Sinorussian Forum

Sino-Russian Forum Chapter1. Historical Retrospection of Sino-USSR Trade Sino-R.S.S.R trade started even before the establishment of the Peoples Republic of China. In August 1946, the Chinese Communist Party Northeast Bureau reached an agreement with the Soviet Union to exchange clothes, medicine and other daily necessities with foodstuff. At the end of the year, a small-scale trade began. The trade relation between China and USSR had experienced great changes since the establishment of the Peoples Republic of China. From the moment in 1949 to the disintegration of the USSR in 1991, there are several stages in the development of the Sino-USSR trade relation: the golden times in the 50s, the decline in the 60s, the stagnation in the 60s and the rapid growth in the 80s.

1. The golden times in the 1950s The1950s is the period that Sino-USSR trade grew quickly. In the second day after the Peoples Republic of China announced her establishment (October 2,1949) , the Soviet government officially admitted the Chinese government and established an ambassadorial diplomatic relations with china. In April 19,1950, the two governments signed the first trade agreement The Trade Agreement Between The Peoples Republic Of China Government and The Union Of Soviet Socialist Republics Government. It was the first trade agreement that China signed with a foreign country. It established a solid foundation for the development of the trade between the two countries.

In 1957 and 1958, another two agreement was signed. They included items about transportation and most-favored-treatment clause in economics. They had great meanings in promoting the economic and trade relations between China and USSR The large-scale economic cooperation between China and USSR brought the quick growth of the trade amount between the two countries. In 1950, the total Sino-R.S.S.R trade amount was 3338.4 million dollars and ranked first in the foreign trade partners of the China. In 1955, the total trade amount was 1789.9 million dollars, which was two-third of the amount of the Chinese foreign trade.

It was the year that Sino-USSR trade amount took the biggest proportion in the total Chinese foreign trade amount. In 1959, the trade amount reached 2097 million dollars which was the 5.2 times of that in 1950. USSR was the biggest trade partner of China. Her proportion in the foreign trade of China kept at 40%-50percentage except in 1950. Table of sino-USSR trade amount in the 1950s (unit: ten thousand dollars) Year Total trade amount Exports Imports Proportion to Chinese foreign trade (%) 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 33 844 80 860 106 142 125 823 129 124 178 985 152 377 136 470 153 857 209 700 166 394 15 325 31 129 41 204 48 061 58 663 67 021 76 168 74 697 89 887 111 794 81 878 18 519 49 731 65 217 77 762 70 461 111 64 76 209 61 773 63 970 97 906 84 516 29.8 41.4 54.8 53.1 53.1 56.9 47.5 44.0 39.8 47.9 43.7 Original sources: Chinese Foreign Economics and Trade Annual What China mainly exported to USSR were agricultural products and by-products like rice, soy bean, tea, meat and vegetable oil; light industrial products; mineral resources and rare metals.

What China imported were mainly equipment and military orders. From 1953 to 1957, the proportion of machines imported from USSR to the total Sino-USSR imports was 34%, 33% were machines in sets. To 1959, the proportions respectively rose to 62.2%and 41.9%. China also imported petrologic products like petrol, lubricant and kerosene; raw materials like steal and cotton. 2. The Decline in the 60s The Chinese Communist Party and the Soviet Communist Party had diverged in ideology since 1956.

Their divergence became bigger and bigger which deteriorated the relation between the two countries, produced direct and serious effects on the development of economic, and trade relations between the two countries. Bilateral trade sharply decreased and economic cooperation entirely stopped. In 1960, USSR tore up 12 agreements, recalled all the experts in China, stopped 257 technological cooperation items, and refused to supply mineral resources like cobalt and nickel that China needed urgently and greatly decreased the export of machines and important accessories. All these brought great destruction to the economy of China. The trade amount sharply decreased to 827.9 million dollars in 1961,which was just half of the amount in 1960 and one third of the amount in 1959. In 1970, sino-USSR trade amount dropped to the lowest point in the historyonly 4.723 million dollars which was 2.25% of the amount of 1959.

