Russian WTO status expected to boost already fast rising trade with China

CHINESE economists and businessmen are expecting that Russia's World Trade Organisation (WTO) membership will bring greater momentum to trade and investment with China, which is already rapidly rising.

Bilateral trade last year increased 42.7 per cent year on year. In the first seven months of 2012, trade value was US$50.94 billion, up 17.7 per cent. This compares to a 0.9-per cent decline in China's trade with the EU and its 10.5 per cent growth with the United States. China Russia trade value stands at $79.25 billion against China-European Union trade value of $567.21 billion, with China-US trade coming in at $446.65 billion.

"With its accession to the WTO, Russia's trade policies and regulations will become more transparent, and trade-liberalisation measures will increase. This will help boost bilateral trade," said Zhang Jianping, an economic researcher at the Academy of Macroeconomic Research under the National Development and Reform Commission (NDRC), China's top economic planner.

Russia's general tariff rate is expected to be lowered to 7.8 per cent from the 10 per cent of last year. Its tariff for agricultural products is expected to drop to 10.8 per cent from 13.2 per cent. The country will also lower both import and export tariffs for more than one third of traded goods, with more adjustments to come in the next three years.

Reducing tariffs is the key condition for Russia's joining the WTO, and it is also the biggest concern of exporters in other countries, according to Chinese businessmen in the car industry.

Russia is expected to drop its import tariff on new sedans to 25 per cent from 30 per cent in the first three years, and it should be gradually reduced to around 15 per cent by 2019. Chinese car makers including JAC Motors and Great Wall Motors are both eyeing the possibility of further tapping the Russian market, with the latter's exporting 20,000 to the market last year, according to a report by the Shanghai Securities News.

On the other hand, Russia's WTO accession has stirred intense debate, with some worrying that government-protected industries such as agriculture, light industry, machinery manufacturing and banking will be impacted.