Beijing Exploiting Situation where Moscow has No Choice but to Discount Prices on Goods China wants to Buy and Pay Higher Prices on Those China wants to Sell

Paul Goble

            Staunton, Dec. 29 – The Kremlin is celebrating the growth in bilateral trade between Russia and China, but it fails to mention that this has been achieved only because not having any other alternative, Moscow has been giving Chinese significant discounts on what Beijing wants to buy and paying higher prices for goods Beijing is ready to sell.

            The Chinese recognize that Russia has no choice but to put up with this and so are profiting by it, demanding ever higher discounts on Russian raw materials China wants to purchase and raising prices on goods like automobiles that Russia wants to buy  (thinktanks.by/publication/2023/12/29/pochemu-kitay-ne-okazalsya-spaseniem-dlya-rossiyskoy-ekonomiki.html and kommersant.ru/doc/6428548).

            But this situation not only is angering Russian firms and Russian consumers but is placing real limits on any future growth in bilateral trade because there are limits to how far Russian sellers are prepared to cut prices for the Chinese and how much China can raise prices on goods Russians want before the latter will refuse to pay.

            Consequently, not only are the benefits of this trade mostly one-sided but the growth in the size of this exchange is profoundly limited. Indeed, some experts are now saying that there will be a slowing in the growth of such trade even this year and that it may cease to grow at all in the future.