Prostranstvennaâ Èkonomika (Oct 2022)
Russia’s Trade with East Asian Countries: Comparative Costs and Potential
Abstract
In this paper it’s demonstrated that over the past decade Russia has sought to diversify its economic ties in favour of East Asian countries as part of the strategy on ‘turning to the East’. Such ties accounted for almost one third of Russia’s foreign trade turnover by 2020. According to the estimates presented in the article, the negative impact of geopolitical factors on Russian foreign trade has affected most countries that border Russia. At the same time, proximity and the presence of a land border have generally had a positive effect on Russian foreign trade, which indicates the opportunity to redistribute the foreign trade flows towards Asia. An assessment of the intensity of Russia’s foreign trade with East Asian countries demonstrates the redundancy of barriers in bilateral interactions. These estimates indicate a greater intensity of trade between the Russian economy and China, as well as the presence of Russia’s significant potential for expanding trade in the case of ‘deep’ integration with East Asian countries by levelling excess costs: with China – by 84%; with Taiwan – by 86%; with the Republic of Korea – by 102%; with ASEAN countries – by 113%; with Japan – by 122%. Due to the higher share of the trade with China in Russia’s foreign trade, rapprochement with the Chinese economy will contribute to generating large volumes of trade turnover between Russia and the outside world. It has been shown in the paper that as Russia approaches the economies of East Asia, reciprocity should be taken into account when reducing bilateral barriers as it may directly affect the choice of Russian strategy for purposes related to increasing mutual trade
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