Prime Minister Putin's Chinese visit to boost business ties

Russia's Prime Minister Vladimir Putin (L) shakes hands with China's Premier Wen Jiabao during a signing ceremony between the two countries in Beijing on October 11, 2011 (AFP Photo / Pool / Jason Lee)
Russian Prime Minister Vladimir Putin is visiting China at the invitation of his Chinese colleague- Premier, Wen Jiabao, on October 11 and 12, taking part in the 16th regular meeting between the two governments.

­During the visit, leaders of both countries will exchange of views on bilateral relations and international and regional issues of mutual interest.
This year celebrates the 10 year anniversary of signing China-Russian Treaty on Good Neighborly Friendship and Cooperation, and the 15th anniversary of the establishment of partnership and strategic cooperation between China and Russia, which plays a significant role in further development of trade, economic and humanitarian cooperation, as well as partnership in the field of technological modernization, with an agreement regulating this field to be signed during the meeting.

The agreement on “Partnership for Modernization” between Russia and the EU will serve as an example for the Chinese-Russian version of agreement -“Cooperation on economic modernization”. 

Vitaly Melyantsev, Head of the Department of International Economic Relations at the Institute of Asian and African, said the ties between Russia and China offer scope for addressing major Russian socio-economic issues.

“Russia has a few technological drawbacks associated with the obsolescence of fixed capital. The outflow of qualified specialists to more developed countries in the current burst of the crisis in the U.S. and Europe is deteriorating the situation with the lack of human resources in the country. Chinese capital and technologies in energy and transport sphere should be supportive for development and improvement of the Russian economy”

Melyantsev said the first theoretical brick for modernizing all economic fields has been set but it lacks practical realization.

“A batch of innovative practical ideas a fostered in the Russian Technological Hub Skolkovo, however, the paucity of implementation technologies and productive techniques makes foreign partner technologies vital for further progress and implementation of modern developments”

Around 17 agreements have been prepared for the first day of Russia-China meeting, focusing on core bilateral issues, and giving priority to trade expansion, with 2010 bilateral trade turnover reaching $60 billion, a 5-fold increase since 2000. This year the data for 1H shows a 39.6% increase to $35.889 billion of trade turnover between Russia and China. Both sides unanimously agreed to support the bilateral trade expansion targeting $100 billion trade turnover in 2015 and $200 billion in 2020.

Russia has strong relations with China, although ties have stumbled in recent years over declining Chinese imports of Russian military hardware, and weak Russian exports of gas and oil to China. Yuri Ushakov, Deputy Head of the government, said that among the documents to be signed during the visit will be a memorandum of understanding between the Russian mining group En+ and the Chinese State Grid Corporation.  He added however that it was not planned to discuss gas supply, with a disagreement on pricing creating uncertainty about a 30-year contract for 30 billion cubic meters of gas per year between Gazprom and China's CNPC.

Sergey Pikin, Director of the Energy Development Fund, noted that China will nevertheless touch the energy pricing issues. 

“The export of all energy resources from Russia to China depends on pricing agreements. China will not afford overpaying, thus the success of energy projects including the construction of power stations in Eastern Siberia and Russian Far East will depend on Russian readiness to cover infrastructural costs”