This number was only 1% of the total Chinese foreign trade and 0.2% of the USSR foreign trade. USSRs rank in foreign trade partners of China fell from the first one in the 50s to the fourteenth. To pay back the loans borrowed from USSR, China decreased import as well as increased export. From 1961 to 1965, the trade surplus of China to USSR added up to 950 million dollars. Table of Sino-USSR trade amount in the 60s (unit: ten thousand dollars) Year Total trade amount Export Import Proportion to Chinese foreign trade (%) 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 82 791 70 158 60 106 44 522 40 744 30 514 11 141 9 214 5 422 4 723 53 626 49 066 40 678 31 164 22 167 14 041 5 547 3 293 2 724 2 317 29 165 21 092 19 428 13 358 18 577 16 473 5 594 5 921 2 698 2 406 28.2 26.4 20.6 12.9 9.6 6.6 2.7 2.3 1.3 1.03 Original resources: Chinese Foreign Economics and Trade Annual There were also some changes in goods structure in the 1960s. Since China had petrolic products form USSR since 1966. Machines were still the body of Chinese import from USSR, but the quantities greatly reduced.

For example, in 1960 USSR exported machines worth of 450 million rubles, which was only four percent of the total machine export when it came to 1965. China stopped to export rice and soybean to USSR because the reduction in agricultural production in the early 60s. However, the main exports were still agricultural production and mineral resources. 3. The stagnation period in the 70s The 70s were the period that China and USSR kept opposing each other, so the trade between the two countries remained in a low level. However, their trade relation revealed a tendency of slow increasement because of the necessity compared with that of the late 60s.

The Sino-USSR trade amount of 1971 was 149 million dollars which was the 3.17 times of that of 1970.It increased another 50% in 1972 .The amount kept rising at a low speed after that. Still the Sino-USSR trade remained low and didnt recover to the level of the late 50s .The proportion of Sino-USSR trade to Chinese foreign trade was only 1.3%. The proportion of Sino-USSR trade to USSRs foreign trade was even less, only 0.2%, which was the thirty-third in USSRs trade partners. The Sino-USSR Trade Amount in the 70s (unit: ten thousand dollars) Year Total trade amount Export Import Proportion to the Chinese foreign trade (%) 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 14 927 25 033 26 177 29 999 29 725 41 473 32 904 4 3 653 49 262 49 242 8 093 13 350 13 343 15 495 15 130 16 838 17 645 22 966 24 223 22 830 6 834 11 683 12 834 14 504 14 595 24 635 15 259 20 678 25 039 26 412 3.08 3.97 2.39 2.06 2.01 3.09 2.22 2.12 1.68 1.30 Original resources: Chinese Foreign Economics and Trade Annual The Sino-USSR goods structure in the 70s was this: USSR exported machines, transportation and steel. USSR also exported wood to China since 1972. China exported industrial consumer good, food and its ingredients, mineral resources and metals, etc to China.

4. Rapid development in the 80s The Sino-USSR relation has moderated since 1980. In May 1989, the USSR president Gorbachev visited China, which normalized the relationship between the two countries. The both governments took an active attitude towards trade, which cause a rapid development. In the 80s, Sino-USSR trade developed at a rather high speed except one or two years.

The average growth rate from 1981 to 1986 was 68%. The trade amount in 1990 was 4380 million 4380 million dollars which was the 18.5 times of that of 1981. The rank of USSR in the foreign partners of China rose to the fifth after HongKong and Macao, Japan, US and Germany. The rank of China in the foreign trade partners of USSR rose to the fifteenth in the 80s from the thirty-third in the 70s. However, the trade amount was quite low considering the potentiality of the two countries.

Table of the Sino-USSR Trade Amount in the 80s (Unit: ten thousand dollars) Year Total trade amount exports imports Proportion to Chinese Foreign trade (%) 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991* 22 490 27 590 67 386 118 307 188 140 263 766 230 339 290 151 367 725 437 911 390 426 11 648 13 889 32 815 61 539 96 837 120 800 117 197 149 507 176 063 223 919 182 338 10 842 13 701 34 571 56 768 97 303 142 966 113 142 140 644 191 662 213 992 208 087 0.6 0.7 1.7 2.4 3.1 4.4 3.4 3.6 4.5 3.8 2.9 Original resources: Chinese Foreign Economic and Trade Annual * 80% accomplished by RSFSR 5. Conclusions Take a wide view of the Sino-USSR trade history, the following specialties can be seen: First, Sino-USSR political relation directly restricted the Sino-USSR economic and trades relations. The trade relation experiences dramatic changes during the forty years. It became the tool and victim of the political struggles, which was especially clearly revealed in the 60s and the 70s. It brought great losses both to China and Russia.

