Chinese car firms accelerate development in Russia

In the Obuhav Motor City in the south of Moscow, the 4S shop of Chinese car brand Geely is eye-catching. The interior decoration of the store is brilliant and the auto models are shining under the lights.

In addition to Geely Automobile, Great Wall Motor’s factory is also expected to be put into production in Russia next year. Lifan, another Chinese auto company, is also actively launching new models suitable for local demand. Chinese auto companies are increasingly popular in the Russian market.

Chinese cars have a good localization rate and be loved by local consumers. A reporter met the Anatoly family who just bought a new car at Geely Automobile 4S. “How is the car experience?” asked the reporter. In response, Anatoly answered, “Have you seen the expression on the faces of our family of three?” Indeed, the happiness on their faces has been explained all undoubtedly.

In 2017, Geely Automobile established a joint venture factory in Belarus. Bo Yue and Di Hao models that are now mainly sold in the Russian market are all produced in factories in Belarus. After reaching the design capacity in the future, they will expand the market to the entire CIS and even the entire Eastern Europe.

Great Wall Motor entered the Russian market as early as 2004, and the local ownership has exceeded 100,000 units. At present, Great Wall Motor’s investment in the Tula, a state of Russia, is about 500 million US dollars, and the establishment of the factory with an annual production capacity of 150,000 units has entered the final stage. It is expected that after the completion of establishment in 2019, the localization rate will be further improved.

In the view of automakers in various countries, the Russian market is huge and the consumption potential needs there is to be released. Despite of the attractive market prospects, the competition is fierce. In order to gain a market share in the Russia, all Chinese automakers have been eagerly striving. For example, Chery Automobile has accurately positioned the target customers-the middle class between 35 and 55 years old, for its two kinds of cars in Russia by doing market research.

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Russia continues oil trade with Iran despite of US sanctions

Russia vowed to continue its oil trade with Iran to prevent the United States from curbing its oil sales since the November 5th when the US sanctions against OPEC producers came into effect.

The United States will re-enact sanctions aimed at curbing Iran’s oil exports, and the Trump administration has warned Moscow not to take any action that might help the Islamic Republic of Iran to evade US sanctions measures.

But Russian Energy Minister Alexander Novak told the Financial Times that Russia was seeking to continue to develop trade with Iran, regardless of sanctions.

Nowak said: “We believe that we should look for a mechanism that will allow us to continue to cooperate with our partner Iran.”

The Russian Foreign Ministry said that after the United States imposed sanctions, he could clearly confirm that trade would continue.

Last week, during the visit of John Donald, the hawkish national security adviser to President Donald Trump, some US officials warned their Russian counterparts not to try to assist Iran in selling oil on the international market.

However, analysts and business people predicted that Russia would continue to export at least 1 million barrels a day after November 5th, mainly to Asian countries that were willing to ignore sanctions or could get US exemptions. Concerns over a sharp drop in Iranian exports have pushed oil prices to a four-year high of more than $86 a barrel last month.

At the same time, it was reported that the United States had agreed to allow eight countries, including Japan, India and South Korea, to continue to purchase Iranian oil after re-implementing sanctions against the OPEC producers on November 5th.

Sino-Russia bilateral settlement adopt their own system to reduce risks

Russian media said that in the first 10 months of 2018, the amount of RMB-Ruble swaps on the Moscow Stock Exchange was almost 1.5 times that of the 2017 annual exchange. This was introduced to the reporter by Igor Maric, managing director of the Moscow Stock Exchange on currency and derivatives market. Earlier, Russia and China reached an agreement to expand the use of the ruble and the renminbi in bilateral trade services.

According to a report by the Russian Satellite News Agency on November 28th, the Russian Central Bank and the People’s Bank of China signed a currency swap agreement as early as 2014. At that time, the swap transaction amount in the agreement was 815 billion rubles and 150 billion yuan for a period of 3 years. From the statistics, the trial was successful. According to data from the Moscow Stock Exchange, in the first 10 months of 2018, the RMB-Ruble swap transaction amounted to 943 billion rubles. According to the report of the People’s Bank of China, the RMB business volume used to purchase ruble in the interbank market in China increased by 105.3% in the third quarter of 2018, reaching 4.9 billion yuan, almost doubled that of the same period last year.

The report said that both China and Russia believed that Russia and China were under the pressure of US unilateralism. Liu Ying, a researcher at the Chongyang Financial Research Institute of Renmin University of China, said that the use of local currency in international settlements would help to challenge the hegemony of the dollar and protect the country from possible pressure from the US.