The Chinese vector of development of the customs policy of the Russian Federation: opportunities and threats
The article points to the main changes in Russia's customs policy caused by sanctions in the period from 2014 to 2022. It is noted that the increasing sanctions pressure caused a reorientation of Russia's foreign trade relations to China. Prospects for deepening trade and economic ties and increasing customs cooperation between Russia and China have been identified, however, the possibility of a number of negative consequences, such as weakening incentives for the development of domestic production and technological industries, is noted. Customs regulation is recognized as an effective tool for balancing Russia's economic interests in the context of increased trade and economic cooperation with China.
Keywords: customs policy, foreign trade, sanctions, diversification.
Customs policy has a direct impact on the country's economic activity, especially in the field of international trade. The analysis of changes in customs policy makes it possible to assess the effectiveness of measures and tools used to regulate trade, protect domestic producers, stimulate exports, etc., and also opens up opportunities for more effective planning and forecasting of economic activities of the state and responding to changes in the global economy.
In the context of the intensification of anti-Russian economic policy on the part of many Western states, the foreign trade strategy of the Russian Federation (RF) has largely shifted to the East. Among the main trading partners of Russia in the new economic and political reality, China occupies a special place, trade with which is growing rapidly. Taking into account the significant opportunities for the Russian Federation to import substitution of goods from China, it is necessary to take into account the high risks of deepening trade and economic cooperation between the countries. In this situation, customs policy (measures of customs regulation of export-import relations between Russia and China) is becoming particularly relevant as a tool for regulating mutual trade and protecting the economic interests of the Russian Federation.
In connection with the above, the purpose of the study in the framework of this article is to identify threats and opportunities for further development of the customs policy of the Russian Federation in trade with China. At the same time, it is necessary to consider the concept and essence of the customs policy of the state, determine the impact of trade and economic restrictions (sanctions) on the customs policy of the state, assess the dynamics of mutual trade between Russia and China in 2013-2022, identify opportunities and threats to deepen trade and economic cooperation between Russia and China.
Customs policy is a set of measures and actions implemented by the State in relation to the import, export and transit of goods across its customs borders <1>. It is an important instrument of state regulation of foreign economic activity and aims to ensure the economic, social and political interests of the country.
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<1> Compiled by the author based on the analysis of scientific and practical approaches to understanding customs policy.
The main objectives of customs policy include protecting the national economy and industries from unwanted competition, ensuring state security, regulating the balance of payments, supporting exports and promoting foreign trade relations. When developing customs policy, both national interests and international obligations and agreements, including customs unions, free trade zones and other international organizations, are taken into account <2>.
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Gordeeva D.V., Glekova V.V. Customs policy as a priority direction of the state policy of Russia // State and municipal management in the XXI century: theory, methodology, practice. 2015. N 18. P. 25.
Customs policy may change under the influence of sanctions, which are an instrument of economic and political pressure from one state on another. It is important to note that the reaction to sanctions and changes in customs policy are unique for each country and depend on the political and economic goals of the state. Russia, for example, may impose counter-sanctions or take measures to diversify its foreign trade partners and markets in order to mitigate the negative effects of sanctions <3>.
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<3> Chan Ya., Ostanin V.A. Customs policy of Russia in the context of global turbulence of world commodity markets // Fundamental research. 2022. N 6. P. 69.
Changes in customs policy during the period of sanctions require careful analysis and planning on the part of the state and the business community in order to adapt to new conditions and find optimal ways to develop foreign economic activity.
After the imposition of sanctions against the Russian Federation in 2014, the country's customs policy changed in order to adapt to new conditions and mitigate the negative impact of restrictive measures. Among the main changes in the customs policy of the Russian Federation caused by the sanctions policy of 2014-2022, it can be noted:
1) the introduction of counter-sanctions: Russia, in response to sanctions from other countries, has taken measures, including the introduction of bans on the import of certain goods and food from sanctioning countries;
2) diversification of trade partners: Russia is actively working to diversify its foreign trade partners and develop new markets: search for alternative suppliers of goods and buyers, expand trade relations with other countries and form new economic partnerships;
3) development of domestic production: in response to sanctions, Russia stimulates the development of domestic production and import substitution aimed at reducing dependence on imports from unfriendly countries and ensuring stability of the domestic market (the customs policy of the Russian Federation in this case includes measures to support domestic producers, the introduction of customs privileges or subsidies, etc.) <4>;
4) changing tariff rates: The Russian Federation, within the framework of regulating customs policy, makes changes to tariff rates for the import and export of goods, which are usually aimed at regulating foreign trade, protecting domestic producers or stimulating the export of competitive products <5>;
5) Improving customs procedures: in order to facilitate foreign trade operations and reduce bureaucratic barriers, Russia is doing significant work to simplify and automate customs processes, introduce electronic systems and reduce administrative barriers to trade with the most promising partner countries (for example, China).
