Legitimate Russian businesses and investors in China are reporting difficulties in being able to open or operate their bank accounts in the country, apparently due to the effect US sanctions are having on the international business environment. Dezan Shira & Associates report that their Russian clients in Beijing and elsewhere in China are unable to access banking facilities, or establish accounts as Chinese banks are unwilling to operate them under threat of retaliatory punishments from the US. For the small number of Chinese banks that are prepared to offer services, the corresponding (clearing) bank is declining transactions.
Russia’s Vedomosti newspaper has reported that the Russian government is planning the creation of two offshore financial centers (OFCs) with special legal systems in the Kaliningrad Region and the Vladivostok in Russia’s Far Eastern Primorsky Krai territory to support business and trade.
Kaliningrad is based in the Western Baltics and is a Russian enclave surrounded by the European Union. The OFC may be situated on its Oktyabrsky Island, to allow customs and financial operations to be physically separated from normal commercial applications at standard national tax rates. A similar plan is envisaged for Russky Island near Vladivostok in Primorsky Krai.
Russia has begun making trades in cryptocurrencies, with trades beginning on a trial basis in Switzerland and an trade deal with Venezuela for Russian auto component parts being settled in Venezuela’s own national cryptocurrency, the Petro.
Russia’s Gazprombank, the third largest bank in the country, is planning to execute its first test deals with cryptocurrencies later this year via its subsidiary in Switzerland. According to deputy chief executive Alexander Sobol, the bank doesn’t currently have plans for massive introduction of the feature, but is looking into it due to existing demand from some of its major clients. “It’s going to be test deals. Not major ones, just for ourselves. Some of our major clients are interested in such services, so we are currently looking into the possibilities of how to organize it,” Sobol said.
Russian Prime Minister Dmitry Medvedev signed an order this weekend to allocate funds for financing the priority activities of the program – “The Digital Economy of the Russian Federation”. The document was published on Saturday on the government website and can be found in English here. According to the document, US$53.14 million from the reserve fund of the Russian government has been allocated to finance priority activities of the program.
The funds will be used for the state digital programs – “Information Society (2011-2020)”, “Economic Development and Innovative Economy”, “Development of the Transport System”, and “Development of the Electronic and Radioelectronic Industry in 2013-2025”.
Novatek Gas and Power Asia Pte. Ltd., Novatek’s wholly owned subsidiary, shipped to the Indian market its first cargo with LNG produced by the Yamal LNG plant, Novatek said in a press release published on Tuesday.
Yamal LNG’s shareholders are: Novatek (50.1 percent), Total (20 percent), CNPC (20 percent), and the Silk Road Fund (9.9 percent).
“One of our core priorities enumerated in the Company’s Corporate Strategy up to 2030, is the expansion of the supply geography and the growth of our presence in the key Asian markets”, Lev Feodosyev, First Deputy Chairman of Novatek said. “The first cargo delivered to the growing Indian market is an important development in this direction”.
Chinese State Council Premier Li Keqiang has stated that trade between Russia and China will reach US$100 billion. “There are huge prospects for Russian-Chinese trade and economic cooperation and there is no doubt that trade can reach $100 billion,” Li said at a press conference.
China was Russia’s largest trade partner. In 2017, trade between Russia and China grew by 20.8 percent year-on-year to reach US$84 billion. Chinese exports to Russia increased by 14.8 percent to US$42.9 billion, while imports from Russia increased 27.7 percent to US$41.2 billion, according to China’s General Administration of Customs. That means Russia is one of the few countries to have a relatively balanced trade accord with China.
“The number of Chinese tourists in Russia reached 1.5 million in 2017. This is the largest number among all countries for Russia. China, for its part, ranked second among the countries visited by Russian tourists,” the Chinese envoy said. Li was speaking at a board meeting of the Russian Ministry for the Development of the Russian Far East in Vladivostok.
Construction of the Nizhneleninskoye-Tongjiang railway bridge is expected to be completed this year, together with other cross border infrastructure programs aimed at enhancing Russia’s connectivity with China, Central Europe, and Central Asia, according to senior officials of northeast China’s Heilongjiang Province. The Nizhneleninskoye-Tongjiang bridge, which crosses the Amur River in the far northeast corner of Russia and China, aims to enhance Russia’s connectivity with China, and the Belt and Road routes.
Heilongjiang is a landlocked province, and the bridge will help connectivity for Russian goods to be processed in China then shipped onto markets in Japan, South Korea, and North America via the Primorye-1 Corridor.
Two major recent events have begun to impact EU attitudes towards Russia as the reality of unpredictable weather together with an increasing trade unreliability with the United States has jolted European nations out of the rut of anti-Russian views. The US has damaged its credibility with the EU and its other trade partners, as President Trump, reacting to protect a declining industry (as he did with coal) to “make America great again”, has raised import tariffs for steel and aluminium – in an attempt to bring back jobs and to protect his ratings. Yet, even as he insists that these are necessary measures to protect against what he calls Chinese dumping on US markets, the latest data from the US Department of Commerce actually shows that Canada and the EU are the largest suppliers of steel to the US, and not China.
In addition to the export demand, Russia’s precious metals refineries reportedly produced 306.9 tons of gold in 2017, some 6.4 percent more than 288.6 tons produced in 2016. 18.4 percent of the gold produced in the country was exported, while the balance of 224 tons of the metal were purchased by the Central Bank of Russia to add to the country’s gold and foreign currency reserves.