On June 7, a Russia-China session was held within the framework of the St. Petersburg International Economic Forum. Cooperation between the two countries is in the spotlight: it was not by chance that Chinese President Xi Jinping visited the forum. The session dealt with issues pertaining to the bilateral partnership between Russia and China, as well as possible ways of further developing relations. The speakers focused on transport, logistics and investment.
Renova Group President Viktor Vekselberg, chairman of the board of directors at the Skolkovo Foundation, moderated the discussion. He said that international partnerships are important today and will continue to be vital in the future. “Today the world is in a very complex turbulent state. We are witnessing trade wars, instability, and it is very important that Russo-Chinese relations should be constructive,” he said.
Russian Railways head Oleg Belozerov noted that already this year, the volume of cargo traffic between Russia and China is slated to increase 20%, and the trade turnover between the countries in the near future should increase to $200 billion. Rail transport is a gauge of the intensity of trade relations between countries. “It’s not just that everything is working out well with our Chinese colleagues: the volume of traffic grows by tens of percent every year,” Belozerov said. “Last year, the gross volume of goods transported between the two countries amounted to 1.3 billion tonnes. The most impressive achievement is container transit. Last year, 351 thousand conditional containers were sent towards Europe from China. The volume of traffic last year increased by one third, and this year we are moving at the same pace. Currently, cooperation in the field of transportation has been established with 34 cities of China, in the near future this figure will be increased to 50.”
The head of Russian Railways also added that in order to increase the efficiency of cargo transportation, Russian Railways had reduced prices and increased the speed of delivery. From a number of Chinese provinces, cargo can be delivered to Europe today in just 6 days, while by sea the delivery time is 2 months. Countries are debugging the regulatory framework in the field of transportation. There are already several achievements: last year, the two countries managed to create a single electronic invoice system, improving the flow of documents.
Speakers drew attention to the fact that Russia is an important strategic ally for Chinese business. In particular, Paul Chan, Financial Secretary of the Hong Kong Special Administrative Region of the People’s Republic of China declared his readiness to provide comprehensive, including legal, support to Russo-Chinese companies in accordance with international rules. “Today, various corporations are free to register on our stock exchange, and here joint Russian-Chinese companies can be considered as priority participants. They can be granted preferential terms for bank interest and taxation,” he said.
Zhou Xiaochuan, Vice Chairman of the Board of Directors at the Boao Forum for Asia, pointed to the readiness to cooperate in the investment field. According to him, now more than 100 Russian-Chinese projects are under construction, and 32 have already been successfully implemented. Investment companies in China are ready to cooperate with all major cities; they are counting on large investments, primarily on infrastructure projects. It is necessary to work out and create a favourable ecosystem, legal guarantees, and loans from banks.
He also added that the largest backbone banks in China have opened representative offices in Russia, and a priority has been placed on bilateral transactions in national currencies and the possibility of establishing an adequate rate for each of the currencies. The People’s Bank of China and the Central Bank of Russia have already signed an agreement on mutual settlements in national currencies.
Summing up, the session participants agreed that the Russian-Chinese strategic partnership is developing steadily and progressively. Bilateral trade relations are dynamic and have posted impressive growth; there are many joint projects in the transport and investment sectors, and big plans for the future.
Grigory Berezkin, Chairman of the Board of Directors at ESN Group, added that the situation with sanctions, which have affected Russia for a long time, may be expanded to China, but “the crisis of globalisation is a resource for developing relations between countries when it is worth going to even deeper-integrated relationships.”
