Expanding Russia-China Economic Integration Cooperation through Special Economic Zones

Abstract

In the context of a polycentric global economy, the issue of economic integration between Russia and China gains increasing relevance. This study aims to identify key areas of trade and economic cooperation between the two countries and assess the potential role of special economic zones (SEZs) in the creation of a future Russia-China free trade zone. The central hypothesis suggests that while current economic cooperation lays important groundwork for deeper integration, it also faces significant limitations and barriers. Using statistical analysis, the study evaluates the level of trade and economic ties between Russia and China through indicators such as import penetration, trade intensity, and trade entropy for both exports and imports. Results indicate that integrative cooperation is gradually strengthening: the generalized integration index increased by 43 percentage points between 2000 and 2023. However, marked asymmetries remain—Russia exports 77 % raw materials to China, while China exports 94 % industrial goods to Russia. Additionally, differences in investment and industrial development are evident: China has 14 times more special economic zones than Russia. These disparities hinder progress from trade cooperation toward full economic integration. Coordination of national policies on SEZ development, especially through reliance on global value chains, could support deeper integration and pave the way for a Russia-China free trade zone. The findings offer valuable insights for policymakers in both countries to guide the development of SEZs and support discussions on expanding economic integration.