China delegation looks to transform trade ties
Russian Prime Minister, Vladimir Putin, is starting a 2 day visit to China on Tuesday, with business leaders saying they need government help to boost exports from sectors other than energy.
Russian companies are looking to sign $5.5bln worth of deals during the visit. The 4th Russian-Chinese forum, coinciding with the trip, will attract Russian heavyweights like Victor Vekselberg, head of Renova, Oleg Deripaska of Basic Element, and Vladimir Evtushenkov of Systema, which is looking to sign deals with Bank of China, and telecom equipment maker, ZTE Corporation. Petr Mozias, professor at the Higher School of Economics, believes the visit offers the chance to transform Russia’s exports to China.
“It's a turning point in bilateral trade. Natural resources increasingly dominate Russia's exports. Machinery has fallen to just 1%. In order to change that we need government efforts to diversify our exports. It won't happen by itself.”
Gazprom will lead the business people on tour with the prime minister. The company is likely to secure financing for the Kovykta gas project and to build a pipeline from Russia to China. It will be the second large investment made by the Chinese after last year's $25 billion loan to Rosneft. Mikhail Titarenko, Director of the Institute of the Far East says Chinese investment in Russia is being transformed.
“After the governments agreed a long term strategic plan for our economies in September, this visit should see the practical implementation in many spheres. What's important is that Chinese fundamentally changed their investment policy towards Russia and that's an important factor indicating that Russia-Chinese relations are reaching a new level.”
Bilateral trade reached $56 billion in 2008 – but that's fallen by a quarter so far this year. Boosting trade with the world's fastest growing economy is an obvious way for Russia to recover from recession.