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The St. Petersburg government is to launch a pilot scheme for local SME exporters, providing subsidies for domestic businesses in the city looking to access markets in Eastern China. At the initial stage, it is planned to access four major ports in China: Qingdao, Shanghai, Ningbo, and Guangzhou. The initiative has been arranged by the St. Petersburg Export Support Centre.
The first 40-foot container with goods from St. Petersburg manufacturers is planned to be sent to China in June, with the carrier to be selected as part of a competitive tender. Artem Kaloshin, the General Director of the centre said that “First, we want to send the first test batch to China, and after receiving feedback from exporting companies, we want to put the process on stream.”
After the initial stage is completed and fully operational in East China, it is planned to include ports in Latin America, Africa and India. Kaloshin did not specify the amount of government funding available for the new program, saying only that the amount will depend on the number of applications submitted, but in the future it could amount to tens of millions of rubles per annum. According to the General Administration of Customs of China, trade turnover between Russia and China in 2023 increased by 26.3%, amounting to a record US$240 billion. At the end of the first quarter of 2024, trade turnover between Russia and China increased by 5.2% and amounted to US$56.68 billion.
In January-March of this year, the volume of supplies from China to Russia increased by 2.6%, and supplies from Russia to China increased by 7.3%. “We collect applications for a certain direction, if there are enough of them to fill the container at least two-thirds, the Export Support Centre negotiates with logistics companies that freight the container,” Kaloshin explained.
The city budget pays 100% of the costs for container freight, customs clearance, agency support and cargo consolidation, as well as storage of products in a warehouse in St. Petersburg and its delivery to the port. In order to participate in the program, the company must be registered in St. Petersburg and be in the register of SMEs.
There are no restrictions on the types of products for export, with the exception of perishable goods. Most product will be non-perishable goods, including food, and engineering products. In fact, the new program, which is being implemented within the framework of the national project “Small and Medium Enterprises and Support for Individual Entrepreneurial Initiatives,” is an addition to another, already existing program to support SME exporters. It includes payment of 80% costs for transporting products across Russia. The amount of support for one SME can reach up to ₽1 million (US$10,800) or 5% of the amount of exports.
Any opportunity to reduce transportation costs will allow exporters to increase the volume of transported products and expand their geographical reach.
Costs will be reduced due to the full filling of containers, since at the moment SME exporters cannot always fully load a full container. The significance of this program lies in the fact that it affects small and medium-sized businesses, since this will help consolidate loads.
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