The Great Chinese Traffic Jam

New coronavirus restrictions in China have further complicated overland trade between China and Russia. Russian customs reports that the load on road and mixed border crossing points during peak periods significantly exceeds the design capacity. Quarantine measures and sanitary restrictions, up to bans on the supply of certain types of products, are also holding back an increase in Russian non-commodity exports, while imports are limited by lockdowns in Chinese cities and congestion at the border – the creation of new checkpoints will be required to resolve transport problems, the Ministry for the Development of the Far East believes.

The growth of trade turnover between Russia and China is taking place against the backdrop of ever new difficulties with the delivery of goods. Now Russian companies working with Chinese manufacturers are reporting problems due to a new wave of restrictions imposed in China due to an increase in the number of coronavirus cases as part of a “zero tolerance” policy for the virus. Recall that the lockdowns have already caused protests in Shanghai, as well as at the Foxconn factory in Zhengzhou.

As Aleksey Chekunkov, head of the Ministry for the Development of the Russian Far East, explained to Kommersant, since the beginning of the pandemic, trade between Russia and China has been strongly influenced by sanitary restrictions imposed by both the central government and the regions and specialized services of the PRC. In addition to the ban on the supply of certain groups of goods and the physical congestion of checkpoints due to quarantine procedures, an additional problem was the unpredictability and inexplicability of the restrictions imposed for business. “For example, a pollock fillet was recognized as dangerous – a potential carrier of coronavirus, but crab and seafood continued to go,” the minister says. He expects the logistics restrictions imposed in connection with the coronavirus to be gradually lifted as the epidemiological situation in China equalizes with the rest of the world.

Difficulties with supplies, however, do not yet hinder the growth of trade between the Russian Federation and China. Since the beginning of the year, it has grown by 27% and in December it could reach $160 billion, Vladimir Bulavin, head of the Federal Customs Service (FTS), said yesterday. According to Chinese statistics (the Russian side does not disclose details of trade), China’s exports to Russia increased to $59.6 billion over the ten months (plus 12.8% over the same period last year), imports – up to $94.3 billion (plus 49 ,9%).

To a large extent, the increase in turnover was due to the increase in oil prices. But at the same time, many Russian manufacturers have reoriented supplies from Europe to Asia. The demand for Chinese imports has also grown, which has increased the load on the railway network and checkpoints.

The Federal Customs Service confirmed to Kommersant that automobile and mixed checkpoints on the Russian-Chinese border operate under a number of restrictions and prohibitions imposed by the Chinese side, and loading during peak periods significantly exceeds the design capacity. On average, the number of trucks allowed to pass has increased by 30-60%, while the share of goods from the PRC that are subject to inspection this year has almost halved to 2.1%. The terms for the release of goods according to declarations in the port of Vladivostok have also been reduced (85.4% of goods are released from registration within four hours from the moment of registration). The working hours of some automobile points have also been increased, if necessary, the working day is extended until the “last car”, the FCS reported.

The existing capacity of checkpoints is not enough, Aleksey Chekunkov believes. Launched in November, the Nizhneleninskoye-Tongjiang bridge has a throughput capacity of 5.8 million tons per year, the second stage of the project, which includes the expansion of Leninskoye-1 and Leninskoye-2 stations, can increase it to 20 million tons. “We consider it promising to create new checkpoints in the areas of the settlements of Dzhalinda-Mohe (Amur Region) and Starotsurukhaituy (Transbaikalia), which in total can provide up to 20 million tons of new transportation capacity,” adds the head of the Ministry for the Development of the Far East.

The removal of logistical restrictions on transportation was discussed last week at a meeting of the bilateral intergovernmental commission with the participation of First Vice Premier Andrei Belousov and Deputy Premier of the State Council of the People’s Republic of China Han Zhen. It is reported that the parties “discussed the need to remove restrictions and simplify procedures related to the implementation of rail and road cargo transportation at the border between the countries, as well as the importance of promoting the expansion of transshipment capacities at checkpoints to increase the supply of grains and oilseeds to China.”

The founder of VIG Trans, Igor Rebelsky, notes that restrictions and lockdowns do not affect the largest ports in China, they only affect the work of operational personnel, which are not so numerous in ports (in Shanghai, in particular, almost everything is automated). Lockdowns, however, affect the work of warehouses of manufacturing enterprises – there may be internal restrictions on the issuance and loading, access routes to factories may be blocked, or drivers cannot enter the territory of closed cities, the expert explains. Due to restrictions, delivery times are increasing: if at the beginning of summer it was possible to deliver goods to Moscow within 40 days, now the terms can reach up to 2.5-3 months.

When sending goods to Russia, there are difficulties when delivering already within the Russian Federation due to transport restrictions. In general, both importers and exporters have a great demand for shipment, the most problematic goods are dangerous goods, they have the most restrictions, there are not so many options for shipment, adds Igor Rebelsky. “If we talk about multimodal transportation, then the problems lie in the increased workload of the terminals of the Far East, in the heavy load at the stations of the Moscow hub against the background of the redistribution of goods turnover – in early autumn there was a commission ban on the arrival and departure of trains to the Vorsino station, since it was completely packed , now this load has been redistributed to other terminals,” the expert notes. At the border crossings, due to the queues against the backdrop of the accumulation of cargo and the shortage of platforms submitted from the Russian side, the time for reloading from one track to another has increased.

Tatyana Edovina