Alexander Shokhin: "Russia-China relations are a rare example of stable and sustained cooperation in volatile and uncertain times"
28 July 2021 00:00:00

On 15 July 2021, the forum “Russia and China: Cooperation in a New Era" took place. The event was held online and was timed to coincide with the 20th anniversary of the signing of the "Treaty of Good-Neighbourliness and Friendly Cooperation Between the People's Republic of China and the Russian Federation”. The Forum was organised by the Russia-China Friendship Association, the Union of Chinese Entrepreneurs in Russia and the Russian Union of Industrialists and Entrepreneurs (RSPP).

The Forum was moderated by S.F. Sanakoev, Deputy Chairman of the Russia-China Friendship Association, and President of the Centre for Asia-Pacific Studies, and Zhu Liqun, Deputy Chairman of the Russia-China Friendship Association and Chairman of the Union of Chinese Entrepreneurs in Russia.

RSPP President Alexander Shokhin noted in his speech that, amid the extreme volatility of the global economy and society, it is important that all countries remain committed to meeting their commitments and implementing agreements. Relations between Russia and China are a rare example of such strong cooperation. Alexander Shokhin remarked that for many years the RSPP has been at the forefront of Russia-China cooperation. Together with its partners, the RSPP established the Russia-China Centre for Trade and Economic Development in 1998, which has become a sought-after mechanism for implementing Russia-China projects. In 2007, the RSPP, together with its Chinese partners, established the Russia-China Chamber for Facilitating Trade in Machinery and Innovative Products. This has taken the supply of high-value-added goods to a new level. In 2019, the RSPP, together with partners from the China Committee for the Promotion of International Trade, the Mongolian Chamber of Commerce and the Korean Chamber of Commerce and Industry, established the North-east Asia Business Association. The Association aims to develop cooperation between member associations and their member companies, identify opportunities and remove barriers to trade and economic cooperation.

The volume of trade between Russia and China has increased 14-fold since 2001. Despite the severe negative impact of the pandemic on the global economy, the volume of trade between Russia and China declined by only 3% compared with 2019. Unfortunately, investment cooperation between Russia and China lags significantly behind trade cooperation: according to the Bank of Russia, direct investment from China into the Russian economy amounted to just over USD 2 billion as of 1 January 2021  - less than 0.5% of total foreign investment. According to the head of the RSPP, it is necessary to reduce the gap between trade and investment cooperation between Russia and China.

"Regular publication of white papers (national and regional level) with data on regulation, priorities and specific development objectives will help to address the information gap. In order to prepare them and update them promptly, regular business surveys need to be conducted. We are planning to conduct such a survey at the North-east Asia Business Association this half-year,” said RSPP President, A.N. Shokhin.

Creation of a unified information system for Russia-China investment cooperation will also contribute to solving the problem of data shortages. It is being developed by the Russian Ministry of Economic Development and VEB.RF. The main functions of such a system are the real-time monitoring of changes, and the collection and storage of data on investment projects. This system will enable the relevant government agencies to get a full overview of investment cooperation, and promptly assist projects in resolving any issues. Another important area is the implementation of measures aimed at building investor confidence, including the use of existing incentives such as investment promotion and protection agreements, and special investment contracts (SPICs). One such SPIC has already been signed by the Chinese company Great Wall. An equally important element of Russia-China relations is intensifying and strengthening cooperation in multilateral dialogue platforms, primarily BRICS, SCO, APEC, and WTO.

