02 September 2016

    A Eurasian partnership offers Russia and China opportunities to develop the markets of third nations, First Deputy Prime Minister of the Russian Federation Igor Shuvalov said at the EEF strategic session.

    The Russia-China business dialogue was held as part of the EEF business programme and included a discussion of prospects for expanding Russian-Chinese cooperation in different business spheres involving Shuvalov, Skolkovo Foundation President Viktor Vekselberg, Minister for the Development of the Russian Far East Alexander Galushka and representatives of major Chinese companies.

    Haitao Li, Deputy Chairman of People’s Government of Heilongjiang Province (which borders Russia) of the People’s Republic of China, announced that China is currently taking measures to support the New Silk Road and has identified three potential aspects for the further development of Russian-Chinese cooperation: the joint construction of cross-border infrastructure in order to expand places where trade bottlenecks form; cross-border production taking into account the features of Russia’s Far Eastern regions; and the establishment of a common platform. Haitao Li also expressed interest in connecting Chinese and Russian railways for commercial train traffic in order to improve the situation in trade and economic cooperation.

    “A very important result of this year is the work we have carried out in the Far East with our Chinese partners. At the previous forum, we signed a memorandum on mutual understanding concerning the establishment of the Russian-Chinese Agribusiness Fund. At this forum, the first two transactions will be financed by the fund, which is allocating funding for the first two agricultural projects in the Far East. As we agreed with our Chinese partners, this is a measure of mutually beneficial cooperation”, Galushka said. The agribusiness fund has starting capital of RUB 13 billion with the ability to grow to USD 10 billion.

    While during the first half of the session, emphasis was placed on traditional forms of cooperation – the development of trade, the raw commodities sector and agribusiness, later the Chinese businessmen expressed interest in the ability to build transit corridors between China and the Pacific Ocean via Russia, and also proposed intensifying cross-border cooperation with China in priority development areas.

    Skolkovo Foundation President Viktor Vekselberg noted the vast potential of Russian-Chinese cooperation in high-tech areas since Russia is characterised by a high level of education, science and scientific knowhow, while China has become a global leader in high-tech production. He also reported that, according to a survey, only 8% of Russian companies have plans to enter the Chinese market, which does not at all correspond to the vast potential for cooperation. Russian developments are already making their way to the Chinese market: Chinese companies are using oil and gas software and special coatings to increase the service life of various materials, including in the pipe industry. “Our economic cooperation is clearly lagging behind the political decisions that have been adopted”, Vekselberg noted.

    Big business is most likely the reason for this. “Everyone knows that the leaders of the Russian Federation and the People’s Republic of China have excellent relations. This concerns the work of our leaders and also their personal relations. At meetings our leaders even display friendly feelings and sympathy to one another, and of course this helps the dialogue. In terms of business ties, of course, it’s what it was: the leaders of the two countries are sympathetic in their personal relations, which helps the business dialogue. Breakthrough agreements. But there wasn’t even much interest in trust at the level of private companies both from Russian business and Chinese business in principle, and this interest started to develop from the moment sanctions were imposed in 2014”, Shuvalov said.

    China’s interest in cooperation is reinforced by major investment projects, and Chinese businessmen have begun contacting the Russian government with questions about new opportunities, Shuvalov said. “We are discovering extraordinary prospects. If we launch the platform that we are currently working on – the Eurasian partnership a part of which includes a free trade area – Russia and China will have opportunities to develop the markets of third nations in addition to trading with each other. We will have vast opportunities for joint efforts on third markets. The Chinese leadership has taken note of this, and we know this in the Chinese government. So we are looking at all of this with optimism and understand that we have room for growth”, Shuvalov noted.