In Russia

By Christopher Bodeen, Associated Press, Saturday, June 25, 2016

BEIJING — Russian President Vladimir Putin on Saturday emphasized economic ties with China and praised what he called Russia’s “all-embracing and strategic partnership” with its neighbor. His visit to Beijing took place against the background of a drop in trade and lingering mistrust.

Putin told Chinese Premier Li Keqiang that ties were based firmly on common economic interests, a reference to Russian hopes for Chinese investment and purchases of its oil, gas and military exports. “Our relations really have the character of an all-embracing and strategic partnership,” Putin told Li at the start of their meeting at the Great Hall of the People in the heart of Beijing.

While Russia and China are linked by cooperation on the international stage, as well as in culture, education and other spheres, “in one way or another, everything has an economic base,” Putin said.

Leaders from both countries have extolled the blossoming strategic partnership between the former communist rivals, despite a major decline in two-way trade and the failure to materialize of a slew of ambitious projects.

Observers attribute the slow progress to Beijing’s hard-nosed bargaining position and the Kremlin’s deep-seated suspicions about the growing might of China.

Vladimir Putin and Li Xinping following meetings in Beijing on June 25, 2016

Vladimir Putin and Li Xinping following meetings in Beijing on June 25, 2016

Putin later met with Chinese President Xi Jinping, to whom he said the people of both countries had a strong desire to “strengthen, develop our relations.”

“I’m sure our countries can reach a bigger success in all areas in trade, investment, agriculture, energy, and of course in high tech, which is a priority for us,” Putin told Xi.

Xi told Putin that the two countries should “promote widely the idea of being friends forever.”

The close personal relationship between Putin and Xi and their shared desire to counter perceived U.S. global domination appear to be the main driving forces behind Russia-China cooperation.

The renewed push to bolster relations with China came after the United States and the European Union imposed an array of crippling sanctions on Russia over its annexation of the Crimean Peninsula in March 2014, cutting its access to world financial markets and blocking the transfer of modern technologies. Moscow was also purged from the Group of Eight leading industrialized nations.

In May 2014, Putin visited Beijing and presided over the signing of numerous deals, including a mammoth 30-year natural gas contract worth $400 billion, seeking to show the West that Russia still had viable options.

A later deal saw a branch of Chinese state-owned energy company CNPC buying a stake in a project to build a giant liquefied natural gas plant on the Yamal Peninsula in the Arctic. Also in December, China’s Sinopec bought a stake in Russia’s Sibur energy company.

China has also promised to offer multibillion-dollar loans to help build a high-speed rail link between Moscow and the Volga River city of Kazan.

Other ambitious deals have been expected, but most of them have floundered amid Russia’s economic uncertainty.

The sharp devaluation of the Russian currency under the double impact of low global oil prices and Western sanctions has been a key factor behind bilateral trade dropping from nearly $100 billion a year in 2014 to just over $60 billion last year. Energy resources account for two-thirds of Russian exports to China.

Moscow has also been unsettled by Beijing’s ambitious Silk Road Economic Belt project, intended to encourage infrastructure development in formerly Soviet Central Asia, which Russia sees as its home turf. China has promised to coordinate the project with the Russia-dominated Eurasian Economic Union, but clearly has put an emphasis on bilateral deals with Kazakhstan and other members of the bloc.

The prospect of potential Chinese expansion long has worried residents of Russia’s sparsely populated far eastern regions, especially over the Kremlin’s decision to surrender significant slices of land along the 4,200-kilometer (2,600-mile) border to China in a 2005 demarcation deal.

While ambitious hopes for closer economic cooperation haven’t materialized, Russia and China have bolstered their military ties, which have included joint war games and contacts on missile defense. Russian weapons exports to China, which peaked in the 1990s and fell dramatically in the following decade, have received a new boost recently.


Statements by Xi Jinping Vladimir Putin following Russian-Chinese talks

Published on the website of the President of Russia, June 25, 2016

President of the People’s Republic of China Xi Jinping:

Mr President, ladies and gentlemen, good afternoon.

President of China Xi Jinping speaking in Beijing on June 25, 2016 (TASS)

President of China Xi Jinping speaking in Beijing on June 25, 2016 (TASS)

My old friend President Putin and I are very pleased to see you.

Yesterday, we attended the anniversary summit of the Shanghai Cooperation Organisation in Tashkent, Uzbekistan, and today, we had an official meeting here in Beijing. I warmly welcome President Putin to China.

We had a thorough exchange of opinions on the bilateral agenda, current international and regional issues, and have reached agreements on a wide range of issues. We have signed and made public the Joint Declaration of the People’s Republic of China and the Russian Federation, a joint declaration on the strengthening of global strategic stability and a joint declaration on cooperation in the development of the information space. Our foreign ministries circulated a statement by China and Russia on strengthening the role of international law. We also signed a number of cooperation agreements in priority areas between the competent authorities and companies of the two countries.

