Ukraine War: China exploits Russia’s weakness, regains Vladivostok after 163 years

Ukraine War: China appears to have emerged as a big winner of the war between Russia and Ukraine.

Since the conflict between Russia and West-backed Ukraine, China has acquired access to unanticipated geographic areas like the Vladivostok port and its auto industry has grown rapidly.

The conflict between Russia and Ukraine has reached a standstill, and despite Moscow’s claims of victory in Bakhmut, NATO nations and Russia are pooling their resources to keep the upper hand in the conflict area.

China has maintained its neutrality in this while prioritising its own national interests. China has become the dominant partner in the relations by fully utilising Russia’s isolation as a result of its assault against Ukraine.

From June 1, the Russian Vladivostok port will be operational as a Chinese Transit Port. Located on the Pacific Ocean, the port sees annual container traffic of nearly one million twenty-foot equivalent units.

The city has been home to the Russian Pacific Fleet. In 1860, the port was ceded to the Russian Empire by the Chinese Qing. With the opening of the port, the northeastern interior of China will gain access to the sea. By reaching this seaport via rail, products from Northern China will be further shipped to Southern China by ship.

The Vladivostok port, historically known as Haishenwai under the Qing era, will offer cross-border transit for shipments for internal trade in the Jilin region of northeastern China.

Without any fanfare, the General Administration of Customs China (GACC) made this announcement on its website. Beijing claims that the action is consistent with its “national strategic plan to re-vitalize Northeast China’s industrial base and facilitate the cross-border transport of domestic trade goods with the use of overseas ports.”
Through historical rights, China has in the past asserted a claim to the port of Vladivostok. The inclusion of Vladivostok Port in the Chinese economic system is now referred to by China as a manifestation of “high-level strategic mutual trust between China and Russia.”

Russia’s dependence on China will inevitably rise as a result of the Western sanctions that are harming its economy. According to the GACC, bilateral commerce between China and Russia totaled $73.15 billion USD in the first four months of 2023, increasing 41.3 percent year over year.
Russian Prime Minister Mikhail Mishustin recently signed a government order approving an intergovernmental agreement to supply natural gas to China via the Far East gas pipeline route, which ends in Vladivostok.

“With the opening of Vladivostok port, China and Russia can engage in more cooperation in port construction and logistics, further enhancing the economic vitality of northeastern China and development in the Russian Far East,” Song Kui, head of the Contemporary China-Russia Regional Economy Research Institute was quoted in the Global Times.

The opening of Vladivostok port for China will reduce Jilin and Heilongjiang’s land transport distance to the sea, which will “greatly enhance their manufacturing competitiveness”.

The transportation cost for goods will be greatly reduced as Vladivostok is only 200 km away from these Chinese cities. “Shipping goods from northern to southern China via the foreign port of Vladivostok will not only cut costs but also help China strengthen its industrial and supply chains with its neighbors,” a Global Times report said.

Northeast Asia, where China, North Korea, Japan, and Russia converge, is home to Vladivostok. It serves as a crucial transportation hub connecting all of Europe to Asia. It is significant for Russia’s geopolitics in addition to being a major commercial route.

The four southern Kuril Islands, which the Soviet Union had taken at the close of World War II, have been claimed by Japan. The islands are positioned well, dividing the Pacific Ocean from the Sea of Okhotsk. They create a crucial point of exit for the Vladivostok-based Russian Pacific Fleet.

Japan imposed sanctions on the nation and halted economic cooperation in the region when Russia invaded the Ukraine. In retaliation, Russia put a halt to negotiations for a peace treaty involving the Kurils Islands and even carried out military drills near the island aimed at fending off an invasion.

In reality, Vostok 2022, a combined naval drill with China, was also carried out there.

The fact that Chinese President Xi Jinping broke with his nation’s long-held policy of neutrality in regard to bilateral disputes and asserted that Beijing doesn’t accept Japan’s claim to the four disputed islands is evidence of the development of ties between Russia and China.

China eclipsed Japan as the top auto exporter in the first quarter of 2023 because to higher sales to Russia and rising demand for electric vehicles.

The economic sanctions that drove the big international players out of Russia have devastated the Russian auto industry, which has benefited the Chinese auto industry.

The China Association of Automobile Manufacturers recently revealed data showing a staggering increase in automobile exports of 58 percent between January and March of the previous year. During the quarter, 1.07 million units were shipped, compared to Japan’s 950,000 car exports.

The top export markets for all Chinese-made automobiles were Russia, which replaced Belgium, Australia, and Thailand as the top destinations for electric vehicles from China. To 140,000 units, exports to Russia increased thrice over the previous year.

In the wake of Russia’s invasion of Ukraine in February 2022, Toyota Motor, Volkswagen, and other major automakers closed their operations there and left the country.

Chinese automakers, in particular Chery Automobile and Great Wall Motor, extended their operations in Russia to fill the need. According to reports, organisations connected to Chinese city governments fund Chery Automobile.

Nearly 30,000 trucks that may be used for military purposes were also supplied from China to Russia. The amount compared to last year is roughly seven times more.

In 2009, China has surpassed the US as the largest market for brand-new automobiles worldwide. Given that the Chinese government has provided tax incentives to support the expansion of the local Electric Vehicle industry, the growth spurt in Chinese vehicle exports is anticipated to continue in the current quarter. Government assistance helped make electric vehicles widely used.

Chinese auto exporting has increased as a result of the switch to electric vehicles. Exports of new energy vehicles, which include EVs, increased 93% year over year to 380,000 units in the first quarter. The percentage of new energy cars in China’s total auto exports was about 40%.

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