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Russia - Japan

September 07, 16:45 UTC+3
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Key conclusions

Russian-Japanese trade and economic ties on the rise

“Certainly, all the intensive discussions started because we eventually heard from the Japanese side that it is possible to develop ties without fixating on the high-profile political agenda, that is, to the peace treaty that regrettably is still missing between our nations,” said Igor Shuvalov, First Deputy Prime Minister of the Russian Federation.

“Our trade turnover surged by 15% over the first six months. The difference is great, compared to the figures for 2016. <…> Approximately 100 commercial and interdepartmental agreements were signed last year. About 40 more will be signed on this forum’s sidelines,” noted Maxim Oreshkin, Minister of Economic Development of the Russian Federation.

“Significant progress has been made to date under the cooperation plan. Ninety documents have been signed between Japanese and Russian companies up to now. <…> Interaction in the sphere of small and medium enterprises and boosting the industry’s efficiency is becoming more intense also,” said Hiroshige Seko, Minister for Economic Cooperation with Russia, Minister of Economy, Trade and Industry of Japan.

Russian, Japanese government and business reps are cultivating promising joint ventures

“Cooperation in the Far East is underway in the agricultural sector this year with construction of greenhouses as an example. A new stage of interaction is also in the field of medical industry and healthcare,” said Shigeru Murayama, President of the Japan Association for Trade with Russia and the NIS (ROTOBO); Chairman of the Board at Kawasaki Heavy Industries, Ltd.

“We are looking into opportunities for implementing projects in the field of electric power generation in the Far East, where our companies have a solid footing, especially in developing renewable energy sources. Keidanren, Japan’s federation of economic organizations, thinks highly of proactive measures by the Russian Government, such as the establishment of advanced special economic zones and the introduction of the free port in Vladivostok,” noted Teruo Asada, Chairman, Japan-Russia Business Cooperation Committee, Keidanren (Japan Business Federation); Chairman of the Board, Marubeni Corporation.

“We launched a test run of a route in August and September that makes it possible to send goods from Japan to Europe on a daily basis. The delivery time of Japanese goods to four European countries, Finland, Germany, Slovenia and Latvia, was recorded at 18 days. <…> The route’s capacity is 950,000 cubic meters per year. <…> Another example is cooperation with Toshiba,” said Nikolai Podguzov, General Director, Russian Post.

“We support the Government of Russia in setting its sights on improving the standard of living as the basis for the region’s development. For example, imports of corn for fodder from a Far Eastern port to Japan, which is the our company’s area of operations, has been growing steadily over the last three years,” said Masami Iijima, Representative Director, Chairman of the Board of Directors, Mitsui & Co., Ltd.

“Accomplishment is a joint investment facility with the Russian Direct Investment Fund, RDIF. <...> We are going to deliver $500 mln to RJIF – Russia – Japan Investment Fund. <…> JBIC will provide funding as a limited partner. <…> We are now shifting the focus from the debt side to the equity side. The equity side is risk-taking money. So we are going to provide equity investments through this mechanism,” said Tadashi Maeda, Chief Executive Officer, Executive Managing Director of the Japan Bank for International Cooperation (JBIC).

“New business opportunities are unveiled in the Far East by using an attractive base, infrastructure, advance development zones and the free port. <…> JGC is ready to take part in the energy projects, the cultivation of new businesses, and to make its contribution to the development of Russia’s Far East,” said Masayuki Sato, Chairman, Representative Director, JGC Corporation.

Challenges

Russian-Japanese economic cooperation still remains low

“Russia was ranked 13th among countries exporting products to Japan and 23rd among nations importing from Japan as of the end of last year. Meanwhile, Japan became Russia’s 7th largest foreign trade partner. <…> We cannot compare this current level of economic dialogue with the bilateral cooperation between Russia and China, for example,” said Alexey Repik, President, Delovaya Rossiya (Business Russia).

Sealed agreements often become just declaration of intent

“It‘s no secret that quite a lot of documents that we often sign in the presence of high-ranking officials of our government frequently take the form of memoranda and letters of intent. They do not turn into legally binding agreements in every instance,” Alexey Repik noted.

Solutions

Cultivating ties with the SMEs needed

“We opened the first foreign restaurant in Vladivostok this April. <…> We would also like to use Russian produce and not merely import raw materials from Japan,” said Toshiyuki Sasaki, Chief Operating Officer, Shinwa Holdings Co., Ltd.

Linking development institutions and establishing joint ventures

“We are going to sign the final document on establishment of a Russia-Japan fund together with JBIC. We believe this joint fund will be an important catalyst and a center of investment activity between Russia and Japan. <…> I am ready to announce our first deal today – these are investments into R-Pharm company of Mr. Repik,” said Kirill Dmitriev, Chief Executive Officer, JSC Managing Company Russian Direct Investment Fund (RDIF).

“Yesterday, we signed one more agreement to the tune of 9 mln euro on supplying a sorting and logistical center in Kazan,” Nikolai Podguzov noted.

“I am glad to say that Rosseti and Japan’s Chubu University signed a joint agreement within the framework of this EEF for implementing projects that use high-temperature superconductivity on DC lines,” said Evgeniy Olkhovich, Deputy General Director for Strategic Development, Rosseti.

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