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Russia-China economic relations should reduce dependence from foreign climate - Russian ambassador

May 27, 2013, 12:51 UTC+3

In the previous year the trade has got closely to 90 billion dollars

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BEIJING, May 27 (Itar-Tass) - Russian-Chinese trade and economic relations reached “a quite high level,” Russian Ambassador in China Andrei Denisov said in an exclusive interview with Itar-Tass on Monday.

In the previous year the trade has got closely to 90 billion dollars. In 2005 the bilateral trade reached 29 billion dollars. The ambassador stated that the bilateral trade tripled for a relatively brief period of time.

“The factors of world economic situation also affect our trade. In the first quarter we have reported some decline in the trade, approximately four percent down to the first quarter of 2012. This is the direct influence of the world business climate,” he noted.

Meanwhile, the last April results show a better tendency, the Russian diplomat went on to say. “This is slight fluctuations, meanwhile, they reflect the general situation in the trade and point to the need for a qualitative renovation of the structure of our economic cooperation. The dependence from the foreign business climate should be reduced, particularly thanks to a broader investment partnership,” he remarked.

“We are interested in a radical growth of investments from China. They are still minor in general, and, according to the estimates of our specialists, they make about 4-5 billion dollars, without taking into account the credits on oil deals, which are calculated separately. With due account of Russian general economic potential this is a drop in the sea. On the other hand, Russia accounts for 0.8% of all foreign investments in China, which is one of active investors on the world market, that is also little,” Andrei Denisov noted.

“Our Chinese partners declare invariably that they are ready to invest in Russia, but the path from a declaration to concrete projects turns out to be quite long and not always smooth,” the diplomat went on to say. “The problem, to my mind, is in an unfavourable investment climate in Russia and unfavourable economic factors. As Chinese businesspeople expect from Russia investments in a broader trade and transport infrastructure in order to increase the exports of their goods on the Russian market and their production in Russia with further sale.”

“The Chinese business is interested in the exports. The Chinese economic model works this way and it should be taken into account,” the ambassador said.

He noted that Chinese partners are interested to invest in the raw material projects, particularly in the Russian border regions, in order to provide conveniences to settle the transport problems.

“Meanwhile, we show interest to attract investments in the highly technological industries of our economy. It is common knowledge that Russia puts forward courageous plans of innovative development. We are creating special economic zones, technoparks. We would be interested to attract Chinese investments in these spheres,” the diplomat remarked. “Now the situation in investment cooperation is changing for the better. The insistency of Chinese partners and major activities of our economic structures lead to the growth in the number of concrete projects. In the previous year the Chinese government approved about 15 large-scale investment projects of Chinese companies in Russia. This is absolutely not the guarantee that all these projects will be fulfilled, but, however, this is the creation of necessary regulating conditions to launch these projects,” Andrei Denisov stated.

He noted several achievements in this sphere, including the project for the production of glass for the cars in Russia, several projects for the production of equipment for coalmining and oil-producing industry, the cutting and reprocessing of timber and the production of agrarian cultures.

The Primorsky Territory has set up an industrial park, where production capacities to make footwear, assemble cars and reprocess timber are planned to create, Denisov pointed out. Quite recently Russian and Chinese companies began to work out the development of a polymetallic ore deposit in East Siberia, the creation of a joint venture for the production of raw rubber in Krasnoyarsk and then the same production in Shanghai on the Russian technology.

“Much depends in this issue from the condition of a legal basis, consequently, from the efforts of the governmental agencies of the two countries. In 2006 we signed an intergovernmental agreement for the promotion of mutual protection of investments. This is a certain cornerstone for the creation of the legal basis in investment cooperation. After this in 2009 the plan of Russian-Chinese investment cooperation was signed, as well as the program of cooperation between the regions of Russia’s Far East and East Siberia with north-eastern China linked with the plan,” Andrei Denisov stated. Meanwhile, he acknowledged, “There are some problems in this issue, this program is being implemented not so smoothly, as we would like it to be done.” “However, both sides understand the need for the promotion of the program and some efforts are being taken in this issue,” the diplomat added.

“I would like to note with satisfaction that the geographical boundaries of investment cooperation are beyond the Far East and Siberia. The other day a representative delegation from the Volga Federal District headed by Russian presidential representative in the Volga Federal District Mikhail Babich visited China. The delegation included an impressive group of governors and regional chief executives. The whole scope of projects in Bashkortostan, the Nizhny Novgorod Region, Udmurtia and other Russian regions were scheduled,” the diplomat noted. He pledged that, for its part, the Russian Embassy gives an all-round support to the promotion of these projects.

“We have formed and put into operation the Russian-Chinese investment fund. The specific capital makes 3-4 billion dollars, 70% of assets will be allocated for the funding of the projects in Russia, 30% - for the funding of the projects in China not related with Russian business. The pilot project is already launched in the forestry industry,” he indicated.

“As for competition with Japanese companies, I do not see a concrete matter for talks in this issue. The potential of Russia as an investment partner is so big and realized insufficiently that it is premature to say about any concerns over competition,” Andrei Denisov said in conclusion.

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