New Platforms for Cooperation between China and Russia: Prospects for Development
KEY CONCLUSIONS
Cooperation between Russia and China in the Far East has a long way to go
“Russia and China stand the best chance to develop cooperation in the Far East. <…> China is an enormous market, while Russian Far East is a gigantic treasury of natural resources with comfortable cities by the border,” Alexey Chekunkov, Chief Executive Officer, Far East and Baikal Region Development.
“The numbers show that we have some results, and one can tell by looking at the transport. The volume of container traffic between our countries was up by 55% last year, and by another 35% this year. We have achieved even better results with the Silk Road project. Last year, the transit cargo flow from China through Russia was up by 80%, and by 32% this year, and we expect it to grow even faster,” Aleksandr Misharin, the First Deputy Chief Executive Officer, Russian Railways.
Potential of Russian-Chinese cooperation is underused
“Regions, business alliances and legal entities are not always able to maintain a high level of political communication. The potential of interregional communication is one of the most promising. 51 regions of Russia are twinned with Provinces of China. This is an enormous potential for partnerships,” Dmitry Mezentsev, Chairman of the Federation Council Committee on Economic Policy.
“So far, our countries have underused the potential for cooperation in agriculture. China is inclined to increase food import and is planning an Import and Export Fair in December. But we are significantly constraineded by the trade wars,” He Zhenwei, Secretary-General of the China Overseas Development.
PROBLEMS
Difficult negotiations on joint projects
“The Crimean Bridge was recently opened, but there is not a single bridge at our border! The construction of the bridge in Blagoveshchensk is reaching its final stage, but it took 20 years! Do we have technology issues? No, it just took us 20 years to negotiate,” He Zhenwei.
Plans to increase trade between two countries not implemented
“We have an agreement to increase our mutual trade turnover up to $100 billion by 2015, and 200 billion — by 2020. This, however, never happened. The current volume of trade is $80 billion, while it reached $500 billion with the USA. We hope that we will be able to reach $100 billion this year. We are highly complementary,” Zhou Liqun, General Manager, China Chengtong International Investment Ltd.
SOLUTIONS
Lifting trade barrier
“We would like to have sources of import other than the US. We import over 95 million tonnes of soybeans, a third of which is American. Only 500 thousand tonnes of soy come from Russia. We must use China’s plan for import expansion to increase cooperation in agriculture,” He Zhenwei.
“Our two priorities are agriculture and tourism. Logistics and transportation issues should be addressed. They include transport corridors, customs regulations, etc.” Maksim Surnin, Chairman of the Supervisory Board, Baikalsea Company.
Increasing investments in joint projects
“We have established a Russian-Chinese investment fund. We have invested in more than 20 projects and exceeded the initial capital of $1.1 billion. The investments will help us boost trade. We need more transparency in investment. We expect Russian investors to increase transparency, too. If we enhance investments, we can enhance trade,” Tu Guangshao, Vice Chairman, China Investment Corporation.
“We need robust financial tools that will help us overcome the effects of the crises. We consider this to be the most important thing,” Xiaolin Li, Executive Vice President of the Board of Directors, Silk Road Planning Research Centre.
Supporting tourism
“We sent over 1.5 million Chinese tourists to Russia last year, and about 10 million — to Thailand. The growth potential is huge!” Wan Ping, Chairman of China Chamber of Tourism.
“Last year, we started direct flights from different cities of China to Russia. By the end of the year, there will be 20 such flights to carry 300 thousand passengers, which means that air traffic between our countries will grow by a quarter,” Wan Ping.
Expansion of cooperation in media content
“We have signed agreements with the largest online cinemas and we are working on introducing media content from China to Russia. This is mutual recognition, regular use of the same platforms and goods. China accounts for production of 50% of animated games, which is over a billion dollars. This will be one of the key platforms for developing our relations,” Dmitry Mednikov, Deputy Director General, All-Russia State Television and Radio Broadcasting Company (VGTRK)
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