Premier Event

Premier Event

By YU YAN

China and Russia look to move beyond resources and light manufacturing to hi-tech trade

PUTIN WELCOME: Chinese Premier Wen Jiabao greets Russian Prime Minister Vladimir Putin at a welcoming ceremony in Beijing on October 11

Russian Prime Minister Vladimir Putin paid an official visit to China at the invitation of his Chinese counterpart Wen Jiabao on October 11-12, Putin’s first visit abroad since he declared his intention to run for president next year.

The visit strengthened diversified practical cooperation and promoted the Sino-Russian strategic cooperative partnership in an all-around way, said Chinese analysts.

During the visit, Putin also met with Chinese President Hu Jintao and Wu Bangguo, Chairman of the Standing Committee of China’s National People’s Congress, the country’s top legislature.

“During this visit, Putin not only discussed concrete plans to promote bilateral practical cooperation with Chinese leaders, but also exchanged views on the future development of Sino-Russian relations from the viewpoint of a presidential candidate,” said Wang Lijiu, a research fellow with the China Institutes of Contemporary International Relations (CICIR).

Good momentum

Putin co-chaired the 16th regular meeting between the prime ministers of China and Russia with Wen in Beijing. The meeting had a comprehensive review of the results achieved since the 15th regular meeting last year, and made plans for cooperation in the next stage.

“To gain more room in the international market, we need to make joint efforts to push our cooperation to a new high,” said Putin after talks with Wen in Beijing.

The regular meeting between the prime ministers of China and Russia was established in 1996. Since its establishment, this mechanism has become an important platform of guiding and coordinating practical cooperation between the two countries.

Hu praised the regular meeting as“pragmatic and productive.” And he said he believed Putin’s visit will further promote the development of the Sino-Russian “comprehensive strategic partnership of cooperation.”

Currently, cooperation between China and Russia shows good momentum, covering fi elds including economy, trade, energy,science and technology.

Of fi cial Chinese statistics show China’s investment in non- fi nancial sectors in Russia rose to $594 million in 2010, up 43.8 percent over the previous year. The money went into energy, mining, forestry, manufacturing and infrastructure projects.

In 2010, trade between the two countries amounted to $55.45 billion, making China Russia’s largest trade partner. In the eight months from January to August 2011, their trade jumped to a new high, hitting $50.8 billion, up 43.7 percent compared to the same period of last year. The fi gure for the whole of 2011 could exceed $70 billion.

Bilateral trade has been restored to the level before the financial crisis in 2008.According to a consensus reached between Hu and Russian President Dmitry Medvedev during Hu’s state visit to Russia in June,the two sides will strive to enhance bilateral trade volume to $100 billion by 2015 and$200 billion by 2020.

Focus on technology

“A highlight of Putin’s visit was the signing of the cooperative memorandum for economic modernization, which attaches great importance to technology cooperation,”said the CICIR’s Wang Lijiu.

The memorandum was signed by Chinese Vice Premier Wang Qishan and his Russian counterpart Alexander Zhukov on October 11.

“Before this, Russia had signed similar agreements only with the EU and South Korea,” said Wang. “This indicates Russia attaches great importance to technology cooperation with China.”

With the development of the Chinese economy, China has developed advanced technology in areas such as high-speed railways, shipbuilding and clean energy. Russia possesses cutting-edge technology in nuclear energy, space and aviation.

The two sides will take joint action to optimize trade structures, and increase the proportion of hi-tech products in bilateral trade, said a joint communiqué issued during Putin’s two-day visit.

They will also actively push forward the cooperation between enterprises of both countries in the hi-tech and innovation areas,said the communiqué.

Currently, most Russian products exported to China are energy products, while most Chinese products exported to Russia are light industrial products, said Wang.

One day before the start of Putin’s visit to China, businesspeople from China and Russia signed 16 economic and trade cooperation deals at the Sixth China-Russia Economic and Business Summit in Beijing.The business agreements, covering a wide range of fi elds, including new energy, mining, machinery, vehicles, electronics and agriculture, totaled $7.08 billion.

Heated negotiations

“Considering the project’s long-term,strategic importance and two countries’mutual needs, I believe it is only a matter of time before China and Russia reach an agreement on gas prices.”

—Zhao Mingwen, a Russian studies expert with the China Institute of International Studies

Natural gas price negotiations were one of the multiple heated topics during Putin’s visit. The negotiations involve the natural gas cooperation project between the two countries for the next 30 years.

In October 2009, Russian gas company Gazprom and the China National Petroleum Corp. reached a framework agreement on the project. According to the agreement, after the natural gas pipeline is completed, Russia will deliver 70 billion cubic meters of natural gas to China each year.

Russia claimed China’s purchase price should be equal to that of Russia’s European customers. But China insisted the price should be lower.

During Putin’s visit, the negotiations went on. Chinese Vice Premier Wang Qishan and Russian Deputy Prime Minister Igor Ivanovich Sechin were trying to narrow the differences.

After the meeting, Sechin announced the two sides made signi fi cant progress over the price negotiations. Putin also said discussions on natural gas supplies for China are approaching their fi nal stage.

“The two governments are making efforts,trying to bring the enterprises concerned to an agreement, but it is dif fi cult,” said Wang Lijiu.“And both sides need more patience.”

“Considering the project’s long-term,strategic importance and two countries’mutual needs, I believe it is only a matter of time before China and Russia reach an agreement on gas prices,” said Zhao Mingwen, a Russian studies expert with the China Institute of International Studies.

China now has a gas pipeline linking it to Turkmenistan, Uzbekistan and Kazakhstan.Also, two new gas pipelines are under construction in the region. In addition, China has launched a gas pipeline project with Myanmar and is strengthening cooperation in gas projects with Australia.

The China-Russia pipeline will enter China from its northeast, an important industrial base of China. The project will therefore be of great importance to China economically, Zhao said.

The price should be fixed through negotiations between Gazprom and the China National Petroleum Corp. based on market rules, he said. Differences between the two companies have not affected the two countries’ sound political relations.