Trump vs. China War: Chinese companies may move production to Russia

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BEIJING – Small and medium-sized enterprises in China, under pressure from the trade war with the United States, are studying the possibility of transferring production to Russia.

The Secretary-General of the International Development Association of China (CODA), He Zhenwei, in an interview before the St. Petersburg International Economic Forum (SPIEF), revealed this.

Trade between China and the US mainly depends on small and medium-sized enterprises, while China’s bilateral trade with Russia represents large state-owned enterprises, he said.

“However, many Chinese small and medium-sized export-oriented companies now face difficulties. The US has already raised its Chinese product taxes from 10% to 25%, which is equivalent to closing its doors. These companies could increase product prices by 25%, which is unlikely, “he said.

Under such harsh conditions, Chinese companies are now struggling to maintain their existence.

“They should consider transferring production to Russia,” he said, adding that “Chinese products produced in Russia could be sold in the United States and even in Europe.”

The current rate change between China and the US is worsening in recent times. Washington raised rates from 10% to 25% of Chinese imports, totaling about $200 billion. US President Donald Trump also ordered the start of the process of raising tariffs on all remaining imports from China, estimated at about $300 billion. In response, Beijing raised the value of $60 billion in US imports on Saturday.

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Meanwhile, trade between Russia and China saw last year’s historic growth of about 25% to $108 billion, surpassing all forecasts. According to Russian President Vladimir Putin, China is and will continue to be Russia’s main trading partner. He said recently that the two countries are enjoying their best commercial and economic ties of all time.

Meanwhile, China’s Ministry of Education issued an official warning Monday for students studying in the United States. The warning about the need to be ready for visa refusal or restrictions on its duration.

“For a while, a number of Chinese students studying in the United States faced visa restrictions. The visa period has increased, as the duration and number of refusals have increased, the ministry warns numerous students and academics to assessing risks, taking precautions and conducting appropriate training,” the ministry said in a statement.

Tensions between Beijing and Washington, including in the humanitarian sphere, have been on the rise in recent weeks amid a trade war that has been raging for almost a year.

The latest round of US-China trade talks ended in mid-May with no progress. The United States claimed that Beijing broke with agreed commitments and rapidly increased taxes from 10% to 25% on imports worth $200 billion.

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