Chinese President Xi Jinping is meeting with his Russian counterpart Vladimir Putin on a three-day visit aimed at boosting Beijing-Moscow ties and cementing China’s status as a global powerbroker.
After helping to arrange a detente between Saudi Arabia and Iran earlier this month, Xi is using the trip to promote a 12-point peace plan to resolve the war in Ukraine — a proposal Putin reportedly said he views “with respect”.
With Xi’s peace plan receiving a lukewarm response in Kyiv and Washington, however, the Chinese leader is more likely to have success shoring up economic cooperation with Putin, which has deepened amid the growing isolation of Moscow.
“Xi’s trip to Russia is mainly about maintaining closer Sino-Russian relations in the post-pandemic era when both powers are experiencing hard times,” Edward Chan, a postdoctoral fellow at the Australian Centre on China in the World, told Al Jazeera.
“It is fair to expect China and Russia will have a tighter bonding economically and diplomatically,” Chan added.
Here are the key economic areas Xi and Putin are likely to focus on for greater cooperation.
Russian energy
China has emerged as a major buyer of sharply discounted Russian oil and gas as Western buyers have banned energy imports.
Russia was China’s top oil supplier in January and February at 1.94 million barrels per day, up from 1.57 million in 2022, according to Chinese customs data. Russia’s crude oil exports to China are also up, growing 8 percent in 2022 to 1.72 million barrels per day.
China’s imports of Russian pipeline gas and liquefied natural gas last year jumped 2.6 times and 2.4 times, respectively, to $3.98bn and $6.75bn.
Meanwhile, China’s imports of Russian coal surged 20 percent to 68.06 million tonnes.
The surging energy sales have provided Russia’s economy, which shrank a less-than-expected 2.1 percent last year, a much-needed lifeline in the face of sanctions. Besides China, other top buyers of Russian energy include India and Turkey, who have taken advantage of a punitive price cap on Russian oil to access cheaper energy. Analysts expect sales to continue to go up as the war in Ukraine shows no sign of ending.
Imports of Chinese goods
Shortly before Russia’s invasion of Ukraine, China and Russia announced a “no limits partnership”. Much of that has manifested in trade.
While Russia has been selling energy to China, Russia has been ramping up imports of Chinese goods, including machinery, electronics, base metals, vehicles, ships and aircraft.
China’s exports to Russia hit $76.12bn in 2022, up from $67.57bn the previous year, according to Chinese customs data.
An exodus of Western brands from Russia has been a boon for Chinese industries such as automaking, with China’s Geely Automobile Holdings, Chery Automobile and Great Wall Motor taking 17 percent of the Russian market last year.
Overall, bilateral trade between the two sides grew by nearly one-third last year to about $190bn and is likely to continue to grow. Their economic relations, however, are imbalanced.
While China is Russia’s most important economic partner, trade between the two is dwarfed by China’s trade with the Association of Southeast Asian Nations, the European Union and the United States, according to customs data. Trade between these top three trading partners in 2022 was valued at $947bn, $821bn, and $734bn, respectively, according to government data.
Ahead of his trip to Moscow, Xi published a lengthy signed letter in the Russian Gazette calling for greater economic cooperation, investment, and two-way trade.
De-dollarisation of Russia
Russia’s economy was temporarily crippled in the early days of the Ukraine invasion by Western moves to freeze the assets of Russia’s central bank and Russian commercial banks, cut off Russian financial institutions from the international payments system SWIFT, and the departure of Western banks and credit card companies.
With Russia iced out of the dollar-dominated international financial system, the Chinese yuan and cryptocurrency have stepped into the void. The share of yuan-based transactions grew from 0.4 percent to 14 percent of the total in a nine-month period, according to the Carnegie Endowment for International Peace. In September, two Russian banks began to lend in yuan and also use the currency for money transfers in lieu of SWIFT.
Russia’s growing reliance on the yuan saw the country in October become the fourth-largest offshore trading centre for the Chinese currency.
Amid dwindling dollar reserves due to sanctions, Russia’s central bank in January sold $47m worth of yuan to make up for gaps in its budget from lower oil and gas revenues.
Swapping the dollar and euro for the yuan may be an effective short-term solution, but it will make Russia more financially dependent on China, Alexandra Prokopenko, a visiting fellow at the German Council on Foreign Relations, said in a recent article for the Carnegie Endowment for International Peace.
“The de-dollarization of the economy, which the Russian authorities are so proud of, essentially translates into ‘yuanization.’ Russia is drifting toward a yuan currency zone, swapping its dollar dependence for reliance on the yuan,” Prokopenko said. “This is hardly a reliable substitution: now Russian reserves and payments will be influenced by the policies of the Chinese Communist Party and the People’s Bank of China. Should relations between the two countries deteriorate, Russia may face reserve losses and payment disruptions.”
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
