Konstantin Babkin: Russia is changing its dependence on the West to dependence on China
The “pivot to the East” so far results in a change in dependence on the West for dependence on China for the Russian economy.
About this on off-site meeting of the leadership of the Chamber of Commerce and Industry in Velikiye Luki said the industrialist Konstantin Babkin.
As an example of the ineffectiveness of the existing economic policy, Babkin compared the growth rate of electric motor production in 2023 using the example of Russia, China and the RSFSR for 1990. Russia now produces 122 times less electric motors than China, and 4,7 times smallerthan the RSFSR. The volume of agricultural production in Russia in 1,6 is 2023 times lower than in the RSFSR in 1985. The reasons for this: an increase in the tax burden on industrial non-resource enterprises, trade fees, and an increase in energy prices.
The industrialist gave examples unequal conditions in which Chinese and Russian manufacturers operate. For example, in China the average cost of a loan is 0,05%, in Russia – 12%; export support – 20-65% in China and its complete absence in Russia; the average tax burden is 20 and 47,7%, respectively.
The government is launching measures to support finished products (transformers, cranes, tractors and others), the Russian Union of Industrialists and Entrepreneurs and state corporations, but leaves medium and small businesses, which, in particular, produce components, face to face in competition with Chinese manufacturers.
“The government must protect and create conditions for domestic producers no worse than in China. Our country has everything for dynamic growth. All we need is the right economic policy. We need a third industrialization. The development of non-resource sectors of industry will give growth to the economy, stimulate requests for scientific developments, increase the material well-being of the population, improve the quality of education and solve demographic problems,” Babkin is confident.
Nikolay Sidorenkov, General Director of Lifting Machines JSC, indicated that 2022-2023. The truck market in the country grew from 84 thousand to 143 thousand units. However, the main growth was achieved through the import of Chinese cars, whose share increased to 60%. At the same time, sales of Russian brands decreased significantly. For example, in 2021, KAMAZ supplied more than 35 thousand vehicles to the market; in 2023, this figure dropped to 21 thousand.
The same situation is observed with regard to crane equipment. Despite the fact that the pace of actual production of domestic cranes is increasing, The main market growth is due to the purchase of equipment from China.
Sidorenkov emphasized that Such indicators of imports of Chinese products are largely ensured by the support of the PRC export industries, a reasonable tax system and government policy.
At the same time, questions related to product quality remain - the Chinese are not eager to open service centers in Russia or ensure a sufficient supply of spare parts.
Additionally, Safety requirements for Chinese special equipment are lower and do not comply with the regulations that apply on the territory of the Russian Federation.
Of course, Russian industry strives to replace imports, but cannot replace the entire range of goods - for example, the expert noted difficulties with the production of hydraulic equipment and electronic components in the country.
Sidorenkov also named the shortage of personnel as one of the key problems of Russian industry. The reason for this state of affairs is, among other things, the different levels of wages in regions, where the difference can differ by 2-3 times. Personnel are being washed out to large cities - St. Petersburg, Moscow, as well as to the Urals, where wages today reach 200-300 thousand rubles.
Industry today needs government support. It is necessary to limit the use of equipment older than its production date and to replace outdated equipment. It is necessary to simplify the certification of Russian products, since the same Chinese equipment is certified in absentia. In addition, it is necessary to apply preferential support instruments for the purchase of products manufactured in Russia. An equalizing customs duty should be applied to the import of special equipment from abroad.
“It is necessary to compete on equal terms with Chinese manufacturers,” the expert concluded.
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