Second, the Sino-USSR trade was carried out yearly by the official plans. Government administrated and regulated the trade between the two countries and market did not work here. It was opposed the economic regulations. This environment restrained the enthusiasm of the manufacturers and limited the development of Sino-USSR trade. Third, China and USSR could have complementaried each other very well in economics.

However, the export structures of the two countries were single. This kind of structure was a disadvantage in bringing the potentiality of the Sino-USSR trade into full play. It became an outstanding problem in the late 80s and the following years. Fourth, having experienced a stagnation of twenty years, the development of Sino-USSR (Sino-Russia) trade many problems. The hardware including bank system, transportation, communication system and the software like opinions, political policy are two old or even not existed, which can hardly be suitable to the development of the Sino-Russia trade under the open policy.

These problems must be solved from the beginning. It will surely lay a negative effect on the development of the Sino-Russia trade relation. Chapter2. Present Situation of Sino-Russia International Trade 1. MAIN CHANNELS AND FORMS OF SINO-RUSSIA INTERNATIONAL TRADE Nowadays some of the channels and forms of Sino-Russia International Trade are traditional, yet some are new-born with the development of economic situation. Certainly, some new changes also took place in some traditional channels and forms during the period of practice. 1.1 Main Channels Since Sino-Russia International Trade is the continuation of Sino-Soviet Union International Trade, it is inevitable to begin this part from the Sino-Soviet Union International Trade/ *Conventional Trade Between Governments Conventional Trade between governments is usually called Trade of States or Big Trade, which is the main channel adopted by governments of China and Soviet Union to develop the economic relations.

Conventional Trade between governments is a traditional way and it adopted the way of keeping accounts according to the trade between governments by means of one-year goods exchange and payments agreements. That means that after every specialized company concludes a transaction according to the regulations of agreement between two governments, the head office of foreign trade will assign the detailed account of exported goods as a mandatory planning to local imports and exports corporations. Because of the reform in respective trade system, the proportion of this kind of trade gradually comes down. At the same time, the frontier trade and the local trade play a more and more important role. For example, from 1987 to 1989,the volume of trade between the Chinese government and the government of Soviet Union dropped 300,000,000 francs, however, the frontier trade between the Chinese coastal provinces and Siberia of Russia has risen to 900,000,000 francs.

In1991, conventional trade between two governments has been replaced by the Xianhui Trade ,at that time , the conventional trade makes up 43%of the total volume of trade. In 1993, 80%of Sino-Russia international trade depends on frontier trade and direct trade between enterprises of two countries . * Frontier Trade Frontier trade as a channel of trade has lasted for a long time. Frontier trade always regards barter trade as the main form of trade. Till the early 90’s, barter trade makes up about 80%of Sino-Soviet Union trade and Sino-Russia frontier trade. Later the relations of economic trade in frontier region have been developing from the primitive simple exchange of goods to the establishment of jointly owned enterprises.

A detailed description about the frontier trade will be discussed later. *Local Trade At the end of 80’s , with the rapid development of trade especially local trade between China and Soviet Union, the necessity of establishing economic relations directly between localities and the departments of two countries is steadily on the increase. Under that situation, after heated discussion, China and Soviet Union reached an agreement about the direct establishment of economic trade relations between respective localities. Sino-Russia international trade has inherited this channel of trade. The local trade means that each province, autonomous region, municipality directly under the central government and other authorized enterprises in China develop the relations of foreign trade directly with Russian departments concerned. It is not restricted in the barter trade and it includes all kinds of forms of economic collaborations such as export of labor services, contracts for projects and so on.

The direct economic trade relations between departments of China and Russia also belong to local trade. No doubt, sometimes it is difficult to draw a clear line between frontier trade and local trade. Frontier provinces can make use of the advantages of in geography to develop frontier trade extensively. Those inland provinces also can develop various economic relations with Russia by way of frontier trade. It is initiative in the history of Sino-Russia international trade to establish the relations of economic trade directly between two countries ‘ localities (frontier provinces are excluded).

