China Fills Void as Foreign Brands Flee Russian Market During War

[beijingwalker]

2% of Chinas total export goes to Russia, while about 50% goes to countries sanctioning Russia. Meanwhile China is Russias main export marked.
Why would China risk its main export marked to help Russia out of a situation they basically not support.

If the west can afford decouple from China, they'd have done it long time ago.

 

[MeFishToo]

If the west can afford decouple from China, they'd have done it long time ago.

It goes both ways, doesnt?

 

[Yongpeng Sun-Tastaufen]

It goes both ways, doesnt?

China does not need the West. Before the 90s China exported nothing to the West and was just fine. It was the West which needs China for cheap labor force.

 

[beijingwalker]

It goes both ways, doesnt?

The trade is massively in China's favor, why China needs to decouple?

 

[MultaniGuy]

China Fills Void as Foreign Brands Flee Russian Market During War​

• Chinese vehicles were 81% of new car imports last quarter
• War in Ukraine has accelerated Russia’s tilt toward Asia

Bloomberg News
August 30, 2022, 4:00 PM UTC

Chinese cars, televisions and smartphones are replacing German and South Korean imports in Russia as its market is reshaped by sanctions and an exodus of brands in the wake of Vladimir Putin’s invasion of Ukraine.

The result is upending trade, with Russia seeking to insulate itself from further disruptions by pivoting to goods from countries that haven’t joined sanctions imposed by the US and its allies. Moscow is also rewriting rules to allow its sovereign wealth fund to invest in the currencies of China, India and Turkey, after penalties blocked euro and dollar purchases.

“Apart from Chinese cars, there is nothing out there at all,” said Vladimir, a metals industry executive who bought a new Chery Automobile Co. Tiggo SUV in Moscow this month. He declined to give his last name.

“Still, there’s a decent amount of choice and, surprisingly, the cars are very good,” he said.

The war has accelerated Russia’s tilt toward Asia, with shifts that had previously taken years happening in months. The transformation draws a line under a process begun near the start of Putin’s more than two-decade rule, with similar changes sweeping the economy from the banking sector to energy sales.

Sales of Great Wall Motor Co. and Geely Automobile Holdings Ltd. vehicles held steady in July, even as the auto market collapsed by 75% compared to a year earlier, propelling their brands into the ranks of best-selling cars. Last quarter, 81% of new car imports were Chinese, compared with 28% in the first quarter, according to Avtostat data.

The Russian central bank said in an Aug. 24 report that business sentiment in the auto trade turned positive for the first time since the February invasion as the market shifted from European producers to Asian cars.

Samsung Dethroned​

The smartphone market has also shifted in China’s favor, with Apple Inc. and Samsung Electronics Co. suspending shipments. While their products are available via parallel, or gray, imports that don’t have the manufacturers’ blessing, such sales can put off consumers because they are more expensive and not under warranty.

Xiaomi Corp. was Russia’s best-selling smartphone maker in the second quarter, dethroning Samsung, and three of the top five brands were Chinese, according to Mobile TeleSystems PJSC, the country’s biggest mobile operator.

“There is a redistribution going on,” said Alexey Zaitsev, the head of e-commerce platform Ozon Holding Plc’s telecommunications division. “We are seeing increased demand for Android smartphones of Chinese brands.”

Demand for Chinese television sets nearly doubled after the invasion as Japanese and Korean companies stopped shipments, Izvestia newspaper reported last month, citing online retailers.

The boom comes as retail sales have suffered their worst crash since the coronavirus pandemic, shrinking close to 10% each month on an annual basis in April-June. Spending by households in Russia accounts for more than half of gross domestic product.

Yuan Trading​

Trade with Beijing was rising even before the war, and China supplying about 25% of Russia’s total imports last year. Yet the relationship is asymmetrical, with the Russian market accounting for 2.3% of Chinese exports.

Moscow needs the supplies more than ever as its consumers facing a future with fewer choices. Russia bought $6.7 billion of goods last month from China, up by more than 20% from a year earlier. Bilateral trade, fueled by higher energy prices, could grow by more than a third to $190 billion in 2022, Tass reported Aug. 17, citing a Russian official.

With China an ever-more essential partner, yuan trading has risen more than 40-fold on the Moscow Exchange so far this year and “has now started to dominate trading in other more traditional currencies,” according to Ivan Tchakarov, Citigroup’s chief economist for Russia.

More Chinese companies are figuring out how to import into Russia without running afoul of sanctions, according to Boris Kopeikin, an analyst at the Center for Strategic Research, a Moscow-based think tank.

“The pace is picking up and by the end of the year we will see much wider choice of Chinese goods,” Kopeikin said.

China Fills Void as Foreign Brands Flee Russian Market During War

Chinese cars, televisions and smartphones are replacing German and South Korean imports in Russia as its market is reshaped by sanctions and an exodus of brands in the wake of Vladimir Putin’s invasion of Ukraine.

www.bloomberg.com

Was this hardly surprising?

When the West ran away from Pakistan as well, China right away filled the void in almost everything.

I am looking forward to seeing Sinopec working in Pakistani Oil Refineries as well.

 

[INS_Vikrant]

When the West ran away from Pakistan as well,

When did that happen?

 

[MH.Yang]

You are delusional that’s not one sided. dependency is mutual. What happens if the west and China go to full trade war?
I tell you for Germany, the biggest economy in Europe: 0.81 percent of GDP of Germany.
That is expected loss if Germany and China go head to head to trade war.
Germany will suffer however not collapsing as you believe.

The question is that China has always respected Germany very much. Why do you think that a trade war will break out between the two sides?

