BEIJING -- China on Thursday reported a sharp fall in its trade with Russia, with fake and low-quality goods stockpiled on both sides of the border in a welter of broken contracts and unpaid bills.


Customs figures showed that bilateral trade in the first half of the year was $2.24 billion, down 39 percent from the same 1993 period. China's exports were $700 million, down 47.8 percent, and imports $1.54 billion, down 34 percent.


Traders blamed the fall on a flood of low-quality goods sold by both sides since the middle of last year -- many by inexperienced private firms doing business for the first time after the collapse of the planned economy in both countries.


"What has happened is very unfortunate," one Chinese trade official said. "We have the cheap consumer goods and foodstuffs that they need and they have tractors, cars, fertilizer and other raw materials."


Official Chinese reports say there are huge stockpiles of Russian steel, cars, machinery and equipment at Chinese border cities, with 800 million yuan ($92 million) worth at Heihe in the northern province of Heilongjiang. The Chinese official said this stockpiling had led to severe cash shortages and heavy losses for trading firms, some of which had gone bankrupt.


One Russian trader said Russia had been flooded with low-quality Chinese goods, including sports shoes and clothes, electrical appliances that gave users shocks, down jackets full of chicken feathers and liquor that could kill.


"So Russians do not trust Chinese goods and prefer to buy Western despite their much higher prices," he said.


Another problem is that both sides are short of foreign exchange, forcing them to try to find goods to exchange.


One Chinese ex-trader said he lost 200,000 yuan after his Russian partner did not pay money owed to him.


"The Russian banking system is very primitive so all the business had to be done in cash," he said. "For the last shipment, my partner asked me to deliver the goods first and receive pay later. He never paid."


The trader has been forced to drive a taxi to raise money to pay off debts.


The Chinese official said business developed too quickly after the collapse of the Soviet Union and the necessary regulations and customs inspection procedures were not in place to cope with the rush of business.


Chinese figures show Sino-Russian trade in 1993 was worth $7.68 billion, almost double the $3.9 billion of 1991. The fall in trade this year is a disappointment to national leaders, eager to narrow the gap between the booming south and coastal cities and the poorer north and west, which border the former Soviet Union.