Because of the appearance of local trade, Sino-Russia trade has formed a new aspect which includes conventional trade, local trade and frontier trade. After Soviet Union disintegrated, the contact between two countries’ localities has been further developed. In order to legalize such a contact, China and Russia signed an agreement about this point, which gave definite regulations on a series of legal problems concerning the relations of frontier trade between two countries. 1.2 Main Forms ?Barter Trade Barter trade is a traditional way in Sino-Soviet Union and Sino-Russia trade, which occupies a special position in Sino-Russia economic collaboration. No matter it is keeping-account conventional trade or local trade, both is underway by means of barter trade.

Every year two sides will sign a protocol about exchange of goods and payment agreement between two countries . Such a protocol makes a detailed regulation on assortment of goods, quality, amount of money and so on. According to the manifest regulated by two countries, barter trade requires that import and export corporations belonged to two countries’ ministries of foreign trade concretely. Barter trade belongs to visible trade, in which both sides don’t need to put to use foreign exchange. Instead of defraying cash and cashing the payment for goods, two sides settle accounts on the delivery check by means of banks.

By respectively adding up the total of exchanged goods, both sides can keep the balance between import and export. If one side decays delivery, after being confirmed by two sides, this delivery will be carried out in the next year. Barter trade is a primitive and traditional form of trade, which is inevitable in the poor developed system of foreign exchange. As we all know, both China and Russia are countries without capacity to earn foreign exchange through export and insufficient foreign exchange reserve. What’s more, China and Russia can’t use hard currency to import urgent goods required by domestic market. The form of barter trade is in keeping with the necessity and interests of two sides. For example, China can export advantageous products such as textile, products of light industry and food so as to get those short-supplied means of productions such as steels, wood, etc and some durable goods like piano and refrigerator.

It’s the same with Russia. ?Xianhui Trade It is a modern and standard form of trade and consequently the most promising one. According to the agreement signed in October2nd, 1990, the conventional trade between China and Soviet Union was replace by Xianhui Trade from the year of 1991. Unlike the traditional barter trade, the Xianhui Trade needs to draw on hard currencey, which is difficult to China and Russia, two countries without sufficient foreign exchange reserve. Thus the volume of trade between China and Russia in 1991 came down obviously to only $390,000.000.

In the early 90’s,it was still very difficult for China and Russia to develop Xianhui Trade since both countries had not sufficient foreign exchange and necessary financial setup. However, with the adjustment of the relations in trade between two countries, such a modernized and normal Xianhui Trade will play a more and more important role in Sino-Russia trade. ?Frontier trade Usually it means that those inhabitants living in the frontier regions go to the designated place to make a deal in the means of barter trade . According to the agreement, infrastructures and places of trade are built in designated place. Inhabitants of the border area and travelling traders can display and sell goods in the business district without using passports and visas. ?Trade of Tourism Trade of tourism means doing business by the means of tourism. Merchants of China and Russia can carry their own countries’ commodities to sell in the places of tourism. The character of this form of trade is :?a?The quick circulation of fund ?b?Simple way of doing business ?c?Sensitive reactions to the ever-changing market ?Air-business Corridor After the disintegration of Soviet Union, China and Russia started this new form of trade.

When merchants in China and Russia have paid some expense to the Russian airline companies, airline companies will not only guarantee to transport the products to the designated place, but also pay for the customs duty for merchants. Thus, Tianjing, Jinan, Shengyang in China and many cities in Russia have formed this special Air-business corridor. 2. NEW DEVELOPMENTS IN SINO-RUSSIA INTERNATIONAL TRADE After the cold war, people emphasized the economic factor all over the world. In Sino-Russia relationship, the relation in trade has been paid much attention to by both governments. ? The course of development in Sino-Russia trade Generally speaking, in the period of six years (from 1992 to 1997), rapid progress has been made in Sino-Russia trade relationship although the Sino-Russia trade relationship was not so steady.

.Volume of Sino-Russia Trade From 1991 To 1997 (unit :$10,000) Year Total volume of import and export trade Decrease compared with last year(%) 1991 390425 -10.8 1992 586240 +50.2 1993 767966 +31.0 1994 507599 -33.9 1995 546332 +7.6 1996 684612 +25.3 1997 612000 -10.0 According to the diagram, the Sino-Russia trade relationship had gone through three periods: rapid development, great decline and adjustment for improvement #1992~1993 The Period of Rapid Development At the end of 1991, after the negotiation, China and Russia reached a series of agreements, which successfully realized the transition from the relationship of the Sino-Soviet Union to that of the Sino-Russia. The government of Russia showed that Russia would acknowledge and inherit all the agreements and contracts signed between China and Soviet Union, hoping that Russia could extend mutual economic and technological cooperation with China. After President Yeltsin and Premier Li Peng met in New York in January31, 1992, all the departments of external economy in Russia were required to enter the practical work at once in order to fulfil those contracts. What’s more, all the enterprises were called on to take an active participation in the economic cooperation with China. The president of Russia also extended a warm welcome to any suggestion proposed by China to develop the economic relations.

