Despite conflicts and sanctions, Chinese businessmen still see "golden opportunities" from the Russian market

Many Chinese businessmen quickly seized the opportunity, taking advantage of the "golden opportunity" from the wave of Western businesses withdrawing from Russia and the increasingly warm relationship between Moscow and Beijing.

Bất chấp xung đột và trừng phạt, doanh nhân Trung Quốc vẫn nhìn thấy 'cơ hội vàng ròng' từ thị trường Nga

A train carrying goods, electronic components, household appliances... departs from Nanjing (China) to Vorsino station (Russia). (Source: Xinhua)

Mr. Kent Liu, a businessman and owner of Xinflying Digital Printing Production Company based in Guangdong Province (China), is eagerly preparing for a business trip to Russia to connect with business when seeing the blooming opportunities there, despite the conflict in Ukraine showing no signs of "cooling down".

Important market

Although accounting for a small portion, just 5%, of the company's total export sales, according to Mr. Liu, the potential of the Russian market is "huge and cannot be ignored".

“Since the beginning of the year, there has been a significant increase in orders from Russian buyers. We are paying close attention to the political and economic situation in Russia, after seeing our total export revenue surpass 100 million yuan ($13.85 million) last year. Many Russian customers have come to consult and place new orders, and we expect orders from Russia to increase by 2-3 times compared to last year if there are no political disturbances,” Liu predicted.

As Western countries stepped up sanctions against Russia following the conflict in Ukraine, Mr. Liu was among many Chinese businessmen who quickly seized the opportunity to expand their market and strengthen their foothold in their vast neighbor.

According to official Chinese data, Russia-China bilateral trade increased by 40.7% in the first five months of 2023 compared to the same period last year to reach $93.8 billion, and the value of goods from China to Russia increased by 75.6% to $43 billion.

China’s exports to Russia have continued to grow steadily, despite the weakening situation in many major markets. In May, China’s exports fell 7.5% due to weak demand from traditional trading partners such as the United States, the European Union (EU) and the Association of Southeast Asian Nations (ASEAN).

William Liu, marketing director of a medical equipment company based in Guangdong province, expects demand from Russian customers to remain stable despite domestic turmoil. “Even if the situation worsens, Russia’s demand for medical equipment and industrial supplies from China will not decrease,” Liu said optimistically, noting that Russia is becoming an increasingly important market for small Chinese exporters.

Alice Lin, an exporter of clothing and household goods, is optimistic about the prospects for doing business in the Russian market amid warming relations between Beijing and Moscow. Lin said the logistics and supply chain between the two countries would remain strong no matter what. “As long as there is no conflict in Moscow, there will always be opportunities for Chinese sellers,” she said.

Chinese entrepreneurs are increasingly interested in Russian e-commerce platforms. Russian e-commerce giant Ozon said that in 2022, revenue and orders from Chinese suppliers on the platform increased almost sixfold compared to the previous year.

Optimistic but cautious

However, recent developments in Russia have left many Chinese companies cautious. “We have very little information at the moment, so we can only observe,” said Rick Wang, a sales manager at a coat manufacturer in eastern China’s Zhejiang province.

According to Mr. Rick Wang, if Russian customers are pessimistic about domestic issues or the health of the economy, orders will certainly decrease significantly.

"We need to wait until late July and August to see how many new orders they will place. In general, the information I get from Russian customers is not very optimistic. Some have moved factories to Türkiye as Western brands are leaving in droves," Mr. Wang said.

Brussels announced its 11th round of sanctions against Russia last week, expanding the list to include nearly 2,000 individuals and entities. Washington also imposed additional sanctions and export controls in May. China has not joined the sanctions, but has also been cautious about trade with Russia to avoid secondary sanctions.

More than a year after the conflict in Ukraine erupted, many Chinese companies are assessing the pros and cons of the Russian market. Wary of Western sanctions, some large Chinese companies are pulling out of Russia, while smaller ones are trying to take advantage of the Kremlin’s pivot to countries it sees as friendly.

William Liu, head of marketing for Russia and South America, fears that the procurement budget for Russian public health institutions could be squeezed as the country plans to spend more on its military. He also said that Chinese companies are still unable to compete for market share in high-end medical services in Russia, which is largely dominated by Western companies.

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