Development of Trade and Financial-Economical Relationships between China and Russia: A Study Based on the Trade Gravity Model

ABSTRACT

This article empirically assessed new opportunities and provides a conceptual justification for promising areas of trade and financial and economic relations between China and Russia amidst ongoing global turbulence, the post-COVID situation, and sanctions pressure. The study utilized the trade gravity model, taking into account the latest trends in the development of the research subject and object, as well as current challenges and trends in the global economy. The study revealed similarities between the political systems, reforms, and policies of China and Russia, with centralized power structures overlapping and supporting each other at international forums such as the UNSC. The findings suggest that both countries plan to increase trade volume in the next two years, with China focusing more on trade and economic development, while Russia works to promote security and political stability. This study provides valuable insights into the economic relationship between Russia and China, its impact on the US and Europe, and highlights the need for effective policy interventions to address the challenges posed by this relationship. It offers significant theoretical and practical contributions, including the potential to unlock the potential of national economies, increase their competitiveness and help states enter a phase of advanced and sustainable development. This article provides several policy recommendations to ensure the long-term sustainability of the economic relationship between Russia and China and foster mutual understanding and trust between their peoples. These include promoting trade diversification, enhancing financial cooperation, addressing trade barriers, strengthening political and security coordination, mitigating negative impacts on other countries, promoting sustainable development, and fostering people-to-people exchanges. © 2023 by the authors.