China’s Xinjiang-Russia trade rose 374% in 2014

Resource-rich Xinjiang remains a critical part of China’s economic strategy [Xinhua]

Trade between China’s restive far-western Xinjiang and Russia grew more than threefold last year amid a slowdown in the region’s foreign trade due to falling commodity prices, China’s official customs statistics body said on Saturday.

Resource-rich Xinjiang’s trade with Russia rose a whopping 374 per cent year on year in 2014 to $2.15 billion, compared with a 0.4-per cent rise in total Sino-Russian foreign trade to $27.67 billion during the same period.

The Chinese region of Xinjiang borders eight countries, including Russia and Afghanistan. The Chinese government has been battling a growing threat of Islamist militants in the region.

The China-Russia slowdown in overall trade volume is mostly a result of shrinking imports, which saw a 20.9-per cent drop to $4.19 billion last year, China’s statistics body said. Exports rose 5.5 per cent year on year to $23.48 billion.

Falling commodities prices are fueling the decline as crude oil and minerals account for the majority of Xinjiang’s imports. Crude oil and iron ore sand, whose prices fell 18.4 and 21 per cent respectively, accounted for 53.8 per cent of Xinjiang’s total import volume last year.

Trade with Xinjiang’s largest partner, Kazakhstan, with whom the region also shares the border, was down 17.3 per cent to $10.13 billion.

Li Bin, a customs official at Xinjiang’s capital Urumqi, said Xinjiang’s trade growth this year will be underpinned by upcoming policies from local and central governments supporting the rejuvenated Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives of Chinese President Xi Jinping.

Over the past year President Xi Jinping has spelled out ambitious plans to open China’s west and build a “New Silk Road” network of intercontinental land routes and maritime lines that would connect China to its Central and Southeast Asian neighbours. He announced a $40 billion fund to invest in infrastructure projects earlier in November.

Meanwhile, China’s Foreign Minister has, in December, pledged support to Russia as it faces an economic downturn due to sanctions and a drop in oil prices. Boosting trade in yuan is a solution proposed by Beijing.

“Russia has the capability and the wisdom to overcome the existing hardship in the economic situation,” Foreign Minister Wang Yi said. “If the Russian side needs it, we will provide necessary assistance within our capacity.”

 

TBP and Agencies