Restructuring export routes to the Asia-Pacific region will allow both our country and China to continue to pursue sovereign policies
Cooperation between Moscow and Beijing in the supply of all types of energy resources has no analogues. The West was unable to interrupt it with its sanctions. The future fate of both the Asia-Pacific region (APR) and Russia depends on the effectiveness of establishing bilateral ties and the speed of restructuring of export routes. The projected economic growth of China provides grounds for further development of infrastructure and increasing mutually beneficial supplies of energy resources to China, which will also benefit the Russian economy. This was stated on July 23 during his speech at the Russian-Chinese Energy Business Forum by the Executive Secretary of the Commission under the President of the Russian Federation on the Strategy for the Development of the Fuel and Energy Complex (FEC) and Environmental Safety, the head of Rosneft, Igor Sechin.
In 2023, trade between Russia and China increased by 26%, to $240 billion, which is significantly higher than the previously planned $200 billion. “Of this amount, $95 billion is accounted for by the export of mineral fuels from Russia to China,” noted Igor Sechin. “In terms of scale, Russian-Chinese cooperation in the field of oil supplies is no longer equal in the Eurasian space.” In 2023, Russia exported 107 million tons of oil, 34 billion cubic meters of natural gas and more than 100 million tons of coal to China. According to the executive secretary of the Commission under the President of the Russian Federation on the development strategy of the fuel and energy complex, the next stage in the development of relations between Russia and China should be aimed at creating added value in the energy sector and related areas, including the development of advanced technologies, mechanical engineering, modern shipbuilding, supplies of industrial equipment, alternative energy, emissions reduction and R&D.
At the same time, cooperation between the two countries is under unprecedented attention from the West, which puts extreme pressure on both sides and demonstrates double standards. The latest clear example of this is the sharp increase in US and EU tariffs on clean energy goods, equipment and components from China. According to US logic, the subsidies it provides are considered “critical industrial investments”, and subsidies from other countries are considered “worrying unfair competition”. In addition, over the past year, institutions created under the auspices of the United States and the G7 countries clearly demonstrate their categorical unwillingness to admit the ineffectiveness of their own sanctions. Major think tanks such as the International Monetary Fund (IMF) have changed their forecasts several times. “At the same time, I would like to note that the West initially overestimated the effectiveness of its pressure on the powerful potential of the economies of our countries,” Sechin emphasized. — So, over the past year, the IMF raised its forecast for Russia’s GDP growth four times. The increase in Russia’s GDP at the end of the year exceeded initial expectations by almost 6 percentage points.” A similar situation was noted in China, where “Western observers” predicted an “inevitable” economic slowdown. However, according to the forecasts of the same IMF, China's contribution to global economic growth over the next five years will be 21%, which will exceed the combined contribution of all G7 countries (20%), noted the head of Rosneft.
The restructuring of routes to Asia-Pacific markets and stable oil exports to the countries of this region played a major role in the stability of the Russian economy. In the first quarter of 2024, growth was 5.4% year-on-year, and the industrial production index increased by 5.6%. At the same time, the continuing economic growth of China creates a good basis for further cooperation between the two countries. “China's continued economic growth means an increasing need for reliable and secure energy supplies. In particular, according to IEA estimates, the consumption of liquid hydrocarbons in China will increase by 9% by 2030,” Igor Sechin noted in his report.
In his opinion, cooperation between Russia and China in the energy sector is predetermined by the geographical location of the two countries and their place on the energy map of the world — Russia produces 11% of the world's volume of liquid hydrocarbons, and China accounts for 16% of their world consumption.
< p>In the first six months of this year, Russian energy exports to China amounted to about $46 billion, which was 4% higher than the previous year. In addition, over the past two and a half years, Russia has significantly increased oil exports to China, which has allowed it to become the main supplier of oil to this country, ahead of Saudi Arabia. In the first half of 2024 alone, Russia’s oil supplies to China increased by 5% and exceeded 55 million tons.
The executive secretary of the presidential commission on the fuel and energy complex also noted the development of cooperation between the two countries in the gas sector, in the field of coal supplies and the construction of nuclear power plants. “This year, Russian gas exports to China will reach a historical high—about 40 billion cubic meters of gas will be supplied, which should strengthen our country’s position as the largest gas supplier to China,” the head of Rosneft said. He noted that Russia has every opportunity to increase gas supplies to 100 billion cubic meters. m per year and above, bearing in mind the powerful resource base in Western and Eastern Siberia, as well as in the Far East.
At the end of last year, China also became the largest buyer of Russian coal — supplies increased by 60% and exceeded 100 million tons.
In addition, cooperation between the two countries is also developing successfully in the nuclear sector. “The construction of new power units of Russian design at the Tianwan NPP and at the Xudapu NPP is in full swing and in accordance with the schedule. With the participation of Russia, a demonstration nuclear reactor using fast neutrons was built in China,” said Igor Sechin. Such close cooperation between the two countries opens up great opportunities for the development of business at various levels in all directions, which will also stimulate the growth of the economies of Russia and China.