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23 Jan, 2019 13:50

Western sanctions not key factor in why Russia looks East to Asia

Western sanctions not key factor in why Russia looks East to Asia

Experts weighed in on Russia's strategic and business opportunities at the World Economic Forum in Davos. The official residence, Russia House, welcomed more than 300 guests.

The panel dubbed “The Russia Economic Outlook” was hosted by Russia House, which is organized by the Roscongress Foundation. Daniel Yergin, Vice Chairman of global information provider IHS Markit, Vice Chairman of SUN Group Shiv Vikram Khemka, Chief Executive Officer of Russian chemical holding company PhosAgro Andrey Guryev and deputy editor of Chinese media company Caixin, Huang Shan, joined the discussion at the residence moderated by CNBC anchor Geof Cutmore.

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The analysts agreed that Russia’s economy is turning East because of the opportunities it sees in Asia. Sanctions and Western pressure are also playing their part, but are not key factors, according to results of the panel published on the Roscongress website.

“A lot of people describe bilateral relations between Russia and China [as an] opportunistic partnership or a marriage of convenience. If you really look down at bilateral competition of bilateral trade…you will see that actually trade has extended in areas like finance, IT, automotive, machinery,” Huang Shan told the participants of the meeting.

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China is one of Russia key trade partners. Trade turnover between the two countries set a new record in 2018, showing the growth of nearly 30 percent and reaching $107.06 billion.

“Sino-Russian relations have got a lot of fair winds,” noted Huang Shan.

He added that the ongoing trade war between Washington and Beijing and Western economic penalties against both Russia and China have given another boost to the bilateral cooperation. At the same time Russian businesses are not waiting for the sanctions to be eased, but adapt to the reality and manage to benefit from it, other members of the discussion stressed.

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Vice Chairman of SUN Group noted that Russia can benefit from its geographical position to further play a key part in terms of logistics, becoming a transport corridor between Asia and Europe among other opportunities.

The analysts also touched upon the problems of the Russian economy, including slow GDP and production growth, slowing domestic market as well as lack of diversification of the economy.

Hundreds of visitors came to Russia House on Tuesday, including the President of the Skolkovo Foundation Viktor Vekselberg, Chairman of the Skolkovo Foundation and FIDE President Arkady Dvorkovich, CEO and Co-Founder of Hyperloop Transportation Technologies Dirk Ahlborn, and the President of Orion Heritage David Yakobashvili.

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