Strategizing Russia’s Trade with Some Countries in East and South-East Asia

Abstract

As western sanctions affect Russia’s foreign policy, its foreign trade policy takes a turn to the East. Econometric modelling applied to the strategy of trade flows may reveal some important factors that affect the volume of Russian trade with Asian countries. The authors assessed the prospects for the development of trade relations between Russia and some countries of East and South-East Asia. The study focuses on international trade relations between the Russian Federation and some countries of East and South-East Asia, i.e., China, India, Vietnam, and Singapore. The methods included econometric and graphical modeling, as well as a comparative analysis. The gravity model confirmed Russia’s reorientation to the East. However, the geographic distance has a negative impact on the trade volume, increasing the delivery cost and time. Free trade areas, on the other hand, facilitate the trade, e.g., with Vietnam and Singapore. According to the gravity model, the coming years will witness an increase in the trade cooperation between the Russian Federation and the abovementioned Asian countries as Russia’s foreign trade policy gathers pace in the new geopolitical reality. A potential free trade area will strengthen Russia’s trade bonds with the People’s Republic of China.