ST.PETERSBURG, November 7. /TASS/. Prime Minister Dmitry Medvedev said he is happy with the level of Russia's economic cooperation with China. According to him, the trade turnover in 2016 has exceeded $40 bln.

"If we talk about the trade balance, the current situation looks relatively fine, despite the fact that last year saw some decline, this year the trade turnover has already exceeded $40 bln," Prime Minister Dmitry Medvedev told reporters after a meeting with Chinese Premier Li Keqiang.

"In any case, the situation is improving, we have agreed with the Prime Minister of the State Council that we will take further efforts to stabilize the economic and trade cooperation, to gradually reach the target figures that were set few years ago. This implies the trade turnover of $200 bln in next 3-5-7 years," Medvedev said.

He added that China remains Russia’s largest trading partner.

"We are confident that a lot depends on joint actions of the two governments, so we agreed on taking a number of concrete steps," the Russian Prime Minister said.

According to Medvedev, "today it is difficult to name a sector where Russia and China do not cooperate.".

Preferential trade regime

According to the official, Moscow might introduce a preferential trade regime with China, although it requires a lot of work.

"We agreed to take a number of specific steps, both in bilateral format and within the framework of our integration initiatives, bearing in mind the size of the Eurasian Economic Union and the Silk Road Economic Belt," Medvedev said.

According to him, "in the long term there are other areas of integration, including the possibility of preferential trade regime." "It requires agreements on a number of highly sensitive issues," Medvedev added.

"This is a complicated path, it is necessary to act carefully, especially when it comes to changing the tariff policy, range of tariffs in a number of cases," he said.

"Naturally, in preparation of such decisions all the sensitive issues must be taken into account, all the concerns that the countries have, the problems that could potentially arise," Medvedev added. He said that the Russian authorities will watch the situation develop. "Our countries are determined to move along this path, we have discussed this within the Eurasian Union," the Prime Minister said. "We believe that this idea has good prospects, we will work on it," he said.

Intergovernmental commission on cooperation

The head of Russia's government pointed out that the two countries would set up an intergovernmental commission on cooperation between Russia’s Far East and China’s North East.

"It was decided to set up the fifth intergovernmental commission, which will deal with the cooperation on the Far East of our country and in the north east of China, which shows the scope of interaction."

Russian premier said that the prime ministers of the two countries never missed any of regular meetings which are held annually alternately in Russia and China.

"This mechanism is to some extent unique, we don’t have such a mechanism with no other country, it performs an essential function - it fills our relations with certain content, offers an opportunity to discuss future projects as part of our comprehensive partnership and strategic cooperation," Medvedev said.

National currencies

Medvedev noted that Russia and China were going to increase the share of national currencies in settlements.

"We consider it very important and right for the mutual trade to increase the share of national currencies on settlements," Medvedev said.

According to him, "the situation has changed - the yuan has become a reserve currency, it was officially recognized by major global financial institutions, which provides additional opportunities."

Li Keqiang in his turn said that China would maintain the stability of the yuan exchange rate within a "reasonable range."

"The Chinese yuan is based on the economic power of China. In this sense, there is no ground for constant devaluation of the yuan. We will maintain stability of the renminbi within a reasonable range, which is very important for the development of cooperation between China and Russia," the Chinese official said.

Li Keqiang said that Russia and China plan to increase share of mutual payments in national currencies.

He also said that during the talks, Russia expressed readiness to create favorable conditions for the activities of Chinese companies in the Far East.

"The Russian side also expressed its willingness to create favorable conditions for Chinese companies in the Far East. We also oblige our companies to follow the rules that exist on the (Russian) market, to comply with national legislation in the country," the Chinese Premier said. According to him, China sees broad prospects for development of cooperation with Russia’s Far East.

China-SCO free trade zone 

Li Keqiang said the issue of creation of a free trade zone between China and the Shanghai Cooperation Organization (SCO) needs to be additionally looked into.

"China and Russia are important participants in the SCO. We are interested in advancing regional integration and liberalization of trade in that region," the Chinese premier said.

"Looking into the expedience of creating a zone of free trade takes time. But the rules have been established. First, we must jointly abide by the existing rules of the World Trade Organization," he added.

In discussing the free trade zone it is also necessary to take into consideration concerns of the parties, he said. China and Russia, "as major neighboring countries, should take into consideration each other’s concerns," Li Keqiang said.

Global economic problems

The two top officials have also discussed pressuring issues of the global economy.

Dmitry Medvedev said  he feared the collapse of the WTO, which would cause problems to the global economy. He recalled the difficulties with Russia's accession to the trade organization. "There were a lot of concerns, they kept us in the waiting room for a long time, neither Russia nor China were allowed to join (the WTO), there were fears that there would be some problems within the countries, in certain sectors," Medvedev said.

He also stated that Russia was trying to "bargain for more decent terms, as all modern states do."

However, he said, "if before there were concerns about the WTO impact on the state of affairs in our economy, now we have fears of another kind: that this very WTO may collapse causing problems to international trade relations," the Prime Minister said.

Russia-China Investment Fund

Russia-China Investment Fund (RCIF) and Chinese company Tus-Holdings agreed to establish a joint Russia-China Venture Fund (RCVF), according to RCIF press release published on Monday.

The agreement was signed on Monday during the session of the Russia-China Business Advisory Committee.

The Russia-China Venture Fund target size will total up to $100 mln and could be increased later. RCIF and Tus-Holdings will act as anchor investors, other Russian and Chinese institutional investors are likely to participate.

According to the statement, the fund will "focus on identifying attractive investment opportunities among high-tech companies and start-ups in Russia that have the potential for further development in the Chinese market." This will include information technology in the financial sector, big data, cloud technologies, biotechnology, etc.

"During our work with our Chinese partners, we have seen strong interest in Russian high-tech projects. We are pleased to announce the creation of a special fund, which will unlock the investment potential in this area. RCIF and Tus-Holdings have begun the process of establishing the Russia-China Venture Fund and have already received positive responses from a number of institutional investors from China," Co-CEO of the Russia-China Investment Fund (RCIF) Kirill Dmitriev said.

According to President the Tus-Holdings Yuan Wei, the company "has a strong team that works with Russia. I am convinced that their cooperation with Russian partners will lead to success."

The Russia-China Investment Fund was established by the Russian Direct Investment Fund and China Investment Corporation (CIC) for promoting bilateral trade, economic and investment cooperation between Russia and China.