After Deng Xiaoping made important statements in the south of China in the spring of 1992, China opened the trading port to Russia and provided all kinds of preferential policies to enterprises and companies in frontier region as well. At that time, Russia experienced economic crisis, which caused the great shortage of commodities especially food and daily necessities. Russia was in great need of Chinese commodities through import. In order to promote trade, Russia also decided to rescind the rigid rules about that both countries must use foreign exchange in trade. Under the encouragement from both sides, Sino-Russia trade took on a new look. The disintegration of Soviet Union produced the turbulent Russian political situation.

The economy of Russia fell into the crisis with the year after year of decrease in the production and foreign trade. However, during that period, Sino-Russia trade increased by a big margin instead of decreasing and the turnover reached 58.62 hundred million dollars which was 52.2% higher than that of Sino-Soviet Union trade in 1991.And the volume of Chinese export was 23.3 hundred million dollars, the volume of import was35.3 hundred million dollars. China ranked third among the trade partners of Russia, only after Germany and Italy. Russia ranked fifth among the trade partners of China after Hongkong, Japan, U.S.A and Germany. Sino-Russia trade from 1992 to 1993 had broken through the former pattern in which the focus was conventional trade between the governments.

Furthermore, frontier trade occupied a more and more important proportion. A considerable part of Sino-Russia trade (1992~1993)was barter trade. In 1993,China mainly imported steel products, chemical fertilizer, wood etc. While food, products of light industry, daily necessities are exported to Russia .In the Chinese export ,products for civil use occupied 45%of total export .During that period ,China and Russia also had a new development on the cooperation in other aspects . If people make a general survey of Sino-Russia trade from1992 to 193, they may draw following conclusions: ?Most of the factors which promoted the increase of Sino-Russia trade are accidental and temporary such as the severe shortage in Russia market ,the lack of foreign exchange in Russia trade partners and so on. ?The principal part of trade was intermingled with the good and the bad. Many units and individuals that participated in the trade were not qualified for dealing with international trade ?The improper regulations from the countries caused the disorder in the market. ? The forms of trade were primitive for most of them were barter trade.

3. 1994~1995 Big Decline After two years of development in Sino-Russia trade from 1992 to 1993, there was a big decrease in the volume of the trade in 1994. In 1994, China ranked seventh among Russia trade partners. Actually, the tendency of decline had shown the sign at the end of 1993. The occurrence of this decline is not accidental. In the past, Sino-Russia trade was carried out mainly between the governments.

The disintegration of the Soviet Union indirectly influenced the reforms of both sides systems of trade. 80% of Sino-Russia trade were realized by the means of frontier trade and local trade. Profiteers and enterprises were main force. Whats more, most of the trade were barter trade. Without the general guidance and efficient preparation, it was impossible for such a popularity of frontier trade and local trade to last for a long time.

Thus, the negative influence from the spontaneous market was soon exposed. During that period, many Chinese products of inferior quality entered Russian market, as well as a few poorly qualified people. They not only destroyed the prestige of Chinese products but also erected barriers for the Chinese products entrance into Russian Market .All that raised doubts held by some Russians toward China, which is sure to be harmful to China. The following are the reasons of that decline: ?From the late 1993, the government of Russia began to restrict barter trade. ?China and Russia began to carry out the system of transit visa from the January, 28,1994.Surely it is necessary to carry out that system to improve the system of entry (exit) visa, however, it also brings a lot of inconvenience to those enterprises that want to do business directly in spite of the lack of modern means of communication. ?The decline of Russian economy and shortage of export sources had a great influence on Russian ability to export. Russian reform in price and customs duty caused the rise of products rise.

