China's Exports to Russia Plummet... Putin's May Visit to China Expected to Discuss Trade Strengthening

Last month, China's exports to Russia showed a decline compared to the previous year for the first time in about 1 year and 9 months.

On the 16th, Bloomberg News reported, citing data from the General Administration of Customs of China, that China's exports to Russia in March decreased by 16% compared to the same period last year. It explained that this occurred "amid increasing U.S. threats of retaliation over support for Russia's invasion of Ukraine."

[Image source=Yonhap News]

Bloomberg, citing sources, added, "President Vladimir Putin may mention the need to strengthen trade volume during his visit to China next month to meet with Chinese President Xi Jinping," and "the Russian side views the decline in trade volume as temporary."

According to major foreign media, President Putin, who secured a fifth term in last month's presidential election, is scheduled to visit China as his first overseas trip in May and meet with President Xi. Putin's inauguration is expected on May 7. The most recent meeting between the two leaders took place in October last year during the Belt and Road Forum held in Beijing, China. If Putin's visit to China in May materializes, the two leaders will meet for the first time in seven months.

Trade between Russia and China has shown steady growth despite the outbreak of the Ukraine war and the resulting pressure from Western sanctions. Thanks to China's imports of Russian oil and exports of automobiles, industrial equipment, and electronic products to Russia, the trade volume between the two countries reached $240 billion (approximately 333.576 trillion KRW), a sharp increase of 26% compared to the previous year.

However, trade with Russia, which faces sanction pressures, is gradually stagnating. Bloomberg also reported that Turkey is in a similar situation, with Russia's total imports last month decreasing by 18% compared to the same period last year.

Alexander Isakov, a Russia economist at Bloomberg Economics, said that the U.S. sending stronger signals about the risk of secondary sanctions related to Russia "means that resolving trade issues will take longer and Russian importers will increasingly have to rely on Central Asian countries to revitalize trade."

Earlier, Russian Foreign Minister Sergey Lavrov visited Beijing on the 9th and met with President Xi. The Russian Foreign Ministry stated, "At this meeting, President Xi highly evaluated the relationship between Russia and China and emphasized that he is ready to further develop the comprehensive partnership and strategic cooperative relationship."

Earlier this month, U.S. Treasury Secretary Janet Yellen, during her visit to China, warned that "Chinese banks supporting the sale of military or dual-use goods to Russia could face U.S. sanctions." In December last year, the U.S. Treasury Department announced secondary sanctions on banks facilitating transactions for semiconductors, ball bearings, and other equipment necessary for Russian military use.