Volga Baikal AGRO NEWS Update on the Russian – Chinese Relations !!!
What Does China’s Latest Five-Year Plan Mean for Russia?
China recently unveiled its fourteenth five-year development plan, covering the period 2021–2025. In the next five years, Beijing plans to pave the way for attaining two strategic goals: doubling GDP by 2035 (compared with 2020), and achieving the status of a high-income economy.
In addition, by 2027–2028, there is every chance that China will overtake the United States and become the world’s biggest economy in terms of nominal GDP. While the rest of the world is still reeling from the impact of the new coronavirus pandemic and lockdowns, the Chinese economy is growing. For Russia, the priorities outlined in the next five-year plan open up new opportunities on the one hand, while increasing the risks of an asymmetrical dependence on China on the other.
The fourteenth five-year plan is good news for the Russian agriculture, in addition to the usual Russian exports to China such as hydrocarbons, metals, and fertilizers. Growth in Chinese consumption over the next five years could help the Russian food industry to find new customers on the Chinese market. Russian agricultural exports to China have been growing rapidly for several years now, from an estimated total value of $1.2 billion in 2015 up to $5 billion in 2020, despite fluctuations in the ruble exchange rate.
It’s important for Russian businesses to understand that the Chinese population is going to get richer over the next five years, and its consumer choices will become increasingly important on the global market. The multimillion-strong middle class in Chinese metropolises is adopting an ever-more serious attitude to food quality, and could be interested in buying Russian produce, which is often perceived by Chinese consumers as eco-friendly.
However, success on the Chinese market is highly dependent on the quality of transport infrastructure and logistics networks. To win over Chinese consumers, Russian food producers will have to overcome multiple tariff and nontariff barriers, as well as carefully devise a sales and marketing strategy for the Chinese market.