Chinese imports of Russian coal hit 5-year high as ties grow stronger | Business and economy

Russian coal imports reached 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 of Chinese trade providing 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 rising energy demand in the world’s second-largest economy due to extremely hot weather, General Administration data showed on Tuesday. customs.

The trade, which rose 57% from the same period last year, marked the highest volume since authorities began collecting data in 2017.

China and Russia, which earlier this year said their friendship knows no bounds, 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% in August to $11.2 billion on rising demand for oil, coal and gas.

Chinese exporters also increased shipments to Russia, with trade volume jumping 26% year-on-year last month to $8 billion.

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

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

Carsten Holz, an expert on Chinese economics at the Hong Kong University of Science and Technology, cautioned against interpreting the surge in Russian coal imports as a coordinated effort by Beijing to prop up Moscow.

These are driven by short-term demand-side factors, namely the summer heat wave and therefore increased energy 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, which would manifest itself in the form of infrastructure developments to increase transmission capacity for energy imports in from Russia, or in the coordinated and widespread signing of long-term coal supply contracts with Russia. This would neither be in the interest of the Chinese economy, which benefits from decentralized and market-oriented decisions, nor would it correspond to the national climate policy, which favors new alternative energy sources.

In Putin’s first meeting with Chinese President Xi Jinping since last week’s invasion, the Russian leader expressed his appreciation for our Chinese friends’ balanced stance on the Ukraine crisis.

Xi, who met Putin on the sidelines of the Shanghai Cooperation Organization (SCO) summit in Uzbekistan, said China is willing to work with Russia to play a leading role in demonstrating accountability. great powers and to infuse stability and positive energy into a world. in the tournament.

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 rely on Russia, as trade growth so far had been driven by economic factors, including heavily discounted prices. on Russian coal and China’s energy demand.

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