The Russian Federal Service for Technical Regulation and Metrology announced on July 30 local time that it has banned the import and sale of certain truck models from China's Dongfeng, Foton, Jiefang, and Sinotruk Shandong trucks, citing that these models were found to violate mandatory requirements for ensuring the safety and health of drivers and other road users. Alexei Alikhanov, Minister of Industry and Trade of Russia, stated that the Chinese automotive industry is actively entering the Russian market, and its market share is continuously expanding. To "restore balance," the Russian Ministry of Industry and Trade is gradually adjusting the recycling tax, but "this measure is not enough." In addition to the recycling tax, Russia has previously revised car import regulations: starting from April 2024, vehicles transiting through Central Asian countries and then transported to Russia must pay back all kinds of taxes such as tariffs, value-added tax, and consumption tax.

(Photo source: Associated Press)

These actions by Russia are clearly targeting the Chinese automotive industry. Why has this situation arisen? The direct reason is that in recent years, the export of Chinese cars to the Russian market has increased significantly, exerting some pressure on the Russian domestic automotive industry. In 2023, the market share of Chinese cars in Russia first exceeded 50%, surpassing Russian domestic brands; in 2024, it rose to 58.3%, while Russian domestic brands fell to 33.3%.

Another reason is entirely my personal speculation — it may involve non-economic factors. The situation in the Ukraine-Russia conflict is tense, and Russia hopes to quickly achieve its war goals. Although the Russian army is advancing, the progress is quite slow, and the cost is high. Ukraine still has certain combat capabilities with Western support, so Russia naturally hopes China will increase its assistance. China obviously does not want Russia to fail strategically, but in specific actions, it is extremely cautious and may have not agreed to some of Russia's requests. Therefore, it cannot be ruled out that Russia expresses dissatisfaction by banning the export of certain Chinese enterprises' cars.

The third reason is related to long-standing issues in Russia — the country lacks sufficient respect for market rules. Russians have a high level of education, and the proportion of university students among young people even exceeds that of the United States, but this country indeed is not good at using market economy rules, and there is also a lack of inherent respect for the market economy. Policy changes suddenly occur frequently. This is similar to India, where if they don't get an advantage, they feel they have lost out, and immediately adjust policies. People who deal more with Russia often complain about its business environment.

Russian police stand on the open Red Square. (Photo source: Associated Press)

In response to this situation, Chinese auto companies should unite and try to argue with the Russian side; the relevant departments of the government should not sit idle, and need to actively express our demands, and do their best to protect the legitimate rights and interests of Chinese enterprises. If Russia persists in this issue, we cannot rule out taking economic countermeasures.

Now there is a popular saying: "If you don't go global, you are out." Chinese companies face fierce competition domestically and hope to expand their development space through going global, which is a commendable idea. But I would like to remind Chinese entrepreneurs investing in Russia, although international markets offer many opportunities, risks are also significant. The business environment in Russia is not good, and trade protectionism is very pronounced. Relevant companies need to strengthen risk assessment awareness and should not invest all their assets in a single market.

(Photo source: Internet)

I also want to remind you that last year, China's trade surplus was close to $1 trillion, setting a new historical high. This is not a good thing and will inevitably lead to problems. A trade surplus that is too large will squeeze the market space of other countries, and the other party will certainly react. Currently, the United States, Russia, and the European Union have taken relevant measures against China, and further actions may follow. This reminds us that China's economic development cannot rely too much on exports, but should focus on building a domestic circulation system, improving the national unified market, and fully tapping into the potential of domestic consumption, thereby reducing dependence on foreign trade.

Original article: https://www.toutiao.com/article/7535692708619338249/

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