Experts called for Sino-Russian trade talks yesterday after Moscow unilaterally increased tariffs on imports from China.

Wang Junwen, trade counsellor at the Chinese Embassy in Moscow, said Russia had increased tariffs on Chinese goods on Tuesday to US$3.5 per kilogram from the original US$0.4 to US$1.2 per kilogram.

But to make matters worse, the Russian Customs Committee, which made the decision, gave Chinese departments no formal notification of it, only telling customs houses, Wang said.

The committee also ordered the Chinese side to make less customs clearances for imports to Russia, Wang added.

Many Chinese goods have been delayed at customs houses, requiring the payment of hefty warehouse fees, Wang said.

The decision was due to an influx of illegal Chinese imports, claimed the Russian side, citing statistics alleging that Chinese imports to Russia totalled US$3.4 billion last year.

But Chinese data said this figure was US$6 billion.

The Russian side believed the rest of the US$2.6 billion entered the country without paying tax.

This irregular trading has aroused the attention of both the Chinese and Russian governments at the highest level, according to Wang.

Premier Wen Jiabao discussed this issue with his Russian counterpart Mikhal Kasyanov in Beijing last September, resulting in a joint communique noting that the two countries should co-operate in standardizing irregular trade and launch a joint working party as soon as possible in order to better regulate Sino-Russian trade.

"The Chinese side has formed a panel led by the Ministry of Commerce to discuss the issue, but the Russian side refused to take part in the talks, saying they could not find a suitable department," Wang said.

Liu Huaqin, a senior researcher with the Chinese Academy of International Trade and Economic Co-operation, said the irregular trade actually originated from Russia's practice of so-called "grey customs clearance.".

The Russia Customs Committee allowed a "customs clearance" company to carry out importing transactions and provide a "one stop" service combining transportation and customs clearance.

These companies, which usually have close relations with Russian Customs, offer favourable tariff policies and will not supply customs clearance manifests.

Russian customs houses also confiscated US$30 million of Chinese goods at the Emila market in Moscow this February, which mostly entered by means of "grey" clearance.

The Russian Government should cease this practice as soon as possible, as it damages the interests of both sides, said Liu.

But the prospects for Sino-Russian trade are generally promising and complementary, Liu said.

China has had a trade deficit with Russia for many years, with this situation unlikely to change despite a rapid increase in Chinese exports to Russia in recent years, she added.

The trade deficit comes mainly from rising imports of raw materials including steel, wood, fertilizers, aquatic products and oil, all necessary to fuel China's economic growth.

China's exports to Russia are mainly in the form of low value-added light industry goods which target low-income Russian consumers.

She refuted claims that the Russian move was due to China blocking its entry to the World Trade Organization (WTO).