Free Trade Zones Linking China, Russia & The Eurasian Economic Union

Free Trade Zones Linking China, Russia & The Eurasian Economic Union by Chris Devonshire-Ellis for Silk Road Briefing

Connecting China With Europe Via The EAEU

The increasing bilateral trade ties between Russia and China – growing at half a billion dollars a month, and set to double to US$200 billion by 2024 – are seeing a parallel interest growing in how this trade can best be serviced. Russia and China are often in the position of supplier and consumer, especially for energy, however that is now being joined by other manufacturing, IT and new hi-tech industries on both sides. This is partially driven by China’s Belt & Road Initiative, partially driven by a need to divest from trade with the United States (Russia and China) and partially with the EU (Russia). Both are also developing new export markets within the Eurasian Economic Union. Russia’s bilateral trade, mostly in its favor, has seen significant increases the past two years with fellow EAEU members Armenia (30%), Belarus (10%) Kazakhstan (21%), and Kyrgyzstan (17%). China, for its part, has also seen bilateral trade increases with Armenia (29%), Belarus (35%), Kazakhstan (48%) and Kyrgyzstan (31%). These are significant increases and can be expected to accelerate further – China is currently in the process of negotiating product tariffs on the Free Trade Agreement it signed last year with the EAEU.

This growth of trade requires free trade and related zones to be put in place, and especially near the borders of these countries. Goods from one another’s factories and suppliers can be combined without the need for duties, VAT or other taxes, and a finished product then made ready for export. If these are destined for markets with the EAEU, no further duties will be payable (as and when China agrees details to the FTA). Alternatively, it means that products can be sourced from less expensive labor pools with the EAEU with again the ability to reduce the overall manufacturing cost and remain competitive for both domestic EAEU markets in addition to markets nearby, such as Japan and South Korea to the East, and the European Union and Europe to the West.

The salary issue is of interest here as there is some disparity among the EAEU:

EAEU Member States – Skilled Factory Worker, Monthly Salary
Country (Amount, USD)
Armenia 345
Belarus 287
Kazakhstan 520
Kyrgyzstan 231
Russia 758

We can look at the available Free Trade Zones within the region, commencing with Chinese zones on the border with the EAEU, and head West towards Europe.

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Rory Hall, The Daily Coin. Beginning in 1987 Rory has written over 1,000 articles and produced more than 300 videos on topics ranging from the precious metals market, economic and monetary policies, preparedness as well as geopolitical events. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver, Silver Doctors, SGTReport, and a great many more. Rory was a producer and daily contributor at SGTReport between 2012 and 2014. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Don't forget to visit The Daily Coin and Shadow of Truth YouTube channels to enjoy original videos and some of the best economic, precious metals, geopolitical and preparedness news from around the world.