The eighth China-Russia Expo is set to take place from May 16 to 21 in Harbin, Northeast China's Heilongjiang Province. Photo: VCG

Around 4 am on Thursday, Russian President Vladimir Putin's plane arrived in Beijing, marking the beginning of his two-day state visit to China. According to a previous announcement from the Kremlin, Putin will visit Harbin and attend the opening ceremony of the 8th China-Russia Expo. Accompanying him is a "high-profile economic and trade delegation" that includes Finance Minister Anton Siluanov, central bank governor Elvira Nabiullina, and Federal Service for Military Technical Cooperation chief Dmitry Shugayev.

All indications suggest that economic and trade cooperation between China and Russia will be a key topic during Putin's visit.

Chen Gang, the Russian General Manager of Suifenhe Zhongsu Automobile Import and Export Co, Ltd, is one of the exhibitors at this year's expo.

He has been busy at the company's booth these past few days. "Compared to the years before the pandemic, there are visibly more companies attending this year," Chen, a Chinese businessman long focused on opportunities related to Russia, told the Global Times.

He noted that booths at this year's expo are in high demand, with some companies even offering high prices to rent space, hoping to break into the Russian market.

"There are also a lot of Russians and Russian companies in Harbin these days; they are everywhere. My impression is that various Russian industries are eagerly seeking Chinese products and partners," Chen said.

The popularity of the expo is a reflection of the rapid development of China-Russia economic and trade cooperation in recent years. According to data released by the Chinese Ministry of Commerce, in 2023, bilateral trade between China and Russia reached $240.1 billion, a 26.3 percent increase from the previous year, exceeding the target set by the leaders of both countries in 2019 to achieve $200 billion in bilateral trade by 2024. Of this, Russia imported $110.97 billion worth of goods from China, a significant year-on-year increase of 46.9 percent.

Chen's experience also confirms the aforementioned figures. Before the pandemic, Chen mainly engaged in exporting Russian agricultural products to China and in tourism between the two countries. However, in the past two years, as relations between China and Russia have grown closer, his business has entered a "new stage," expanding to the import and export of various products such as automotive equipment, asphalt, non-ferrous metals, engineering machinery, and liquefied natural gas.

"Especially in the fields of automotive and energy, these have been the hottest areas in China-Russia trade over the past two years, with great opportunities," Chen said excitedly when talking about his business development in recent years. "My revenue has increased by nearly 200 times compared to previous years."

Fan Yeliang is another Chinese businessman who has long been involved in the import and export of timber and furniture between China and Russia. These days, he is in Harbin negotiating with Russian businessmen visiting China.

He told the Global Times that last year his volume of furniture exports to Russia "increased by four to five times" compared to the period before the pandemic, and his timber import business "at least doubled."

Amid the booming market, many new "gold seekers" have also entered the trade with Russia. Fan told the Global Times that previously, most of the businesses involved in Russia-related trade were from Northeast China. Now, many companies from South China's Guangdong, East China's Zhejiang and Jiangsu provinces are also participating.

There is a large market gap in Russia that needs to be filled, Chinese business representatives said. From the perspective of these Chinese businessmen, the rapid development of China-Russia economic and trade relations in the past two years is partly due to the withdrawal of countries such as the US, Europe, South Korea, and Japan from the Russian market, citing sanctions, leaving a lot of market space.

On the other hand, it is also because Chinese-made products are cost-effective and of good quality, making them very popular with overseas customers. Additionally, the strengthening of political trust between China and Russia has further increased Russian customers' trust in China.

Using his automotive business as an example, "sales of new and used Chinese cars have been very good in Russia in recent years. Brands like Changan, Geely, Haval, Great Wall, and Chery are particularly popular for their good quality and affordable prices," Chen said.

"Possibly influenced by political factors, Russians have become more inclined to cooperate with Chinese people in recent years. In daily interactions with them, one can clearly feel that various Russian sectors are eager to collaborate with China. Against this backdrop, the business environment in Russia's Far East has improved significantly, and local administrative efficiency in this regard has also increased," Chen said.

In the view of Chinese businessmen, there are several major challenges that need to be addressed for further development of China-Russia economic and trade relations. The first is the need for more convenient cross-border settlement.

Both Fan and Chen told the Global Times that in the past two to three months, due to increased US financial sanctions on Russia, banks have had to strengthen their review of cross-border trade settlements between China and Russia.

Many Chinese private enterprises with business dealings with Russia have encountered problems in receiving payments or settling accounts, sometimes facing rejection or delays of over two months. This increases the costs and cash flow pressure on small businesses.

They hope that China and Russia can expedite the integration of their respective payment settlement systems to meet the market demand for trade settlements between the two countries while avoiding secondary sanctions.

Also, the infrastructure level in Russia's Far East needs further improvement. Due to many European ports refusing to handle Russian cargo, the cargo throughput at St. Petersburg port in the Baltic Sea has significantly declined.

Additionally, as Russia's economic cooperation shifts toward the Asia-Pacific, ports in the Far East, including Vladivostok, are now handling a large volume of Russia's import and export maritime business.

Vladivostok port is currently operating at overcapacity, Chen said. "With the surge in China-Russia trade, there is a great need for more ports or the expansion of existing ports in the Far East. Therefore, we look forward to more cooperation between the two countries in infrastructure construction in the Far East."

Wang Xiaoquan, an expert with the Institute of Russian, Eastern European & Central Asian Studies of the Chinese Academy of Social Sciences, told the Global Times that the economies of China and Russia have unique complementarities, with China being the largest economy capable of comprehensive economic cooperation with Russia.

Given the significant reduction in Russia's economic relations, particularly energy relations, with the US and the West, and the need to advance the "Turn to the East" strategy, Russia will place greater emphasis on the strategic role of the Chinese market in exporting its oil and gas products.

Russia also views China as a source of funds and technology for implementing its import substitution policy and modernizing infrastructure, aiming for comprehensive integration in areas such as energy, defense, aerospace, agriculture, finance, and technology, Wang said.

"During President Putin's new term, China-Russia practical cooperation in all fields is likely to develop rapidly, with significant breakthroughs expected in areas such as energy, agriculture and manufacturing," the expert said.

The industrial and supply chains of the two countries are expected to achieve integrated development, he noted.

In recent years, Russia has shown an increasingly positive attitude toward the China-proposed Belt and Road Initiative (BRI), especially in terms of connectivity, capacity cooperation, finance and trade. China and Russia are expected to implement more multilateral economic cooperation projects under the framework of aligning the BRI with the Eurasian Economic Union. Russia is also expected to provide more support for the internationalization of the renminbi, the expert added.