President Putin’s current visit has been fruitful, lending a fresh impetus to the development of Russian-Chinese relations. Twenty years ago, China and Russia established relations of partnership and strategic interaction, and 15 years ago, the two countries signed the Treaty of Good-Neighbourliness, Friendship and Cooperation. These two events are milestones in the history of Russian-Chinese relations, because it is thanks to the spirit of strategic cooperation and the idea of eternal friendship documented in that treaty that Russian-Chinese relations are being continuously enriched, deepened and elevated to new levels.

President Putin and I have unanimously decided that the more complicated the international situation, the more determined we should be, guided by the spirit of strategic cooperation and the idea of eternal friendship. We should strengthen mutual support, enhance mutual political and strategic trust and cooperation, and unswervingly deepen our relationship.

Since the beginning of this year, thanks to the joint efforts in practical cooperation between our countries, we have seen a good development trend. From January to May 2016, bilateral trade amounted to $25.8 billion; it ceased to decline and grew by 2.7 percent compared to the same period last year.

We have accumulated positive factors in our trade and economic relations. For example, China is still Russia’s largest trade partner. Russian machinery and hi-tech exports to China are rapidly growing. Large joint projects of strategic importance are progressing at a high rate.

China and Russia are the main economies among emerging markets. President Putin and I both noted that the two sides have the confidence and opportunity to expand regional economic cooperation, to overcome the global economic challenges and to maintain the positive dynamics of economic development through deepening practical cooperation and aligning our interests, in particular by converging the national development strategies “One Belt, One Road” and the Eurasian Economic Union.

In recent years, we have successfully developed our humanitarian cooperation. The success of the cross-year project at the national level, the years of the Chinese and Russian languages, tourism, and friendly youth exchanges have contributed to strengthening mutual understanding and traditional friendship between our peoples. Last year, 2.46 million Russian and Chinese people visited each other’s countries, and China has become the largest source of tourists to Russia.

Today, more than 20,000 Russian students are learning the Chinese language, while 50,000 Chinese students are studying Russian. The total number of exchange students in both Russia and China is 45,000.

We both think that these numbers are not the limit. The parties should continue to strengthen mutual understanding and friendly feelings by holding events within the media cross years and thus establish a more favourable public opinion for the development of bilateral relations, to jointly strengthen our right of voice internationally. I hope that you, our friends in the media, will take an active part in the media cross years and will make your contribution to China-Russia friendly interaction.

President Putin and I believe that China and Russia as permanent UN Security Council members and a constructive force for securing regional and international security and stability will be committed to sustaining the aims and principles of the UN Charter and the basic provisions of international law, ensuring a global strategic balance and stability and will firmly stand up for international justice.

We always support a political settlement of international disputes and current regional problems by means of friendly consultations and peace talks. We oppose the use of force and threats of using force, casual introduction of sanctions and threats of sanctions, and a unilateral policy and unilateral actions without consent form the parties concerned. We shall continue our efforts to build up a new type of international relations based on the principles of cooperation and common benefit.

Friends,

President Putin and I are set to make joint efforts to assist in the sustainable and positive development of the China-Russia relations of an all-encompassing partnership and strategic interaction. We will have a number of meetings before the end of the year on the sidelines of important international events. I have already invited President Putin to the Chinese city of Hangzhou in early September for the G20 Summit. We will continue our exchange of opinions there.

Thank you for your time.

President of Russia Vladimir Putin:

President Xi Jinping, ladies and gentlemen,

Vladimir Putin speaking in Beijing on June 25, 2016 (TASS)

Vladimir Putin speaking in Beijing on June 25, 2016 (TASS)

The year 2016 is of particular importance to our bilateral relations. This year, as Mr President has already said, we mark the 20th anniversary of the establishment of the Russian-Chinese strategic partnership and 15 years of the signing of Treaty of Good-Neighbourliness and Friendly Cooperation.

These two anniversaries have largely predetermined the packed agenda and high intensity of this visit. I think you saw this for yourselves as you witnessed the signing of various documents. These are agreements pertaining to a variety of activities and areas of cooperation as Mr President and I have said on our way to this room, including humanitarian cooperation, the media (I am going to say more about this later), and the economy, of course, including various projects.

Mr Xi Jinping and I have had talks, first one-on-one and then an expanded meeting with deputy prime ministers, heads of ministries and departments, and with executives of major companies from the two countries. We discussed in detail the entire scope of issues on the bilateral and international agendas and signed an impressive package of documents, as I said.

Prior to that, the Russian delegation had a thorough discussion with Premier of the State Council Li Keqiang. They also exchanged views with Chairman of the Standing Committee of the National People’s Congress about the role of inter-parliamentary relations.

Priority in the negotiations has traditionally been given to strengthening economic cooperation. China is a leading trading partner of Russia, as we have already said.

Global economic crises, instability on commodity markets and foreign exchange markets could not but affect our bilateral relations. We have seen some cutbacks in trade, although last year, the Russian-Chinese goods turnover amounted to $63.5 billion, which is Russia’s maximum with any country.

