02 September 2015

    Russian President Vladimir Putin will visit China on President Xi Jinping’s invitation to participate in the celebrations dedicated to the 70th anniversary of the Chinese people’s victory in the War of Resistance against Japanese Aggression and the end of World War II.

    In anticipation of the upcoming trip, he spoke in an interview with TASS news and Xinhua about trade and economic relations between the two countries, similar goals in development, and topical international and regional problems.

    – This year is the 70th anniversary of victory in the global war against Nazism. Chinese President Xi Jinping’s father and your father participated in this struggle. Your recollections of the war have both a family and national character. Xi Jinping visited Moscow in May to participate in the celebrations to mark the 70th anniversary of victory in the Great Patriotic War. On September 3rd you are visiting Beijing to participate in a big parade in honor of Victory Day in the War of Resistance against Japanese Aggression. Why do you think the victory and honoring these historical events are significant to the modern world? What is the role of the Chinese People’s War of Resistance against Japanese Aggression in the victory in the global war against Nazism?

    – The anniversary of the victory is highly significant to Russia and China. The Soviet Union achieved victory at the cost of heavy sacrifice. The Chinese people suffered large losses. We will never forget the heroism, fortitude, and spiritual strength of the victors’ generation. We will forever honor the fallen and regard the veterans with reverence.
    Our countries were allies in the struggle against Nazism and Japanese Militarism, and bore the brunt of the aggressors. They not only survived in this terrible fight but won, liberated the enslaved peoples, and brought a peaceful life to the planet.

    The mutual support of the Soviet and Chinese people at this hard time and common historic past are a solid basis for modern relations between Russia and China. Unfortunately, there are nowadays some attempts both in Europe and Asia to misrepresent the events of World War II, to give the facts a twist, especially regarding the pre- and postwar periods. Several countries’ steps toward rehabilitation and glorification of the criminals and their accomplices were an outrageous attempt to trample on the Nuremberg and Tokyo tribunals’ decisions. This is nothing more than an insult to the memory of those fallen in the war. And the aim of these historic speculations is absolutely clear – to use them in precarious geopolitical games, to embroil nations and peoples. Russia and China share similar views on the causes, history, and the outcome of World War II. The memory of this war and the lessons we learned are sacred for our peoples. This tragic past appeals to our common responsibility for the global destiny, to the realization of the dramatic consequences to which the destructive ideology of your own exclusiveness and permissiveness can lead. These are the ideas to which Nazism and Militarism were adherents. We are obliged to prevent their revival and dissemination.

    Therefore, it is essential for our states to be united in the desire to continue defending the historical truth, the common victory. Our joint celebration of the 70th anniversary of victory in World War II demonstrates that commitment.

    – Nowadays the global situation is full of dramatic events and changes, and some tendencies are quite scary. What is your image of Moscow-Beijing relations in the global situation of today? Can Russia and China facilitate the construction of a new order, and, if they can, what do you think its principles should be like?

    – The world situation, unfortunately, is getting less and less predictable. The objective process of formation of a new polycentric world order model is accompanied by a growth of instability both on a regional and global level. And the main reason for this tough, complicated situation is a lack of compromise in decision making. Inter-civilizational and inter-religious conflicts cannot be reconciled. The global economy has not entered a phase of sustainable development. The stubborn attempts by some states to retain their world dominance by all means are among the recurrent problems. Declaring democracy, rule of law and human rights within their countries, they ignore them on the international arena – in fact, they reject the State Equality Principle enshrined in the UN Charter.

    – Under these difficult conditions the Russian-Chinese interaction is of particular importance for the preservation and strengthening of security, international and regional stability, and the search for effective responses to global challenges.

    Russian-Chinese relations today, perhaps, have reached their peak and continue growing. Russia and China relations are based on sincere feelings of friendship and our peoples’ affection, deep mutual respect and trust, key interests in consideration of each other, and the interest in our countries’ prosperity. V. Putin.

    That is the way we cooperate in the UN, G20, as well as in BRIC and SCO, the summits of which successfully took place in Ufa in July. Russia-China cooperation played an important role in such thorny questions as the chemical weapons removal from Syria and the reaching of an agreement on the Iran Nuclear Program. Russia and China are the first to promote the construction of the architecture and indivisible security principles and cooperation in the Asia Pacific region principles, to strengthen the confidence in outer space activities and to ensure international information security. Russia-China partnership expansion complies with the strategic goals of our countries. These are the considerations we were led by while adopting the Joint Statement on the EEU and “Economic belt of the Silk road” pairing in May of this year. We are talking about the beginning of the long-term development priorities coordination process in order to give a powerful impetus to economic activity throughout the vast Eurasian space.

