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3 Oct, 2010 06:31

Russia keen to study secrets of Chinese economic modernization miracle

President Medvedev has visited three Chinese cities in three days – a cascade of lift-offs and touchdowns that allowed Russia and China to lift major projects off the ground and touch upon their strategic partnership.

Attention to detail has always been a Chinese virtue. They may have rolled out the red carpet for the Russians, but their meticulous bargaining proved just as tiring as climbing the Great Wall of China.

“These are serious, important talks, as there are a large amount of issues to discuss here,” said Russian Deputy Prime Minister Igor Sechin.

While both see natural partners in each other, for a long time Russia and China have been haggling over the price of Russian hydrocarbons. It took almost 15 years to build the first oil pipeline between the two neighbors due to money issues. Talks on the price of gas are still ongoing.

“China doesn’t want to overpay. It claims that it can offer a rapidly growing market in the future. Gazprom, in turn, is waiting for the price of natural gas and its share on the Chinese market to increase,” said Dmitry Aleksandrov, head of research at Univer Capital. “At the moment, gas accounts for just ten percent of the overall consumption of energy resources in China. It’s too little to be interesting to Gazprom.”

Tough bargaining is a useful skill in a Beijing neighborhood. Nick-named “Russiatown”, it attracts thousands of vendors on a hunt for knock-offs.

With its shamelessly low prices and high turnover, areas like that managed to transform themselves from shanty towns into glitzy shopping quarters. Russian-Chinese trade has undergone a similar makeover. In 2009, China surpassed Germany as Russia’s largest trading partner.

“We’ve overcome last year’s negative tendencies,” said Russian President Dmitry Medvedev. “The global financial crisis was the reason for the collapse, and our trade turnover volumes shrank. But this year we have managed to make up for it and will most likely get back to the pre-crisis level in trade and economic cooperation.”

A day earlier, while meeting Second World War veterans in Dalian, the Russian president was once again reminded of the two countries’ shared past.

“For us, you are a symbol of a country that gave us Marxism, Leninism and Communism,” a Chinese veteran said at the meeting with Medvedev.

Yet two days later in Shanghai, it became clear that it was now China’s turn to spread the word of wisdom. With its economy and infrastructure revamped in just three decades, China seemed like a perfect case study for the modernization-oriented Russian president.

“This exhibition is a unique chance to speed up the modernization of our economies and institutes,” Medvedev said. “Innovative development is certainly the choice of our country, we are following this path and will do everything for our economy to modernize, change and adapt to modern life.”

While a three-day visit may not be enough to learn the secrets of China’s economic miracle, the Russian delegation was still able to take home a few pearls of wisdom.

Over the course of this visit, Russian officials took a particular liking in citing Confucius – a Chinese scholar who, among other things, advised his followers against developing friendship with somebody who cannot teach you any good.

China is definitely not the case. The country has made such a dramatic leap forward that even its former Communist Big Brother Russia is more than willing to learn from it.