We have agreed with our Chinese partners to step up efforts to reverse this downward trend. As the Chinese President said, indeed, we were happy to see positive momentum at the beginning of this year.

This year, Russia almost doubled machinery and equipment exports to China. We are very grateful to our Chinese friends, because the structure of our trade has always been our focus and we have always paid great attention to it. Thanks to the joint efforts and the very welcoming attitude of our Chinese friends, we have been able to begin changing the structure of our trade in the right direction.

Supplies of farm produce and foods to the Chinese market increased by 30 percent. This, as I said, has given us an emerging positive trend.

To reduce dependence on foreign exchange markets, we are expanding the use of national currencies in mutual settlements. The share of payments in Russian rubles is three percent, and the share of the Chinese yuan is even greater at nine percent. The latter figure should rise significantly after Russia establishes a clearing and settlement centre for the yuan.

Our focus is on building up industrial cooperation, launching joint projects in infrastructure, resource development, and development of agriculture.

The Joint Commission on Investment Cooperation, which met yesterday, has already selected 58 commercial initiatives with investment totalling $50 billion; 12 projects are already underway.

However, energy of course remains the locomotor of business relations between our countries. Russia is stepping up deliveries through the Russian-Chinese oil pipeline, and the Tianjin refinery project continues.

The Power of Siberia pipeline is being built on schedule and will run at full capacity in 2020. Gas supplies from Russia to China via the ”western“ route are being negotiated. Our Chinese partners have increased their involvement in Russia’s largest project to produce liquefied natural gas, Yamal LNG.

Cooperation in peaceful nuclear energy is growing. The plan is for two more power units built with Russian technology to go online at the Tianwan nuclear power plant in 2018. We are now negotiating further joint operations in third country markets.

We are expanding close cooperation in aircraft building and the space industry. Intergovernmental agreements have just been signed launching programmes to jointly design and build a wide-body long-range airplane and a heavy civilian helicopter. Roscosmos and the China National Space Administration have agreed to promote interaction in rocket engine construction.

Russia and China are pursuing large-scale initiatives on transport infrastructure development. We are working together to build a new motorway from Europe to Asia via Russia, in fact, a trans-Eurasia motorway which is meant to improve road communication across the entire giant continent. We are increasing the freight transit capacity of the ports in Primorye Territory. We will coordinate the construction of the Moscow – Kazan high-speed railway before the year’s end, but a step in that direction has also been made today. Our countries take part in establishing a “new land grain corridor”, which will allow for the export of Siberian grain to China and other Asia-Pacific countries.

Such diversification of transport and logistics routes is in line with the concept of aligning the Eurasian Economic Union and the Silk Road Economic Belt. Today, an official start was announced for talks on a trade and economic cooperation agreement between our integration projects. It promises a new level of partnership, which presupposes the creation of a common economic space on the entire Eurasian continent.

Special emphasis was laid at the talks on the enhancement of inter-regional and border region relations. I should stress the high efficiency of a relatively new interaction programme in the Volga-Yangtze format between the Volga Federal District and the provinces of the upper and middle reaches of the Yangtze River. Over 20 cooperation agreements have already been signed within this format.

We have also agreed on furthering humanitarian relations between the two countries. Within the cross years of the two nations’ media, interaction is improving in the information area. In the near future, the third Russian TV channel Katyusha will start broadcasting for the Chinese audience. ITAR-TASS and Channel One are also committed to expanding contacts with Chinese partners.

We are strengthening cooperation in the field of sports. Next season – we agreed about this in previous meetings with our friend, the President of China – next year we will make arrangement for the Chinese hockey team Kunlun Red Star to play in the Continental Hockey League. I think it will attract the attention of fans in both China and Russia and in other countries that are involved in this high-profile international event.

Naturally, we devoted a lot of time to international issues. Russia and China have very close or almost identical views on international developments. We will continue to closely coordinate our steps in multilateral organisations, especially the UN, the SCO and BRICS. As you may have noticed, yesterday we made a very important step in the expansion of the SCO.

Russia will provide the necessary support to our Chinese friends during their current presidency in the G20 and in their preparations for the Group’s next summit, which will take place on September 4–5 in Hangzhou. We have already held the presidency of that organisation. However, we know that our Chinese partners take preparations for this event very seriously.

We discussed the next steps in dealing with the most pressing global and regional problems, joint efforts to combat international terrorism, strengthen security in the Asia-Pacific region, and ensure the nuclear-free status of the Korean Peninsula. Assistance in the Syrian peace process, supporting peace and stability in the South China Sea and Central Asia are among our common foreign policy objectives.

In conclusion, I would like to thank our Chinese friends for their hospitality, effective work, and a businesslike and constructive approach to all the issues discussed. Indeed, our meetings, our talks were held in a very sincere and, without exaggeration, friendly atmosphere.

Thank you.

*****

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