    – Trade and economic relations between Russia and China are enjoying growth; however, the anti-Russian sanctions of the West still have a negative impact on bilateral commerce. Is it possible for the countries in the current environment to achieve the targeted doubling of turnover? Which ways are more promising?

    – China is our key partner in the economy. We have made significant progress in all areas of economic and industrial cooperation in recent years. I cannot agree with the fact that the illegitimate restrictions introduced in some Western countries against Russia have a negative impact on Russian-Chinese economic cooperation. On the contrary, it stimulates our domestic business to develop sustainable business links with China.

    All Western sanctions against Russia

    Since 2010 China has held a firm position as Russia’s main trading partner. By the end of 2014, despite the adverse trends in the global economy, the turnover decline which constituted 88.4  billion US dollars was not prevented. Power engineering is still a leading sector. Our countries are consistently moving towards the establishment of a Power Engineering Alliance, which I believe will play a prominent role in international economic relations.

    By 2014 a real breakthrough has been achieved in the gas sector. During my visit to China in May of the previous year a contract for the annual supply to China of 38 billion cubic meters of Russian natural gas was signed. It will be transported via the “Eastern” route over 30 years. For the project launch the construction of the “Power of Siberia” gas pipeline has already been started. For the “Western” route prior arrangements were recorded in May of this year. The export volumes will constitute 30 billion cubic meters per year. The implementation of these large-scale projects is a priority for the near future.

    There is tangible progress in other segments of our power engineering cooperation. An oil pipeline from Russia to China has been constructed and is operating, an agreement for oil supplies increase has been signed, and a joint venture for exploration and production of oil in our country has been established. Chinese companies have joined the Russian Arctic and the Sakhalin shelf gas projects. There are good prospects for joint development of coal deposits in the Far East regions.

    Cooperation in the nuclear sphere is in the process of intense development. The first and second power units of Tianwan NPP built by Rosatom demonstrate the best efficiency and safety rates among all the nuclear power plants in China. At this moment the third and fourth power units of the station, the commissioning of which is planned for 2018, are being constructed with our assistance. In short, the potential of Russian-Chinese power engineering cooperation is very high.

    I consider high-speed rail to be one of the most promising areas. The parameters for co-financing of the Moscow-Kazan high-speed highway, in the construction of which we plan to invest more than 1 trillion rubles jointly with our Chinese partners have been agreed upon. The new main line is expected to be in operation by 2020 and be a model project for Russia-China cooperation in the sphere of transport and infrastructure.

    The aerospace industry is of vital importance for the both countries’ cooperation. The construction of a wide-body aircraft and heavy-lift helicopter, as well as implementation a number of other programs is planned. New impetus for closer cooperation in the scientific-technical and production field was provided by China’s participation as a partner country in the “Innoprom–2015”, international industrial exhibition in Yekaterinburg.

    Both Moscow and Beijing are ready to ramp up financial partnership, including payments in national currencies. Inter-regional links and cross-border cooperation are planned for expansion to increase there the practical benefits and improve cross-border transport infrastructure.

    Trade and economic relations of Russia and China. Dossier

    – Russia has recently taken a number of measures aimed at accelerated development of the regions in the Far East, including establishment of the Free Port in Vladivostok. You also particularly welcomed the participation of Chinese enterprises in the development of the Russian Far East in July in Ufa. What, in your opinion, are the opportunities for Chinese-Russian cooperation? How is Russia planning to attract Chinese investors?

    – Indeed, the development of Siberia and the Far East is our national priority for the entire twenty-first century. To solve this large-scale problem we have already made a number of significant steps. Currently a program for the Far East and the Baikal region’s economic and social development which includes dozens of major investment projects is being actively implemented. Among them is the “Power of Siberia” pipeline construction, the Vostochny Space Centre launch, the planned projects for gas processing and gas chemistry by Gazprom and SIBUR, the Baikal-Amur mainline and Trans-Siberian Railways modernization and expansion, and the “Zvezda” shipbuilding complex.

    Of course Russia is interested in attracting foreign, including Chinese, investors to the implementation of these projects. Owing to the Federal Law “On the Advanced Development Territories in the Russian Federation,” a new tool has been created both for the Far East region, where the first nine such territories have already been formed, and for our country in general. The Advanced Development Territories along with the Special Economic Zones should promote changes in the Far East economy: they are expected to become kinds of clusters, attracting and retaining investments and technology. A preferential regime for investment and business operation regardless of the country of capital origin is being created in these territories due to great tax incentives and simplification of the business environment.

