Financial crisis likely to further hamper Russian-Chinese trade

Special Report:Global Financial Crisis

BEIJING, Feb. 10 (Chinese media) -- Trade between Russia and China would likely

slow down as the lingering financial crisis worsens, Serger Tsyplakov, Russian

trade representative in China, told Chinese media Tuesday.

He said Russian-Chinese bilateral trade posted a rapid growth in the first

half of last year but slowed in the second half, especially in the fourth

quarter, as the global economic turmoil spread.

Russia's exports to China have been hampered by the sharp decline in the

price oil, nonferrous metal, fertilizer and wood. These products comprise the

staple of Russian exports to China, he explained.

Trade between the two countries was valued at 56.8 billion U.S. dollars

last year, up 18 percent year-on-year. It was sharply down from 44.3 percent of

growth rate in 2007, he cited data from the General Administration of Customs.

He saw the first half of this year difficult for the bilateral trade and

expected a rebound in the second half.

"If Russian-Chinese trade could record growth at 8 or 10 percent this year,

that would be very impressive."

He said a target of 60 to 80 billion dollars of bilateral trade in 2010

could be achieved.

Tsyplakov also said economic slowdown in Russia would reduce the Russian

people's income and weaken demand for products from China. China's export of

garment, shoes and hats to Russia would remain stable but a sharp decrease would

be seen in export growth of machinery products from China.

The avoidance of trade protectionism would be significant to the steady

development of bilateral trade. Enterprises from the two countries would seek to

promote trade, he said, noting the Russian government would continue supporting

Russian export enterprises by lowering export tax.

Russia's gross domestic product (GDP) grew only 5.6 percent year-on-year in

2008 because of the financial crisis and drastic decline in income from oil

exports. The growth rate was 2.5 percentage points lower than a year-earlier

level.

Its GDP growth would be close to zero or below zero this year, said Russian

deputy Prime Minister Igor Shuvalov.