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China-Russia continue forging closer ties

Editor: Qian Ding 丨CCTV.com

11-10-2016 11:33 BJT

By Tom McGregor, CNTV Panview Commentator

China and Russia have entered a new era of closer ties on the diplomatic and economic fronts. Beijing and Moscow understand that in a world of geo-political complexities, friendlier neighborly ties can benefit both sides, so long as they hold high levels of mutual trust and respect.

Chinese Premier Li Keqiang met his Russian counterpart Prime Minister Dmitry Medvedev earlier this week in St. Petersburg for the 21st China-Russia Prime Minister’s Regular Meeting.

Li Keqiang and  Dmitry Medvedev

Li Keqiang and Dmitry Medvedev

They held talks to discuss measures for bilateral cooperation in the fields of finance, infrastructure construction, as well as greater collaboration with small and medium-sized enterprises.

More specifically, both sides highlighted sound cooperation in the sectors: electromechanical equipments, import and export of agricultural products, development of energy resources and aerospace.

Moscow is requesting further help from China to build high-speed railways and upgrade finance mechanisms in the country.

Boosting cross-border trade

China and Russia is forecast to have $US40bn. in trade by the end of the year. Nevertheless, Russian President Vladimir Putin hopes they could boost trade to $US200bn. in the next 3-7 years.

Li Keqiang and Vladimir Putin

Li Keqiang and Vladimir Putin

The two sides support establishing preferential trade regimes, along with exchanging national currencies for settlements. Beijing and Moscow signed up for the Joint Russia-China Venture Fund that would inject more trade, investment and scientific cooperation.

Plans are underway to support an inter-governmental commission.

“It was decided to set up a 5th inter-governmental commission, which will deal with the cooperation on the Far East of our country and in the northeast of China, which shows the real scope of interaction,” Medvedev told RT.

This week, Russian oil giant Gazprom and China Development Bank (CDB) signed an agreements on potential finance deals. CDB would offer a $US1bn. loan, scheduled for full repayment in 15 years. The measure can add more Chinese currency flowing into the Russian economy.

Connecting Eurasia with Belt & Road

China’s Belt and Road initiative can add stronger impetus to bilateral trade and investment, as well as to enhance regional security. The Shanghai Cooperation Organization (SCO) Heads of Government Summit was held in Bishek, Kyrygzstan on Nov. 4.

Premier Li had called for a new free trade zone among SCO member states - China, Russia, Kazakhstan, Kygyzstan, Tajikistan and Uzbekistan.

Member states would be encouraged to remove trade barriers and support each other on economic cooperation. The Belt & Road could serve as a driving force.

“The Belt & Road project could affect Chinese economic relations with Russia if both countries take material steps to increase investment in transportation and logistics projects connecting them,” said Thomas Remington, a Goodrich C. White professor of Political Science at Emory University.

The Belt & Road can connect Moscow with China and Central Asia through six projected transnational corridors.

Transforming payments systems

Moscow continues to face ongoing sanctions imposed against them by the European Union and Washington. The punitive measures were enforced over Russia’s annexation of Crimea. Western governments remain stubborn and have hinted they will not stop the sanctions anytime soon.

Accordingly, Beijing, which opposes sanctions against Moscow, can play a stronger role to boost economic ties with Russia. A key concern involves, cross-border payments mechanisms, since the sanction make it more difficult for Russian companies to engage in global deal-making.

The two countries will help Russia to set up a new credit card cross-border payments system, called Mir, which will be connected to China’s payment system, UnionPay.

“We are currently considering ways of harmonizing our national payment system,” Medvedev told Reuters. “We believe that this would enhance the reliability of the financial systems.”

Long-lasting friendship

China and Russia can work together in peaceful coexistence to establish more prosperous business partnerships and inter-governmental relations. The two nations can achieve greater success as they embark on developing stronger ties.



( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

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