THREAD Fresh 🇷🇺&🇨🇳 data is out, and it shows that #COVIDー19 exacerbates Russia's dependency on its giant neighbor. Beyond transient effects, there are longer-term implications that bring China one step closer to #PaxSinica, a Beijing-centered regional order. Some details 1/ 
2/ According to 🇷🇺 customs data, China's share in Russian trade continues to grow. In Q1-20 it's 17.3%, while in Q1-19 it was 16%. Growth of 🇨🇳 share in 🇷🇺 export is the main driver: 14.6% in Q1-20 compared to 12.5% a year ago customs.ru/folder/511?fbc…
3/ No surprise, the primary driver was growth in oil exports. According to @SPGlobalPlatts calculations (by @oceana_zhou) based on 🇨🇳 customs statistics, in Q1-20🇷🇺 has exported 21.07 million tons to China, +16.7% to Q1-19 (18.06 million tons)
4/ As Chinese customers have taken advantage of the price war between Saudi Arabia and Russia, in March 🇷🇺 oil export to 🇨🇳 was up staggering 31.2% to 3/19 (7.02 million tons vs. 5.35 million tons). spglobal.com/platts/en/mark…
5/ In April, Russia has overtaken Saudi Arabia as a top oil supplier to China, according to fresh 🇨🇳 customs data - with 7.2 million tons shipped, +18% to 3/19 customs.gov.cn/customs/302249…
6/ As @Reuters's @muyxu & Chen Aizhu note, rise of Russian exports has coincided with drop in shipments from Saudi Arabia - despite overall growth of Chinese oil imports reuters.com/article/us-chi…
7/ According to @ArgusMedia estimate, the key driver has been growth in Urals exports to China, a key destination for underpriced Russian grade in Q1 (just over 4 million tons). Flow of ESPO, a grade popular with Chinese refineries, was stable argusmedia.com/en/news/210878…
8/ There is still a lot of volatility in the market amid lockdown in Jilin, and unpredictability on how long OPEC+ cuts in Russia will last. Putin&MBS have just discussed the fate of the deal (see this @business account by @olyatanas & Grant Smith) bloomberg.com/news/articles/…
10/ Still, the trend of gradual reorientation of Russia's oil exports towards Asia, driven by contracts with China, is clear. For @RosneftEN, the state oil giant, share of China as export destination has exceeded 50% in 2019, and continues to grow fueled by #COVIDー19 impact
11/ If history provides any guidance, Beijing is very skilled in leveraging economic crises & oil contracts against cash-strapped suppliers that are linked to the Chinese market by a pipeline. This is the story behind @official_cnpc expansion in Kazakhstan & Turkmenistan
12/ Going forward, it's feasible that Beijing could try to turn growing dependency of Russian oil exporters into more stakes in 🇷🇺energy assets - at least, that's exactly what China has been doing during 2008/2009 and following Western sanctions after 2014 in case of @NOVATEK_
13/ Beyond oil, Russian commodity producers increasingly rush to China to support revenues. Facing problems in the European gas marked, explained by @KapitonovSA in a piece for @CarnegieRussia, @Gazprom was prompted to revive "Power of Siberia 2" project carnegie.ru/commentary/815…
14/ Complex mix of shifts in global gas market, geopolitics, and power play in the Russia make this project increasingly attractive for the Kremlin. If completed, it will bound Russia to China even tighter. Good dispatch by @DimitriASimes in @NAR: asia.nikkei.com/Business/Marke…
15/ Another good example is recent change in @rzd_official, the Russian railway monopoly, investment program, reported by very well-informed @kommersant's Natalia Skorlygina (a China-watcher and scholar of Hakka during her time in academia!) kommersant.ru/doc/4357161
16/ The 2020 investment program of RZD will be cut by 200 billion rubles to 622 billion, and the funds will be reallocated. Money going for upgrade of Transsiberian and BAM railways will increase by 78% (85.5), reflecting growing priority of access to Asian markets for Russia.
17/ Combination of economic interests by powerful companies, the Kremlin's need for budget revenue to support the regime, and deepening Beijing-Moscow anti-U.S. alignment increase Russia's economic reliance on China - and Beijing's ability to leverage it in the future
18/ As a result, economic ramifications of #COVIDー19 may bring China one step closer to a more dominant position in Eurasia, as I've argued in this piece for @ForeignPolicy foreignpolicy.com/2020/04/23/cor…
19/ Creation of #PaxSinica, a Beijing-led order in Eurasia, is a tectonic development, but it's not preordained. My colleagues across @CarnegieEndow global centers and I will continue to watch this space as part of a new exciting research endeavor 👇 carnegie.ru/specialproject…
20/ Beijing's quite push in FSU, with heavy emphasis of geoeconomics, is complimentary to a more assertive foreign policy in other parts of China's Eurasian neighborhood. See this insightful report by @annafifield & @jslaternyc in @washingtonpost: washingtonpost.com/world/asia_pac…
