Chinese imports of Russian coal hit 5-year high as ties deepen | Business and Economy

Russian coal imports hit 8.54 million tonnes in August amid rising energy demand in the world’s second-largest economy.

Chinese imports of Russian coal hit a five-year high in August, the latest sign that Chinese trade provides Moscow with an economic lifeline as it faces international isolation over its war in Ukraine.

Russian coal shipments reached 8.54 million tonnes last month amid surging energy demand in the world’s second-largest economy due to extremely hot weather, data from the General Administration of Customs showed on Tuesday.

The trade, up 57 percent compared to the same period last year, marked the highest volume since authorities began collecting data in 2017.

China and Russia, which earlier this year declared their friendship “boundless,” have deepened their economic cooperation since Russian President Vladimir Putin ordered his forces to invade Ukraine in February.

China’s purchase of Russian imports rose 60 percent in August to $11.2 billion on rising demand for oil, coal and gas.

Chinese exporters have also increased shipments to Russia, with trade volume last month rising 26 percent year on year to $8 billion.

Bilateral trade between the sides reached $117.2 billion in the first eight months of 2022, up more than 31 percent year on year.

Beijing refused to condemn the invasion and criticized Western-led sanctions against Moscow, though it expressed hope for negotiations and peace between the sides. At the same time, the Chinese government is seen as hesitant to openly violate sanctions for fear of losing access to Western export markets and the US dollar-centric international financial system, and a number of Chinese state-owned financial institutions are quietly distancing themselves from it. country in recent months.

Carsten Holz, an expert on the Chinese economy at the Hong Kong University of Science and Technology, cautioned against interpreting rising Russian coal imports as a coordinated effort by Beijing to support Moscow.

“These are driven by short-term demand-side factors, namely the summer heat wave and thus higher power demand in China. Decentralized coal buyers in China will simply have opted for the cheapest and most readily available coal,” Holz told Al Jazeera.

“The current wave of coal imports is unlikely to be a centrally coordinated support measure for Russia, manifesting itself in the form of infrastructure developments to increase transport capacity for energy imports from Russia, or in the coordinated signing and widespread long-term coal supply agreements. contracts with Russia. This would not be in the interest of the Chinese economy, which benefits from decentralized and market-oriented decisions, nor would it coincide with the national climate policy, which favors new alternative energy sources.”

During Putin’s first meeting with Chinese President Xi Jinping since last week’s invasion, the Russian leader expressed appreciation for the “balanced position of our Chinese friends regarding the Ukraine crisis.”

Meeting Putin on the sidelines of the Shanghai Cooperation Organization (SCO) summit in Uzbekistan, Xi said China was willing to work with Russia to “play a leading role in showing the responsibility of major powers” ​​and to “instill stability and positive energy”. to a world in crisis.

Julien Chaisse, an investment and trade expert at the City University of Hong Kong, said it remained to be seen whether Beijing would make a “deliberate choice” to trust Russia, as trade growth so far had been driven by factors. including greatly reduced Russian coal prices and Chinese energy demand.

“But in that case, it certainly means that Russia will keep prices low, or even lower, which can become a sign of vassalage,” Chaisse told Al Jazeera.

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