New Vectors of Moscow’s Foreign Trade Activity
Global changes are taking place in the world trade and economic system. How Moscow is adapting to them is described in his analytical article by Andrey Dorokhin, Head of the Division of Foreign Trade Analytics and Relations with International Organizations of the Department of Foreign Economic and International Relations of the City of Moscow
In 2022, the economies of Russia and in particular Moscow underwent a number of serious trials due to global changes in the system of international trade and economic relations. New restrictive measures that affected the logistical, financial and personnel aspects of economic relations of the constituent entities of the Russian Federation led to a forced revision of the existing mechanisms of foreign economic activity in an extremely short time. The increase in the cost of imports due to the increase in the number of intermediaries has only partially been slowed down by emergency measures such as the legalization of parallel imports.
Despite this, high-tech exports remain a key priority for Moscow in ensuring the global competitiveness of the region. In January–June 2022, enterprises and organizations registered in Moscow carried out trade operations with 204 countries of the world. With the help of customs statistics for the first half of 2022, it is possible to sum up the interim results of the capital’s foreign economic activity without taking into account Moscow’s fuel and energy exports, and see real changes in the structure of the exports and imports of the city’s economy.
In the reporting period, the foreign trade turnover between Moscow-registered organizations and foreign partners (excluding the fuel and energy component of exports) amounted to approximately 66.0 billion US dollars – a decrease of 16.5% compared to the first half of 2021.
Factoring, support from domestic development institutions in the form of discounted lending, and other financial instruments became inaccessible to Moscow enterprises for some time. The situation began to improve a little after the partial reorientation of Russian companies to Asian countries, but countries beyond the CIS continue to play a leading role in Moscow’s economy.
The group of non-CIS countries with the largest volume of trade with Moscow has not undergone significant changes. Thanks to its active export policy, China continues to hold a leading position with a share of 24.1% (in the first half of 2021: 20.0%) of the cleared trade turnover. France, which in terms of foreign trade turnover had occupied the 7th position among foreign partner countries of the Russian capital in the first half of 2021, moved to the 9th position in the first half of 2022, being overtaken by Switzerland, while Japan fell to 11th place in this indicator. India rose to the 12th position, a scenario which was realized due to the partial reorientation of the Moscow economy to new markets.
Among the ten leading countries in terms of trade relations with Moscow (excluding fuel and energy products in Moscow exports) are Belarus (turnover amounted to $4.642 billion) and Kazakhstan (turnover of $2.672 billion). Of the leading partner countries, Moscow has a positive balance of trade with Kazakhstan, mainly due to the supply of heavy engineering products, electrical machinery and equipment, and ferrous metal and plastic products – which in turn are associated with attempts to circumvent sanctions restrictions.
According to the results of the first half of 2022, the volume of commodity supplies of organizations registered in Moscow (again excluding the oil and gas component) exceeded $16.6 billion. Deliveries by organizations registered in Moscow were made to 173 countries of the world. The seven main importing countries included the United Kingdom ($1.801 billion), Belarus ($1.516 billion), Kazakhstan ($1.514 billion), Switzerland ($1.459 billion), China ($839 million), India ($711 million) and Turkey ($699 million).
According to the results of the first half of 2022, the volume of export commodity supplies of organizations and enterprises registered in Moscow to partners from the top seven importing countries amounted to $8.538 billion, or about 51.4% of the total export volume of Moscow structures (excluding products of the fuel and energy complex) – which in large part shows the changed geographical diversification of domestic exports in terms of value volumes of supplies.
The volume of commodity imports in the first half of 2022 amounted to $49.4 billion. A significant part of the purchases of import organizations registered in Moscow are consumer goods.
Goods were supplied to Moscow from 191 countries of the world. The predominant volume of purchases traditionally comes from a relatively small number of non-CIS countries, including China – $15.069 billion (an increase of 1.5% compared to the first half of 2021, with the share of total imports in the first half of 2022 coming to almost 30.5%); Germany – $3.945 billion (8.0% share); the United States of America – $3.596 billion (7.3%); Belarus – $3.126 billion (6.3%); Italy – $2.059 billion (4.2%); France – $1.936 billion (3.9%) and Turkey – $1.166 billion (2.4%). Imports of goods by Moscow-registered organizations from the leading countries amounted to $30.896 billion, or about 62.5% of total imports.
