Russia is exporting grain, legumes, and oilseeds seized from occupied territory in southern Ukraine and selling the products to China and its other allies. In a deal cut in October at the latest Belt and Road Summit in China, Moscow agreed to sell Beijing 70 million tons (valued at about $25.7 billion) over the next 12 years. Both countries are working to develop the infrastructure that will enable the transportation of a high volume of goods in both directions. Moscow is claiming that the main corridor to transport these agricultural products will be open within the next two weeks, according to Hlib Parfonov of the Jamestown Foundation. Since Russia can’t meet its contract commitment with its current level of agricultural production, it plans to fulfill the orders by Ukrainian-grown grain to Russia’s for the foreseeable future.
China is interested in using the North Siberian Railway, which Russia is expanding in its latest development plan. The proposed Kyzul-Kuragino rail project will link China via the Altai Republic in southern Siberia. This area is part of Asian Russia, however, it was once part of extreme eastern Kazakhstan and the northern tip of China’s Xinjiang Autonomous Region. Given that China is interested in recouping land that historically was once part of the Chinese empire, it will be interesting to watch how China’s President Xi Jinping treats the infrastructure development in the coming years. He does not need to engage in kinetic warfare with Russia as Moscow provides Beijing virtual access and resources at almost no cost to China.
China is heavily involved in natural gas and oil pipeline development in parts of eastern Siberia currently located inside Russia. It is often referred to as China’s “raw materials pantry.” These are lands owned by China until the end of WWII. Today Chinese companies “own” tens of thousands of acres of land under long-term leases. The area is predominantly ethnic Han and the population speaks Mandarin.
In late October the Russian publication, Kommersant, reported that Russian experts claim Moscow is emphasizing the develop of “all roads to China.” From Beijing’s perspective, China is utilizing Russia as a “resource and food colony,” according to Vadim Shtepa, the Editor-in-Chief of the only independent media outlet on Russian regionalism and federalism. Chinese purchases of so-called Russian wheat increased by 78% over the past year, according to a May report in the Russian publication Izvestia. Chinese consumption of Russian gas also increased but can only compensate for about 20% of Russia’s revenue lost from its European market sales and sanctions imposed after Putin’s invasion of Ukraine.
“The New Land Grain Corridor, the Trans-Baikal Grain Terminal, and Guangdong BestCon Intelligent Equipment signed a contract to create a specialized overland grain fleet at the Eighth Eastern economic Forum in September, says Parfonov. When finished it will be able to transport up to 600,000 tons (up to 8 million tons annually) of grain using 22,000 specialized containers. By February 2023 a record 25 ships from Ukraine carried 1.2 million tons of grain to China and the numbers are increasing. In May, when Moscow agreed to extend the grain corridor for 120 Days, Parfonov says that China again benefited from reduced prices for Russian/Ukrainian grain. Over the last 18 months this represents some of the highest volume in the history of Ukrainian-Chinese agricultural trade.
“With the recent deal between Beijing and Moscow, China seems to be transitioning from Ukrainian exports to Russian grain,” notes Parfonov. China still buys grain directly from Ukraine. From a food security perspective, however, there may be conflict arising in the coming months. As soon as Beijing receives its November and December shipments Russia may again target Ukrainian grain shipments with its navy attempting to block exports leaving Odessa for China.
Daria Novak served in the U.S. State Dept.
Illustration: Pixabay