Heilongjiang-Russia trade ties blossom

Northeast China's Heilongjiang Province, bordering Russia, has taken many steps in recent years to boost trade and business with its neighbor, but it needs to make further reforms to improve connectivity, experts said on July 17.

Thanks to geographical proximity, Heilongjiang has been a significant trade partner of Russia, and the China-proposed "Belt and Road" initiative has also brought the province into the spotlight.

Heilongjiang is expected to play a bigger role in enhancing cooperation with Russia's Far East, Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Monday. 

Bilateral trade with Russia surged nearly 42 percent year-on-year in the first quarter of 2017 to US$2.67 billion, which accounted for 14 percent of total Russia-China trade, according to a post on the website of Heilongjiang provincial government on July 11. The province is China's busiest in terms of trade with Russia. 

In the first five months of 2017, China-Russia trade expanded 33.7 percent year-on-year, reflecting the countries' complementary industrial structures, domestic news site cri.cn reported on July 4, citing data from the General Administration of Customs. 

To maintain a steady trade partnership with Russia, Heilongjiang has taken steps to improve connectivity with some major Russian cities along the Trans-Siberian rail route such as Irkutsk and Novosibirsk, which serve as hubs to accelerate trade. Some cities in the northeastern province also unveiled industry restructuring guidelines to attract more Russian investors. 

For example, since the beginning of this year, Mudanjiang, a city in the eastern part of Heilongjiang which is located about 200 kilometers from Russia's Ussuriysk, has been actively tapping into the dairy market in the neighboring country. It has also set up seafood-processing factories that handle rising imports from Russia, according to the local government's website. 

"Heilongjiang has advantages in agriculture-related industries that can be further explored in cooperating with Russia," Bai said, noting that after the Ukraine crisis, Russia's exports of farm products were affected. China subsequently became a major importer in this segment.

Volatility of the Russian currency has had an impact on border trade in the past few years, but the impact probably eased since the second half of 2016, Jiang Yi, a senior research fellow with the Chinese Academy of Social Sciences, told the Global Times on Monday. Although depreciation of the ruble did affect small businesses in the region, this factor only involved a small part of China-Russia trade, he said, noting that the province still faces challenges in strengthening trade ties with Russia. 

"As a traditional industrial base in China, the province has been struggling in terms of GDP growth due to the lack of reforms and sluggish economic restructuring, which will also hinder its trade growth with Russia," he said. 

Heilongjiang, together with Northeast China's Liaoning Province and North China's Shanxi Province, were the last three nationwide in terms of GDP growth for a third consecutive year in 2016. 

"Although China-Russia trade has been growing rapidly, few traded goods were produced in the province, so that meant few benefits for local industries," Jiang added.