18 June 2022

Russian-Chinese Business Council: PRC is not afraid of Western sanctions

Evgeny Markin on the sidelines of SPIEF shared with NEWS.ru his views on Chinese investments, payments in yuan and Eastern secrets of doing business

— China has аn ambivalent position regarding sanctions from the West and conflict in Ukraine. On the one hand, Beijing declares its support of Moscow and its actions. On the other hand, many Chinese companies started being more careful with the Russian partners. Do the members of RCBC feel the ambiguity in their own business?

— China has never endorsed Western sanctions against Russia in the United Nations or any other international organization. On the contrary, China is always supporting Russia in diplomatic sphere, emphasizing the validity of the special military operation in Ukraine. Ministry of Foreign Affairs of PRC fully supports Russian struggle with Nazism, because China has also suffered from this world evil. Therefore we have absolute unity of opinions. All speculations about some misunderstanding between Russian and Chinese business circles which appeared as a result of a special operation are purposefully made up by our Western ill-willers.

— So big politics does not interfere with Russian-Chinese economic relations?

— Russian-Chinese Business Council is a business structure which has undoubtedly patriotic position. From our side we implement this position in strengthening economic ties with our neighbor which we share 4000 km border with. And I cannot see that anybody from the Chinese side is afraid to do business with Russia although we sometimes see such assumptions even in Chinese Internet. But these provocative ideas are tossed by the USA in order to break our unity. The West realizes that the current situation has united us, but no one can ever split Russia and China.

— Can you in all sincerity say that both your Chinese colleagues and business partners all have the same point of view?

— Of course there are some Chinese large corporations both private and state which started being more careful about the bilateral projects including those which we had previously agreed upon before the Western sanctions were imposed. But Chinese companies on lower levels: second, third, fourth are coming to Russia willingly and are building cooperation with the regions providing the import substitution which Russian economy needs when the Western market is closed. We see no problems in advancing and developing our cooperation. Moreover, after the beginning of the special operation the trade volume increased to 20% just in a few months.

— Despite all the efforts of the Central Bank of Russia and Government to transfer payments into the national currencies, the lion’s share of foreign trade is still in US dollars. We can notice that the volume of ruble – yuan pair trade at MICEX was insignificant even at the best years. Have there been any changes after the Central Bank limited foreign trade operations in dollars and euro? 

— Yes, there are changes, and they are in the right direction. More and more Russian large companies including extracting and constructing ones are opening their accounts in yuan and the payments are transferred without any constraints.

— However in practice everything is not so smooth. For example, in the beginning of June Chinese aviation authorities decided to forbid Russian aviation companies to fly to the Chinese airports. Doesn’t it prove that the Chinese “write one and carry two over” – they support Russia, but in fact they join anti-Russian sanctions, even if it was not by choice?

— In the end of March we organized the meeting of the representatives of the Chechen Republic with the Chinese Ambassador in RF Zhang Hanhui, bearing in mind that the Chechen Republic is a good platform for the Chinese investments projects. And this question was also discussed there. We do not deny that not everything is “smooth”. But we have to understand that the prohibition for the Russian airplanes was caused not by the lack of desire to cooperate with Russia, but by the rules of the international commerce flights and in particular, conditions of the insurance companies with are beyond the jurisdiction of China and Russia. The bright side is that this situation motivates us to create and develop logistics schemes fully independent from the external factors. For example, we want the flights to and from Russia to be carried out by the Chinese airlines, the aircrafts and cargo to be insured by the Chinese companies and so on. The final configuration will depend on the commercial interests of particular companies.

— If I understood correctly, anti-Russian sanctions appeared to be even more favorable for the Russian businessmen who have oriented their business to Chinese and Asian market as a whole in advance…

— Not only they, but also those companies which were able to adapt quickly in the changing situation. One of the key roles of RCBC is to support  our national businessmen during such adaptation. We have got both the instruments and specialists – Russian and Chinese. In fact, according to our experience reorientation of businesses from the Western to the Chinese market is not a very difficult process. RCBC is a platform for the smooth and fast switch from doing business in Western style to the Eastern mentality. The main thing that helps us is a full trust between the Russian and Chinese partners, which in the current conditions is building up daily.