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As Russia & China get ever closer, Beijing invites Moscow to form ‘Soybean alliance’ to help reduce reliance on US

As Russia & China get ever closer, Beijing invites Moscow to form ‘Soybean alliance’ to help reduce reliance on US
Western analysis of Russia and China's growing relationship focuses on the political, but largely ignores the fact that in economic and trade terms, both tend to complement each other. One has what the other needs, and vice versa.

The world's most populated country needs food and the world's largest state has plenty of space for farming. Now, as Beijing looks to protect the long-term security of its food supply, it has proposed the creation of a soybean alliance with Russia, to help reduce China’s reliance on the US.

Speaking to Russian Minister of Economic Development Maxim Reshetnikov, Chinese Minister of Commerce Zhong Shan called on the two neighbors to cooperate more in all stages of the soybean supply chain.

According to the Hong Kong-based newspaper, the South China Morning Post (SCMP), China is the world's largest importer of soybeans, and its trade war with the US is pushing the country to seek other soybean sources. Beijing currently has a deal with Washington, but it is looking for a greater diversity of importers.

The proposal to create a soybean alliance between Russia and China follows a June 2019 cooperation agreement, in which Russia agreed to boost soybean exports to China to 3.7 million tonnes by 2024.

Analysts believe Russia is unlikely to replace the US as a primary soybean supplier to China, according to SCMP. However, the alliance will reduce uncertainty for both Beijing and Moscow in the face of the Sino-American trade war.

“Any country faces national security risks if it is overly reliant on an individual nation in crucial sectors such as grains and pharmaceuticals,” said Chen Bo, a professor of economics and trade at Huazhong University of Science and Technology, in Wuhan. “China is hoping to deepen cooperation with various countries to secure its interests in soybean supply over the long term, and Russia is one of them.”

As things stand, Brazil and the US account for about 90 percent of total imports to China, with Russian soybeans at less than 1 percent.

During the height of the Covid-19 pandemic, Russia restricted the export of its grain products, as the country focused on its own food security.

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