Economic Cooperation as Essential Constituent of Comprehensive Sino-Russian Partnership

05.04.2017

The final session of the conference, titled “China and Russia: Facing Challenges of Global Shifts,” held on April 4-5 by the Valdai Discussion Club in cooperation with the Center for Russian Studies at the East China Normal University, was dedicated to economic cooperation as essential constituent of comprehensive Sino-Russian partnership.

In her opening remarks, Marina Larionova, Head of the Center for International Institutions Research, Russian Presidential Academy of National Economy and Public Administration, said that the growth rate of Chinese economy has slowed down in the recent years, while the Russian economy is only recovering from recession. Therefore, the two countries need to seek new approaches to partnership to achieve sustainable and environment-friendly growth.

Igor Makarov, Research Fellow at the National Research University–Higher School of Economics, dedicated his address to agricultural cooperation, which is a new aspect in Russian-Chinese bilateral relations. According to him, Russia’s principal competitive advantage, including in trade with China, is its natural resources, which, apart from energy, include land, fresh water, forests and fish. Therefore, the use of this advantage means not only exporting raw materials, but also trade in goods whose production requires their use. For a number of reasons, including the shortage of arable land in some of China’s regions and soil erosion, agriculture is one of priorities of cooperation.

This cooperation is now being actively pursued, Makarov said, but the growth of trade turnover in agricultural goods should not be overestimated, as it is related to low base effect. In addition, growth is being hampered by administrative barriers on both sides. In China’s case, these are problems of access to domestic market: up to 2015 there was a direct ban on imports of Russian grain, which has been only partially removed. Meanwhile, in Russia, Chinese farmers often face problems when it comes to renting land, something local authorities are reluctant about. According to Makarov, there has been some progress on this recently, because regulatory issues of renting land are now tackled by the Russian-Chinese Fund for Agro-Industrial Development.

Alexey Bezborodov, Director General of the Infranews agency, discussed various aspects of cross-border trade and logistics. According to him, besides administrative barriers, producers of China-bound Russian foodstuffs also face issues with understanding the specifics of the Chinese market. For example, Russian producers put a lot of hope into such products as ice cream and honey, but do not consider the taste preferences of the Chinese, hoping to sell products that are analogous to the ones they sell in Russia.

Bezborodov noted that the volume of trade between Russia and China is rapidly growing, and discussed some peculiarities of Russian-Chinese foodstuffs trade. For example, Russia is a leading exporter of fish to China, but much of the fish is cheap and meant for further processing and sale of prepared fish, including back to Russia.

Li Xin, Director of the Center for Russia and Central Asia Studies at the Shanghai Institute of International Studies noted that the growth in trade volume between Russia and China remains modest, which is linked to macroeconomic dynamics following the global crisis. According to Li, an “alignment” of Russia and China’s hard and soft infrastructure could help activate economic ties. He added that he defines soft infrastructure as standards, technologies and legislation, while hard infrastructure is transportation corridors, along which the belt of economic development is supposed to form.

Zhang Jianping, Director of the Center for Regional Economic Cooperation at the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce of the People’s Republic of China likewise noted the inadequate rate of the development of economic ties. According to Zhang, important political agreements between the two countries have been made, but it is necessary to develop communication and dialogue to push the development of relations into the business dimension. He noted that it is most important to work on removing barriers, especially in customs. He also noted that it is necessary to expand the variety of trade and to develop cooperation between scientific research centers, as well as in the tourism and services sectors.

Read summaries of all sessions of the Russian-Chinese conference

Session 1. Transformation of the Political and Economic World Around Us: Opportunities and Threats for China and Russia

Session 2. Potential for Relations in the China-Russia-US Triangle

Session 3. Cybersecurity and the Cybersphere

Session 4. Situational Dynamics in the “Shared Neighborhood” Countries around Russia and China

Session 5. Energy Market Dynamics: Conclusions for Russia and China

Session 6. Economic Cooperation as Essential Constituent of Comprehensive Sino-Russian Partnership

 

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