Russia–China

4 September 2019

Russia–China

KEY CONCLUSIONS

Great development prospects for Russian-Chinese cooperation

“Russia and China are the closest neighbours, and the opportunities for our interaction seem very significant, broad and, to some extent, phenomenal,” Andrei Bystritsky, Chairman of the Board, Foundation for Development and Support of the Valdai Discussion Club; Professor, National Research University Higher School of Economics.

“2019 marks the 70th anniversary of diplomatic relations between our countries. Collaboration within the BRI (China’s strategic Belt and Road Initiative – Ed.) also appears to be of great importance. In the course of this cooperation, we plan to further implement those strategic development initiatives and increase the level of cooperation between our countries, improve business climate, make it more secure and promote cross-border trade,” Long Dawei, Chairman of the Board of Directors, Chengzhi.

“It is evident how Russia and China complement each other. Only together we can solve all current global issues,” Zhao Jiejun, Vice President, Mengniu Dairy Company Limited.

“In the future, our cooperation will involve many mutually complementing industries. <...> There are certain goals that China cannot accomplish on its own, but can do it rather successfully in Russia,” Yang Tingting, Chairman, China Commercial Counsellor and Entrepreneurs Association.

Russian market attracts Chinese investors

“Today we have nearly fifty investment projects in ASEZs with investments coming from China,” Alexander Krutikov, Deputy Minister for the Development of the Russian Far East and Arctic.

“Our group’s most important project right now is underway. The total investment will be USD 700 million: we are building a methanol production project in the Amur Region. <...> You know about the unprecedented incentives and support measures in the Far East, which make it possible to build powerful and capital-intensive industries,” Boris Krasnovskiy, General Director, ESN Group.

“The Russia–China Investment Fund <...> invested over USD 7 billion in more than 35 projects together with foreign partners and is one of the leading cross-border investment partners in Russian-Chinese cooperation,” Oleg Chizh, Deputy Co-Chief Executive Officer, Russia-China Investment Fund (RCIF).

“In Russian agriculture, there are very good conditions for mutual cooperation, and we need to look for ways to implement it,” Zhao Jiejun, Vice President, Mengniu Dairy Company Limited.

“In agriculture, we have achieved remarkable success. Russia is now our largest market in this area,” Sun Guoqiang, President, Zhongding Dairy Farming Co., Ltd.

PROBLEMS

Regulatory barriers

“Any investment project always faces many difficulties on its way. Many of them have to do with the fact that foreign investors need to figure out our legislation and overcome a number of barriers,” Alexander Krutikov, Deputy Minister for the Development of the Russian Far East and Arctic.

“When in China, we see that the demand is very high, but our goods and products are sometimes not represented properly,” Sergey Iniushin, Trade Representative of the Russian Federation in the People's Republic of China.

Limited geography of cooperation

“We must expand the geography of cooperation. Traditionally, Russian regions trade with the Chinese Northeast. It is good, and it is a right thing to do, as we now have large experience with the Northeast. But at the same time, the wealthy, powerful central and southern provinces of China remain untapped,” Sergey Iniushin, Trade Representative of the Russian Federation in the People's Republic of China.

Inadequate development of logistics infrastructure

“The logistics infrastructure which is not properly formed is a hindrance. In the supply of goods, logistics, as a rule, accounts for more than 50% of the cost,” Sergey Lebedev, Director for Government Relations, Alibaba Russia.

SOLUTIONS

Using partner’s best practices

“When creating the ASEZs and the Free Port, we learned from our Chinese colleagues, we studied the experience of creating economic zones, which turned out to be very useful for us. According to international experts, the ASEZs and the Free Port indeed offer the conditions for doing business that are among the best in Asia today,” Alexander Krutikov, Deputy Minister for the Development of the Russian Far East and Arctic.

“The main problem of an eco-cultural business is the lack of technology. Our partner, our neighbor China has achieved a lot in this industry, and now, as an example of the interaction with our Chinese partners, we use the best practices that China has been implementing for decades. Those technologies that have already been tested in China, we now successfully try them out here,” Roman Vityazev, Chairman, Far Eastern Union of Mariculture Enterprises; Chairman, Hyperion.

Removing restrictions for trade

“We need to create cross-border economic zones that will contribute to the growth of trade,” Alexander Krutikov, Deputy Minister for the Development of the Russian Far East and Arctic.

“Bonded zones in China and, potentially, building bonded zones in Russia could help,” Sergey Lebedev, Director for Government Relations, Alibaba Russia.

“We have a chance to make a very fast leap by simply conducting certain administrative procedures. <...> As soon as we introduce standards and bring our trade relations out of the grey area into a format that we all understand, many unresolved problems will suddenly resolve by themselves,” Konstantin Bogdanenko, Acting Vice Governor of Primorsky Territory.

Developing the export potential of Russian companies

“We must significantly increase production volumes and our export potential to satisfy the demand that comes from the People’s Republic of China,” Sergey Iniushin, Trade Representative of the Russian Federation in the People's Republic of China.

“We need to considerably grow small and medium-sized businesses and cooperate in order to negotiate like the Chinese buyers are used to,” Konstantin Bogdanenko, Acting Vice Governor of Primorsky Territory.

For more information, visit the Roscongress Foundation’s Information and Analytical System www.roscongress.org

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