Made in Russia? Assessing Russia’s potential for import substitution
Simola, Heli (05.05.2022)
Numero
3/2022Julkaisija
Bank of Finland
2022
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-202205051182Tiivistelmä
Russia’s brutal military aggression on Ukraine has led to extensive economic sanctions by Western countries and the withdrawal of many foreign companies from Russian markets. The isolation of Russia from the international community has substantially restricted its access to advanced technologies and eroded the country’s economic growth potential. Our analysis suggests that Russia has fairly limited possibilities for import substitution in high-technology sectors. China, which could play a key role as an alternative source for inputs, has seen its share of Russian imports, including high-tech inputs, increase substantially in recent years. The extent to which China is willing to support Russia in the current situation remains unclear, however.
Sisällysluettelo
Abstract ... 3
1. Introduction ... 4
2. Russia’s total import dependence and production structure ... 4
3. Import dependence of Russian production ... 6
3.1 Russia is most dependent on imported inputs in high-technology ... 7
3.1.1 Russian machinery and equipment manufacturing sectors are most dependent on imported inputs ... 7
3.1.2 Russia relies on imports particularly for machinery and equipment ... 8
3.2 Perspectives for Russian import substitution are meagre ... 9
3.2.1 Success of import substitution in the agricultural sector has been limited...9
3.2.2 Russia has limited potential to replace imports by reorienting exports ... 10
3.2.3 Survey results highlight problems related to import substitution ... 10
4. Geographical origin of Russia’s imported inputs ... 11
4.1 EU is still the largest provider of imported inputs, but share has decreased...12
4.2 Origin of imports by Russian end-use industry ... 13
4.3 EU dominates high-technology input imports, but China’s share has increased ... 14
4.4 Assessing China’s potential to replace Western imports ... 16
5. Concluding remarks ... 17
References ... 18
1. Introduction ... 4
2. Russia’s total import dependence and production structure ... 4
3. Import dependence of Russian production ... 6
3.1 Russia is most dependent on imported inputs in high-technology ... 7
3.1.1 Russian machinery and equipment manufacturing sectors are most dependent on imported inputs ... 7
3.1.2 Russia relies on imports particularly for machinery and equipment ... 8
3.2 Perspectives for Russian import substitution are meagre ... 9
3.2.1 Success of import substitution in the agricultural sector has been limited...9
3.2.2 Russia has limited potential to replace imports by reorienting exports ... 10
3.2.3 Survey results highlight problems related to import substitution ... 10
4. Geographical origin of Russia’s imported inputs ... 11
4.1 EU is still the largest provider of imported inputs, but share has decreased...12
4.2 Origin of imports by Russian end-use industry ... 13
4.3 EU dominates high-technology input imports, but China’s share has increased ... 14
4.4 Assessing China’s potential to replace Western imports ... 16
5. Concluding remarks ... 17
References ... 18