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27 Oct, 2008 14:26

China and India to become Russia's strategic trade partners

Russian business is looking to new strategic trade partners. By 2020 China and India will become priority markets for Russia just as the European Union is now. The government has approved the change of direction in Russia’s approach to foreign trade.

Russia sees a new trading status for countries, from Kazakhstan and Uzbekhistan to China and India. In just over a decade, it wants these countries to be among its main markets.Last year Russia exported goods worth 580 billion dollars. But most of this consisted of energy sales.

This doesn’t satisfy Russia’s prime minister Vladimir Putin who urged the Government to boost exports of other Russian products.

“Russia is dependent on exports of hydrocarbons and other raw materials. Russian goods and services are poorly presented on such growing markets like Latin America and Asia.”

Experts like Evegeny Nadorshin, Chief Economist at Trust Bank say new markets are essential for Russia if it is to diversify away from reliance on energy exports – and thereby broaden the base of its economy.

“Russia can sell to EU only energy. EU won’t accept Russian machinery because its not up to European standards. We need to search for external consumers if we want to diversify the economy.”

But some doubt that China will eagerly snap up Russia’s hi-tech products as the country develops its own innovation sector. The main markets for such goods will be members of the Eurasian economic community like Uzbekhistan and Kazakhstan. Experts say China will be still interested in Russian weapons, space technology and energy supplies.