? The open policy of Russia and various channels of import produced the abundance of products in the market. Chinese traditional structure of export products had been used to the change in the consumer market in Russia. ? In order to prevent the economy from being too hot, China adopted the policy of retrench, which influenced the Chinese demands for raw materials and machine equipment from Russia. ? The instability of Russian domestic economic and political situation affected Russian ability to carry out the resolutions, at the same time, it also affected the interest and confidence held by big enterprises and companies in China to invest in Russia in large scale. Besides those economic factors, some political factors are included, especially those so-called the problem of commercial immigrants in China. The considerable influence was exerted by that problem on Sino-Russia trade, especially frontier trade and local trade. The governments and foreign ministries of both sides took a calm and realistic attitude toward it.

Both sides have reached a series of agreements on the construction of systems and laws in frontier region so as to develop ties of peace , friendship and prosperity between China and Russia. #The Adjustment and Improvement Period since 1996 Since 1996, China and Russia have taken some measures to try to solve the problems in the both sides cooperation in economy and trade. ?Propose the objective of a struggle to increase the volume of Sino-Russia trade From April ,24 to 26 in 1996, President Yeltsin paid an official visit to China . Both sides determined to take the advantages of neighboring regions and mutually complementary economy and take some strong measures to further enlarge and develop bilateral trade. President Yeltsin pointed out that presents volume of bilateral trade 55 hundred million dollars should be raised to 220 hundred million dollars .China and Russia signed over ten documents about cooperation.

During Li Pengs official visit to Russia from December26to 28 ,1996,both sides further discussed measures to strengthen cooperation. They agreed that China and Russia should try best to raise the volume of Sino-Russia trade to 80 hundred million dollars in 1997. What’s more, both sides thought it possible to realize the objective of the struggle in the year of 2000—200 hundred million dollars. When premiers of two countries met, they signed an agreement about the construction of Li Yungang Nuclear Power Plant and an agreement about the cooperation between Chinese Peoples Bank and Russian Central Bank. Jiang Zemin paid an official visit to Russia from April 22 to 26 in 1997 and he stressed that in order to realize the objective of 200 hundred million dollars at the end of that century, both sides should try to raise the volume of bilateral trade to 80 or 100 hundred million dollars in 1997 first. ?Recognition of the Importance of Bilateral Relations in Economy and Trade The governments of China and Russia have paid attention to the development of cooperative relationship in economy and trade.

They all regarded it as an important part in two countries strategic cooperative partnership. On the November 9, 1997, China and Russia emphasized the cooperation in the following fields: ?The production of natural gases, petroleum, nuclear, energy equipment and cooperation in civil aviation, chemistry, food industry, electrical household appliances etc. ?Cooperation in banks, insurance and arbitration, the improvement in the quality of products mutually provided, measures are to be taken to adjust the export of labor services. ?The encouragement of turning the high technology into production. Chapter3. Problems existing in the Sino-Russia trade relations: 1.

Problems existing 1.1 Chinese commodities continue to be synonymous with the cheap and low quality goods, despite the efforts of trade officials to improve quality. This is due to many reasons. Firstly, the border trade communication lacks the effective supervision, so this communication is just in disorder. Many small trade companies of both sides are eager for quick success and instant benefits, so Chinas many counterfeit goods pour into Russia market. It is reported that Some Russian cities has even held some Chinas counterfeit goods shows, which shows the paper jacket, chicken leather outwear, and so on.

More seriously, now more and more Russian consumers also begin to distrust many Chinese companies with good reputation. However, now Korean and Japanese competitors also try their best to enter the vast Russia market with their high-quality goods. Russian shuttle traders have shifted their attention to these developing countries like Indonesian as the market in Chinese goods has reached its limit. In 1997 and 1998 the devaluation in Southeast Asian economies as a result of the financial crisis will make their exports much more competitive. Thus Chinese goods are just losing a lot of the Russian market share. Secondly, the illegal traveling trade is still rampant.

Sino-Russian border and local trade now constituted one-third of the total bilateral trade volume, it was revealed at a symposium of Sino-Russian border and local trade held here recently. Many pedlars make use of the traveling trade to transport counterfeit goods into Russian market and thus destroy the overall image of Chinese goods. These pedlars have many advantages over big trade companies with good credit, for example, they have fewer management links and more flexible trade tricks, and they could provide much cheaper goods. More important, they cannot be easily supervised, so sometimes they dare to sell seconds at best quality prices and mix the spurious with the genuine. Thirdly, the border trade authorities have not paid enough attention to the commodity quality.

Some Chinese trade units regard Russia market as the so-called parallel market, which can absorb low-grade co …