Moscow’s High Interest Rates and Anti-Migrant Moves Slowing Growth in Trade with China Dramatically, Usov Says

Paul Goble
    Staunton, Jan. 2 – Bilateral trade between Russia and China grew only 2.1 percent during the first 11 months of 2024, down from an increase of 26.7 percent during the corresponding period in 2023, a decline that reflects Moscow’s use of high interest rates to fight inflation and its anti-immigrant stance, according to Pavel Usov.
    The Belarusian economist in Warsaw says other factors, including sanctions, played a role but that high interest rates have Russia less attractive to investors than China itself where rates are far lower and Russian attacks on migrants have made it less attractive for Chinese to work (eastrussia.ru/material/do-kitaya-daleko-i-blizko-perspektivy-i-riski-biznes-partnerstva/).
    Usov’s report highlights the interconnected nature of Moscow’s policies and the way in which its pursuit of some is putting its relationship with China at risk, at least in the coming year or two. It helps explain why the Kremlin has defended migrants in recent weeks and opposed further interest rate increases. But for domestic reasons, it can’t afford to do either for long.  
    And that combination leaves Putin in an increasingly difficult position, one in which his pursuit of one set of economic and political goals will undercut his ability to achieve others.