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14 Sep, 2008 00:41

Private and hi tech the key to expanding China business ties

A Siberian solar panel maker is leading a hi tech push by Russian companies to add more value to Chinese exports from Russia, with both the government and industry looking for the private sector to lead the way.

Nitol makes the ultra-pure silicon for solar panels, an industry growing as fast as producers can make them. It's a high-tech but lucrative business according to CEO Dmitry Kotenko.

“The Spot price is about $300-$350 per kilo, production costs are not more than $30-$35. That's why there's a huge margin.”

The world’s top solar panel maker, China’s Suntech, has signed a 7-year supply deal and bought around 20% in the Irkutsk firm.

With much of Siberia nearer Beijing than Moscow, bilateral trade's booming, but it's dominated by raw materials. Softwood exports have fallen to all major trading partners except China where they're soaring 50% a year.

On Tuesday a top state official proposed to build a Chinese extension to Russia’s new Siberia to Pacific E.S.P.O pipeline. But Zheng Silin, Vice Chairman, of the Congress Foreign Affairs committee says private firms need to be encouraged to get involved.

“We're very interested about this pipeline because the Chinese economy is developing very quickly. And private companies must conduct it, because China is a market economy so enterprise is very, very important.”

First Deputy Prime Minister Igor Shuvalov echoed those calls at Siberia's largest economic forum last week. The region must shift to export of clean manufactures, with incentives for private firms to invest there. Nitol took a step in that direction Tuesday. It founded a Solar Energy Association to promote solar power production and use in the region, which gets as much sunlight as Spain. Such panels already cost just $500.

This is everything the Russian govt would like its economy to be, high-profit innovations which harness the particularities of the Russian climate. Its Chinese and Russian producers say that's partly because the government stay out of their work.