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<4> Kostenko R.V. Customs policy of Russia, goals and methods of its implementation // Bulletin of Modern Research. 2018. N 12.12(27). p. 219.
<5> The main directions of budget, tax and customs tariff policy for 2023 and for the planning period 2024 and 2025 (approved by the Ministry of Finance of the Russian Federation). Point 1.
It is important to note that Russia's customs policy is constantly changing and adapting to new challenges and conditions. The main trend in the process of transformation of Russia's customs policy under the current political and economic constraints is the diversification of trading partners. A significant part of Russia's foreign trade relations with the United States, Western countries and other countries that have supported the sanctions regime is currently being reoriented to the East and implemented in cooperation with China.
An analysis of the dynamics of mutual trade between Russia and China demonstrates their rapid growth. It is noteworthy that the total volume of trade between Russia and China in the period from 2013 to 2022 increased from 89.3 billion dollars <6> to 190 billion dollars <7>. Since 2015, there has been a slight decline ($68 billion) <8>, but after that the trend became positive again.
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<6> Federal Customs Service of Russia: the results of foreign trade with the main countries.
<7> Foreign trade: Russia, China, the Far East: a study of the Eastern Center for State Planning of the Far Eastern Federal University. Moscow, 2022. pp. 12-13.
<8> Federal Customs Service of Russia: the results of foreign trade with the main countries.
In recent years, there has been a steady growth in mutual trade, especially noticeable in 2021 ($145.7 billion) and 2022 ($190 billion). These data indicate a gradual increase in economic cooperation between Russia and China. The increase in trade volume may be due to the development of mutual investments, the expansion of trade relations, the signing of new agreements and cooperation in various sectors, including the customs sphere.
The growth rate of mutual trade between Russia and China is not static. In 2014, there was an increase of 6.72%, followed by a significant decline of 28.70% in 2015. In the following years, trade began to grow again, with growth rates of 2.79% in 2016, 20.94% in 2017, 26.51% in 2018 and 3.74% in 2019. In 2020, there was a slight decrease in trade volume by 2.97%, but in 2021 there was a significant increase of 35.44%. In 2022, the growth rate was 30.39%.
The largest decrease in the volume of mutual trade between Russia and China was noted in 2015. This year, the volume of trade amounted to 68 billion US dollars, which is a significant decrease compared to previous years. This decrease may be due to various factors, including economic and political conditions, changes in trade policy and other external influences, including:
1. Economic downturn: in 2015, both countries faced economic problems: Russia - with falling prices for oil and other commodities, which negatively affected exports; China - with slowing economic growth and structural problems.
2. Geopolitical factors: in 2015, tense relations arose between Russia and the West in connection with the crisis in Ukraine and the imposition of sanctions, which had an impact on the volume (downward) of Russian production and exports, which partially caused a drop in mutual trade turnover between Russia and China.
3. Currency factors: In 2015, the Russian ruble depreciated significantly as a result of economic and political events, which had an impact on the value and volume of trade between Russia and other countries, including China.
4. Structural changes: in 2015, there were structural changes in the economic interaction between Russia and China, due to the redistribution of commodity flows.
In turn, the sharp increase in mutual trade between Russia and China in 2020 - 2022 is due to the following factors:
1. Recovery from the COVID-19 pandemic: in 2020, the global economy faced serious consequences of the pandemic, but with the gradual recovery of economic activity in 2021, trade between countries also began to recover.
2. Development of economic cooperation: Russia and China continue to actively develop trade and economic ties and strengthen cooperation in various sectors. Thus, after 2020, new trade agreements, agreements on customs cooperation, expansion of commodity flows and an increase in mutual trade were signed <9>.
3. The increase in mutual demand, partly due to the effect of anti-Russian sanctions: Russia and China are large economies with large markets, and the increase in mutual demand for goods and services between these countries contributes to the growth of trade turnover.
