2017 the growth will be compared with 2016. But they forget that the volume of trade was much higher. Miracles do not happen,” she said.