    Their residents, in particular, will receive the following benefits: no profit, property or land taxes within the first five years, no import and export customs duty, subsidies on loans, rent concessions, reduced regime of state and municipal taxes. Within 10 years from the date of obtaining ADT resident status, reduced insurance rates will be applied – 7.6 % instead of 30 %. The VAT on imports for recycling will also be withdrawn.

    However, there are some more incentives. Domestic and foreign companies will be provided with a tax holiday for mining taxes: a reduction factor (from 0 % to 0.8 %) for the period of 10 years. Administrative barriers will be minimized. And the most important thing is that the state assumes the obligation to create the necessary infrastructure. The Russian Government expects total investment in the first three advanced development territories to exceed 50 billion rubles. For their development significant funds are also allocated from the Russian budget – about 7.5 billion rubles.

    Changes of the same significance will affect investors in the south of Primorsky Krai, where a Free Port Regime, covering all the key ports of the region from Nakhodka to Zarubino, including Vladivostok, is in process. The Free Port law will come into force in October 2015. Significant tax benefits are planned to be introduced here – up to a zero-percent rate on a number of taxes. There is a maximally conducive business environment, including for capital construction spheres, and a visa-free regime for foreign citizens. In addition, on the Free Port territory the procedure for a free customs zone will be activated, which means, in fact, duty-free imports of foreign goods.

    I am convinced that these new opportunities will attract investors from China and other Asian countries, considering that a number of large companies have already proposed specific investment projects. For example, Chinese partners are ready to invest over a hundred billion rubles in the construction of refineries and clinker plants in the Amur region, bridge crossings in Nizhneleninskoye–Tongjiang and Blagoveshchensk–Heihe, and metallurgical and brick works in Yakutia.

    – You signed a Decree on holding an annual Eastern Economic Forum in Vladivostok. What are your expectations and predictions? How did the regional partners react?

    – The St. Petersburg International Economic Forum held in June demonstrated that despite the sanctions imposed against Russia, hindering the development of full economic cooperation, the interest of foreign businesses in our country has increased.

    The forum was attended by over 10 thousand representatives from 120 countries. Therefore, there is no doubt that the first Eastern Economic East Forum which will take place in Vladivostok September 3–5 will also be attractive to our foreign partners primarily from the Asia-Pacific region.

    The main objectives of this forum are the positioning of Russia as an active participant in economic and integration processes in the Asia-Pacific region, proposing investors specific projects for collaboration. The business circles of India, Vietnam, Korea, Japan, Singapore, and other countries, including those which geographically do not belong to this region, have already taken an interest in it.

    We highly appreciate the Chinese partners’ intention to send a representative delegation, which will include businessmen from more than a hundred leading power engineering, mining, transportation, agriculture, engineering and other companies, major financial organizations, representatives of the central authorities and governors. We look forward to their active participation in the forum.

    – You previously said that you have special feelings for China. Since the first election of your first presidential term in 2000, you have visited China 13 times as the leader of Russia. Which changes that you have observed have made on you the deepest impression? What feelings does the development of China produce in you?

    – You have rightly pointed out that I have been lucky enough to watch the dynamic development of China for a number of years. Every time I came, I noticed the strengthening economic power of your country, new objectives reached in the process of modern infrastructure construction and in social development.

    Through all of this, cultural and historical traditions are respected. And everyone who visits your country feels it. The objects of cultural heritage that reflect the completeness of the ancient Chinese civilization are of particular importance. The trip to the Shaolin Temple during my visit in 2006 made an unforgettable impression on me.

    The path which China has traversed over the years is the path of successful economic reforms and wise social policy. It is a very valuable experience for us. For all the differences between our countries, Russia and China have similar development objectives. Vladimir Putin.

    In particular, this concerns the change in the economic structure of high-tech sectors. The sectoral priorities of Russia and China also coincide: that is nuclear energy, space exploration, new information technologies, saving energy, environmental protection, production of highly effective drugs and medical equipment, and a number of other areas.

    Our countries have enormous potential for closer cooperation between the business communities, for active humanitarian cooperation. And what is more, we are ready to implement all these tasks, as there is a growing interest and trust in each other, a strengthening friendship. On this basis a lot can be done and achieved. I believe in it.