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China and Russia aren’t economic equals but, thanks to the US trade war, their partnership looks built to last
- Until now, Russia’s relationship with China has looked decidedly one-sided, but Donald Trump’s trade war has changed all that, and Moscow could be a natural hedge against international pressure
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Even as Russia’s economy modestly rebounds amid rising oil prices, its pivot to the east is expected to persist. But while China has already become Russia’s major trading partner, helping offset the impact of geopolitical uncertainty with the West, the Kremlin is now striving to assert itself as an indispensable destination for Beijing amid the trade war with Washington.
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Russia’s economic growth reached a six-year high last year, but despite the need to introduce effective structural reforms and boost decreasing household incomes, the model relying on the export of hydrocarbons remains intact, and appears to be a double-edged sword.
Russia remains an attractive market for speculators of all stripes, while remaining less vulnerable to external shocks. The capacity to reorient trade to other locations – in this case, China – is another advantage.
The two nations today are arguably more aligned than at any point since the Sino-Soviet split of the early 1960s. Chinese President Xi Jinping has visited Moscow more than any other capital since he assumed power. Last June, he awarded Russian President Vladimir Putin China's first-ever friendship medal, honouring him as “my best, most intimate friend”.
Bilateral trade grew from US$69.6 billion in 2016 to US$107.1 billion last year, with China as Russia’s largest individual partner in both exports and imports. Moscow has also emerged as the largest supplier of crude oil, and is planning to supply 38 billion cubic metres of gas annually for three decades via the Power of Siberia pipeline in an agreement worth US$400 billion.
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