The economies of China and Germany are complementary, and there is not much competition between the two sides in many fields. Germany is not an Anglo Saxon country and has no historical hatred with us. We are not interested in starting a meaningless trade war.

2% of Chinas total export goes to Russia, while about 50% goes to countries sanctioning Russia. Meanwhile China is Russias main export marked.
Why would China risk its main export marked to help Russia out of a situation they basically not support.

We did not help Russia.

The Chinese people abide by international law and do not sell weapons to the belligerents. China also does not recognize Russia's sovereignty over Crimea and other regions.

However, China does not support NATO's sanctions against Russia for normal trade.

China is not a member of NATO. If you want China to participate in the sanctions, please submit the sanctions proposal to the UN Security Council.

As long as it can pass the Security Council vote, China will abide by the resolutions of the Security Council.

 

[MH.Yang]

It goes both ways, doesnt?

Yes, it's two-way.

Frankly speaking, China also needs the markets of western countries.

 

[Yongpeng Sun-Tastaufen]

The Chinese people abide by international law and do not sell weapons to the belligerents.

Not directly. China sell to Iran and Iran donate to Russia. Even though China does not sell DJI drones to Ukraine and Russia, thousands of DJI drones flood into Ukraine via neighboring countries. DJI refuses to block signal in Ukraine the way it did in Syria. This shows Chinese hypocrisy. They say they do not supply weapons to Ukraine and Russia but they do because of profit.

As long as it can pass the Security Council vote, China will abide by the resolutions of the Security Council.

What's the point? Russia veto that in UNSC.

 

[Viet]

The question is that China has always respected Germany very much. Why do you think that a trade war will break out between the two sides?

The economies of China and Germany are complementary, and there is not much competition between the two sides in many fields. Germany is not an Anglo Saxon country and has no historical hatred with us. We are not interested in starting a meaningless trade war.


We did not help Russia.

The Chinese people abide by international law and do not sell weapons to the belligerents. China also does not recognize Russia's sovereignty over Crimea and other regions.

However, China does not support NATO's sanctions against Russia for normal trade.

China is not a member of NATO. If you want China to participate in the sanctions, please submit the sanctions proposal to the UN Security Council.

As long as it can pass the Security Council vote, China will abide by the resolutions of the Security Council.

China is not Russia you are not a threat to Germany. I never call on trade war Germany against China. That’s stupid. The US has vast interest to bring down China, Germany not.
However Germany must reduce dependency. Too much dependency will end in economic blackmail by Beijing.

 

[Yongpeng Sun-Tastaufen]

China is not Russia you are not a threat to Germany. I never call on trade war Germany against China. That’s stupid. The US has vast interest to bring down China, Germany not.
However Germany must reduce dependency. Too much dependency will end in economic blackmail by Beijing.

Germany is a Chinese vassal.

 

[MH.Yang]

China is not Russia you are not a threat to Germany. I never call on trade war Germany against China. That’s stupid. The US has vast interest to bring down China, Germany not.
However Germany must reduce dependency. Too much dependency will end in economic blackmail by Beijing.

China blackmailing Germany? Please tell me when China blackmailed Germany?

As far as I know, the Chinese govt has always held goodwill towards Germany. Moreover, the Chinese generally see Germany as a pole of the future world order.

Germany's manufacturing industry does depend on China, but this is an inevitable result of global economic integration. Germany itself is a country that relies on Global trade, which will inevitably lead to Germany becoming a member of the global economic integration chain.

Of course, you want to reduce your dependence on China, which is correct. No country should rely too much on another country. Germany is in an awkward situation because of its dependence on Russian energy. Even if Russian oil is cheaper, the Chinese govt has set a ceiling on the amount of Russian oil imported.

However, with only 80 million people in Germany, you can't have all the industrial links. Therefore, it is impossible for you to get rid of your dependence on China.

Similarly, China is also relying on western countries such as Germany. China's industrial productivity needs the market, and Germany and other countries are the markets that China needs.

 

[jhungary]

That’s the new democratic world order Sergei Lavrov wants: buying chinese products instead of western products. Putin hates the west so much that he pushes Russia deeper into chinese dependency. Made in China will flood Russia and kill off all manufacturing. I wouldn’t be surprised when Chinese raise the prices double or triple once they control the russian market.

They already did.....

A friend of mine lives in Russia told me he was going to buy a car, but since the sanction almost all Japanese or Korean car (European car were always above him) are out of bounce with a Toyota Hiace going for $100,000 USD. He was trying to buy Keely, but it still cost him $40,000 USD, which is almost twice the price he can get before. Considering a Geely is more or less around $27,000 AUD here. $40,000 is too much.

 

[MH.Yang]

They already did.....

A friend of mine lives in Russia told me he was going to buy a car, but since the sanction almost all Japanese or Korean car (European car were always above him) are out of bounce with a Toyota Hiace going for $100,000 USD. He was trying to buy Keely, but it still cost him $40,000 USD, which is almost twice the price he can get before. Considering a Geely is more or less around $27,000 AUD here. $40,000 is too much.

The strength of Chinese automobile manufacturers is new energy vehicles, not fuel vehicles.
Considering that Russia is an oil producing country, I don't think Russia will promote new energy vehicles soon.
So this matter is actually very embarrassing.

 

[jhungary]

The strength of Chinese automobile manufacturers is new energy vehicles, not fuel vehicles.
Considering that Russia is an oil producing country, I don't think Russia will promote new energy vehicles soon.
So this matter is actually very embarrassing.

What's that have to do with Chinese jacking up the price in Russia when they don't have to??

I mean sure, Toyota or Hyundai dealer jacking up the price because of the sanction, China does not have sanction on Russia so why sell your cars twice what it cost before??