First Deputy Chairman of the State Duma of the Federal Assembly of the Russian Federation and Chairman of the Russia-China Friendship Association, Ivan Melnikov, in his welcome address to Forum participants, congratulated the Chinese people on the 100th anniversary of the Chinese Communist Party, and noted that relations between Russia and China were rapidly gaining momentum. The "Treaty of Good-Neighbourliness and Friendly Cooperation", extended for another five years by Russian President Vladimir Putin and Chinese President Xi Jinping on 28 June 2021, confirms the importance of relations between the two countries, and creates a firm legal foundation for the long-term and stable development of Russia-China relations, a comprehensive partnership and strategic cooperation in the 21st century. Trade and economic relations are an important part of the partnership. China is Russia's biggest trading partner, with annual trade of over USD 100 billion. It is planned to increase the volume of trade to USD 200 billion by 2024. The Chairman of the Russia-China Friendship Association also spoke about cooperation in other areas, particularly in energy. Russia and China are working together to build a collider, develop peaceful uses of nuclear energy, explore space and build a station on the Moon. Connecting the Northern Sea Route with the Maritime Silk Road is one of the many things being considered.

Zhang Hanhui, Ambassador Extraordinary and Plenipotentiary of the People's Republic of China to the Russian Federation, stressed that even amid the coronavirus pandemic, Russia-China relations were robust, with a new record in mutual trade turnover expected by the end of 2021. And the extension of the "Treaty of Good-Neighbourliness and Friendly Cooperation" opens up new opportunities for deepening and expanding cooperation.

"Our countries are successfully implementing a number of joint projects in the mining, aerospace and agricultural sectors. The oil pipeline and gas pipeline to the east are operating smoothly. A memorandum of cooperation has been signed on the establishment of an international research station. There is growing enthusiasm for the prospects of cooperation in new areas," the ambassador concluded.

Zhang Yujing, President of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products and Co-Chairman of the Russia-China Chamber for Facilitating Trade in Machinery and Innovative Products, noted the importance of the event in connection with the post-pandemic global economic recovery.

"Our Chamber has long supported cooperation between Russia and China. During the pandemic, in light of travel restrictions, we set up an online platform where over 7,000 Chinese producers are registered. Many Russian exporters have joined this service, which is powered by the ZOOM platform," said Zhang Yuijing.

In his view, Russia-China cooperation needs to be increased through the establishing of production chains. He pointed out that low-value-added products currently make up the bulk of trade between Russia and China.

Dmitry Polikanov, Deputy Head of Rossotrudnichestvo, stressed that education and cultural exchange were a key element in developing relations between the two countries, and play a vital role in any form of cooperation, including in business. The Russian House project in Beijing, which is a representative office of Rossotrudnichestvo in China, is aimed at developing such relations. A significant aspect of cooperation between the two countries is the promotion of Russian language and culture: last year, 940 Chinese students received scholarships in Russian universities, and 240 people are studying Russian language courses at the Russian House in Beijing.  Dmitry Polikanov then "virtually opened" a new centre in Shanghai, which will also help expand and strengthen cultural exchange between the two countries.

A representative of Chinese business in Russia, a member of the board of "China Chengtong International Investment Ltd.”, Ji Chunqin, identified the main features of Russia-China cooperation: a high level of political trust, complementarity of economies, and common strategic objectives.

In his opinion, one of the key projects for developing relations between Russian and China is the House of Russia-China Friendship. Established in 1998, this public organisation promotes foreign relations between Russia and China, facilitates friendly relations with the peoples of China and strengthens Russia's prestige in the world arena by promoting economic, cultural and educational projects of the Russian Federation abroad.

Yana Gordeeva, a representative of the Far East and Arctic Development Corporation, spoke about the importance of the Russian Far East for Russia-China cooperation. At present, there are 23 priority development areas in the Russian Far East. 58 major projects are being implemented with the participation of Chinese capital.

The following also spoke at the forum:

  • Galina Kulikova, First Deputy Chairman of the Russia-China Friendship Association;
  • Wang Teli, Head of China's New Pilot Free Trade Area (Heilongjiang, Harbin);
  • Wang Jun, Head of the Central Asian office of SINOPEC;
  • Suren Vardanyan, Vice President of the Moscow Chamber of Commerce and Industry;
  • Chairman of the Management Board of the Russia-China Centre of Cooperation in a New Era, Zhao Weixing;
  • Mikhail Borisov, General Director of Silkway railway company;
  • Du Jingzhi, Vice President of Joint-Stock Commercial Bank “BANK OF CHINA” (JSC).