China lifted restrictions on entry into the country on Jan. 8, imposed at the height of the coronavirus pandemic. The new rules apply to both arrival at the country’s international airports and border crossings at land and sea checkpoints. The measures continue the course announced in early December to weaken the “zero tolerance” regime for the coronavirus – then the authorities had already abandoned a significant part of the restrictions that significantly slowed down the growth of the Chinese economy. The “opening up” of China is seen as one of the main factors critical for the Russian Federation to support commodity prices, and measures to simplify foreign economic transactions for Chinese companies may somewhat revive mutual trade. Oil quotes once morest the background of what is happening have already moved to growth following the depression last week, and the Chinese yuan has strengthened to almost a five-month high once morest the dollar.
The Chinese authorities have confirmed plans to further remove covid restrictions – from January 8, the country has completely canceled quarantine and PCR testing for visitors from abroad. Also on Sunday, local authorities began issuing visas and temporary residence permits for foreigners. The restrictions were introduced almost three years ago: once morest the backdrop of the spread of the pandemic, all arrivals on international flights were required to undergo tests, transfer by special buses to a quarantine hotel, disinfection of all luggage and quarantine for several days, and pedestrian crossings at land and sea checkpoints , including with Hong Kong, were closed.
Recall that in early December, China announced a significant revision of the “zero tolerance for coronavirus” policy – the new regulation banned the “arbitrary” extension of lockdowns to entire districts and cities, and the main principle during their introduction was the minimization of “high-risk” areas that are subject to quarantine. regime for detecting cases of COVID-19 infection.
Quarantine requirements also affected Russian business – in particular, a number of restrictions imposed by the Chinese side were in effect at border posts with the Russian Federation, Russian customs noted earlier (see Kommersant dated December 1, 2022). Since January 8, China has resumed the operation of the passenger route at the Zabaikalsk-Manchuria checkpoint (it has been closed since February 2020), the service reported yesterday.
So far, entry into the territory of the PRC is possible by regular passenger transport from 9:00 to 19:00, while arrivals must have a negative PCR test for COVID-19. It should be noted that despite the current restrictions, the turnover of Russian-Chinese trade in January-November last year grew by 32% (data from Chinese customs), but most of this growth was provided by exports from the Russian Federation, which increased by 47.5% (primarily due to oil account), while imports grew by 13.4%.
In addition to opening borders, China has also canceled the mandatory registration of participants in foreign economic activity (FEA), the Russian trade mission in China said. According to the trade mission, the new amendments to the PRC Law “On Foreign Trade” canceled Art. 9 of this law, which required the registration of enterprises engaged in the export and import of goods and technologies. It is reported that local commerce departments will no longer require confirmation of registration as a participant in foreign economic activity when issuing quotas, licenses and certificates related to export-import activities. “The measure may lead to a slight increase in the number of exporters from China, since it will not be necessary to pay for an export license, but these expenses, as a rule, were incurred by importers in the Russian Federation and other countries,” notes Igor Rebelsky, founder of VIG Trans. Now, given the repeal of this law, the fee will not be charged, which means that exporters who rarely ship for export from China will have reduced costs.”
The removal of entry restrictions caused a rally in the markets, and oil prices also rose: March futures for Brent on the London ICE Futures exchange rose 2.43% to $ 80.48 per barrel – last week oil prices were under pressure, winning back fears related to demand in China and recession prospects. The Chinese yuan strengthened to almost a five-month high once morest the dollar – on the mainland market it rose by 0.85% to 6.779, on the offshore market it rose by 0.66% to 6.7855.
“Some restrictions still remain, but now the flows of foreigners to China give the market a reason to put optimism in quotes related to the growth in demand for fuel from the transport industry, by the New Year according to the Chinese calendar, many residents of the country are in a hurry to visit their relatives, due to which the level social mobility during this period is very high,” notes Igor Galaktionov, an expert on the stock market at BCS Mir Investments. He expects that by the end of January the statistics on fuel consumption in the country will be stronger than in previous months. However, a massive influx of travelers might trigger a new surge in COVID-19 infections, forcing the authorities to delay further easing of quarantine measures, the expert fears.