4. Deepening investment ties: Russia and China are actively developing investment ties, including joint projects, joint ventures and investment attraction, which has a stimulating effect on the volume of mutual trade.
5. Strengthening trade ties within the framework of international initiatives: Russia and China are actively involved in international initiatives, such as the Silk Road Economic Belt. These initiatives contribute to the development of trade relations and infrastructure between the two countries.
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<9> Protocol between the Federal Customs Service (Russian Federation) and the General Customs Administration of the People's Republic of China on Mutual Recognition of the status of an Authorized economic operator (signed in Moscow, Beijing on February 4, 2022)..
Increasing customs cooperation with Asian countries provides Russia with a number of opportunities and benefits, the most significant of which are <10>:
1. Expanding sales markets: strengthening customs cooperation with Asian countries allows Russia to gain access to new sales markets for its goods and services, which contributes to the development of exports and an increase in trade with Asian partners.
2. Development of economic ties: customs cooperation contributes to strengthening economic ties between Russia and Asian countries, which can lead to an increase in mutual investments, the development of joint projects and the strengthening of trade and economic cooperation.
3. Improving the conditions of mutual trade: customs cooperation agreements contribute to the reduction of customs duties, simplification of customs clearance procedures and reduction of bureaucratic barriers, which creates more favorable conditions for conducting foreign economic activity and stimulates the development of international trade.
4. Transit opportunities: Russia, being a geographical bridge between Europe and Asia, can use customs cooperation with Asian countries (including China) to develop transit traffic, which is an important tool in developing logistics infrastructure, creating transport corridors and strengthening Russia's position as a transit hub.
5. Exchange of experience and transfer of knowledge: the development of customs cooperation with Asian countries provides an opportunity for the exchange of experience, transfer of knowledge and best practices in the field of customs administration, which contributes to the professional development of customs officials, improving the quality of services provided and improving customs procedures.
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<10> Verigo S.A., Panina E.A. Customs cooperation between Russia and the People's Republic of China in the context of modern bilateral trade // Economics: yesterday, today, tomorrow. 2019. N 3A. pp. 290 - 291.
The development of customs cooperation with Asian countries represents significant potential for Russia's economic growth and development, opening up new opportunities for trade, investment and cooperation at the international level. In the current political and economic situation, Russia's customs cooperation with China is one of the most effective tools for regulating the country's export-import potential, and also allows creating conditions for further development of the manufacturing sector and increasing economic stability.
At the same time, the active expansion of trade and economic cooperation with China is fraught with some threats:
1. Excessive competition in the domestic market: it is often difficult for Russian companies to compete with Chinese manufacturers who offer high-quality products at lower prices. This problem is not new, and as a negative consequence for the Russian Federation, it implies a decrease in the share of Russian manufacturers in the domestic market of the country and the threat of their uncompetitiveness.
2. Dependence on the Chinese economy: By expanding trade and economic ties with China, Russia may become dependent on the state and policies of the Chinese economy. This may be accompanied by the risk of losing control over one's own economy and vulnerability to external factors <11>.
3. Trade imbalance: if imports of goods from China exceed exports of Russian goods to China, there is an imbalance in trade, which can negatively affect Russia's balance of payments and increase the country's external debt.
4. Technological dependence: strengthening trade ties with China may lead to an increase in Russia's technological dependence on Chinese companies, which, in turn, creates the risk of losing control over its own technologies and innovations.
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<11> Arashkevich O.V. Development of China's trade and economic relations with the EAEU countries: trends, problems and ways to solve them // Economy. Business. Finance. 2023. N 3. P. 5.
It is important to note that the threats considered are not exhaustive, but reflect only a part of the possible challenges that Russia may face in the process of developing trade and economic cooperation with China.
Thus, the increasing sanctions pressure on the Russian economy has caused a significant reorientation of the country's foreign trade relations to the East, where China is the main partner.
Among the prospects for further deepening trade and economic ties and increasing customs cooperation between the countries, the possibility of import substitution in the production, technological and technical spheres, increasing transit potential and exports are particularly relevant for Russia.
At the same time, excessive expansion of customs and other economic cooperation between the Russian Federation and China may weaken incentives for the development of its own manufacturing, technological and knowledge-intensive industries, which will certainly affect the possibilities of further economic development of the country.
Under the current conditions, customs regulation is becoming one of the most effective and direct tools for regulating the balance of economic interests of the Russian Federation in the context of increased trade and economic cooperation with China.
