Although China is the world’s number one exporter with global shipments valued almost 5 times higher than those for eleventh-ranked Russia, that doesn’t mean that Russia is devoid of competitive advantages doing business with its bigger international trade rival.
Sure, China maintains many profitable relationships encompassing a wide range of goods that it ships to its Russian customers due to an abundance of resources. Less well-known is the fact that Russia still enjoys significant trade product strengths that result in counterbalancing positive cashflows from China, albeit from a much smaller set of products.
China Top 10
Chinese Product Advantages Versus Russia
Below are the top 10 goods for which China enjoyed a higher dollar value from its exports to Russia after subtracting what it spent on Russian imports for those same types of products. Technically, a country’s exports minus imports is known as “net exports” which can be a positive amount (indicating a surplus) or a negative number (indicating a deficit).
- Phone system devices: US$3.2 billion surplus win for China
- Furskin clothing and accessories: $2.5 billion
- Computers, optical readers: $1.7 billion
- Lamps, lighting, illuminated signs: $1.6 billion
- Women’s coats, jackets (not knit or crochet): $1.4 billion
- Footwear (leather): $1.2 billion
- Footwear (rubber or plastic): $1.2 billion
- Automobile parts/accessories: $972 million
- Linens: $952.5 million
- Women’s clothing (knit or crochet): $750.8 million
Among these, lamps and lighting (up 324%) and phone system devices including smartphones (up 99.2%) increased their net revenues for China from export sales to Russia by the highest percentages from 2012 to 2014.
Russia Top 10
Russian Product Advantages Versus China
A fossil fuel energy product, crude oil represents the number one export for which Russia shows the strongest sales advantage compared to similar product exports from China to Russia. In second place is another fossil fuel, coal representing an opportunity for China to develop alternative and cleaner energy sources for its fuel needs.
- Crude oil: US$25 billion surplus win for Russia
- Coal, solid fuels made from coal: $2.2 billion
- Processed petroleum oils: $2.1 billion
- Sawn wood: $1.6 billion
- Rough wood: $1.5 billion
- Nickel (unwrought): $1.3 billion
- Whole fish (frozen): $1.2 billion
- Potassic fertilizers: $829.4 million
- Chemical woodpulp (non-dissolving): $769.2 million
- Iron ores, concentrates: $677.6 million
The fastest-growing Russian product win versus China is non-dissolving chemical woodpulp, with a product surplus up in value by 24.6% compared to 2012.
Russia’s edge in crude oil over China improved in value by 22% from 2012 to 2014, while Russia’s product surplus in sawn wood appreciated by 21.4% over that same 3-year period.
The Winner Is
Final Scorecard for Trade War: China Versus Russia
Led by a wide variety of products from mobile phones to women’s clothing, China earned an overall $12.1 billion surplus in its international trade with Russia during 2014.
From a more granular perspective, the Harmonized Tariff Schedule has 97 product categories at the two-digit summary level. China held positive balances in 75 of those 97 categories (77.3%) for a $50.5 billion subtotal, led by the following:
- Electronic equipment: $7.9 billion surplus win for China
- Machinery: $7.7 billion
- Clothing (not knit or crochet): $3.6 billion
- Knit or crochet clothing, accessories: $3.2 billion
- Footwear: $3.1 billion
- Furskins, artificial fur: $2.6 billion
- Furniture, lighting , signs: $2.4 billion
- Vehicles : $2.4 billion
- Other textiles, worn clothing: $1.7 billion
- Plastics, plastic articles: $1.6 billion
These 10 product categories account for 71.4% of the total value of Chinese product-specific surpluses trading with Russia.
Russia dominated the remaining 22 product categories subtotaling $38.4 billion, led by the following:
- Mineral fuels including oil: $29.6 billion surplus win for Russia
- Wood: $2.8 billion
- Nickel: $1.3 billion
- Ores, slag, ash: $1.2 billion
- Fish: $1 billion
- Fertilizers: $948.5 million
- Woodpulp: $786.3 million
- Gems, precious metals: $420.3 million
- Salt, sulphur, stone, cement: $107.7 million
- Aircraft, spacecraft: $97.8 million
The above categories represent 99.3% of the total value of Russian product-specific trade surpluses gained at China’s expense.
Research Sources:
The World Factbook, Country Profiles, Central Intelligence Agency. Accessed on January 7, 2016
International Trade Centre, Trade Map. Accessed on January 7, 2016
Investopedia, Net Exports Definition. Accessed on January 7, 2016
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