Deepening Russia China economic ties spell opportunity to target counterfeiting
As the relationship between the West and Russia has become increasingly turbulent in recent years, Russia's relationship with China has been growing in importance.
While bilateral trade had dropped to $40 billion in 2016, down from a high of around $90 billion a few years earlier, reports suggest both countries are aiming to make additional efforts to increase trade to $200 billion in the next few years.
The future potential of this trading relationship will benefit from China's One Belt, One Road (OBOR), a development strategy and framework that integrates trade and investment in Eurasia, as well as in other regions. One of the OBOR aims is to demonstrate China’s commitment to facilitating a more fluid movement of goods into Russia, Eurasian economies, and Europe. A very prominent example of this is the recent launch of rail freight service from China to London that passes through Russia and is subject to that region’s Customs Union's regulations.
Although these actions will increase the ease of transportation, especially overland, it will also create some risk. In 2016, the Organisation for Economic Co-operation and Development estimated that the global trade in counterfeits is worth almost a half-trillion dollars, with the OECD reporting that more than half of counterfeit goods are coming from China. Goods coming from China will pass through regions that are part of the Eurasian Customs Union, some of which have little to no Customs checks, potentially allowing counterfeit goods to flow through with relative ease. Whilst the deepening economic ties between Russia and China are certainly an encouraging development, businesses operating in the region will need to observe how the two countries collaborate to curtail the ongoing counterfeiting menace.