China Planning To Ramp Up Russian Belt & Road Initiative Investments
Moscow and Beijing discuss attracting China SOEs into Russian infrastructure projects
The Russian Ministry of Economic Development has stated that Russia and China are interested in attracting Chinese investors into Russian domestic infrastructure projects, localised production and oil refining.
China hosted a meeting of the Ministerial level “Russian-Chinese Permanent Working Group on Interregional and Cross-border Cooperation and Special Economic Zones” last week.
The Russian delegation was headed by Deputy Minister of Economic Development Dmitry Volvach, while the Chinese side was represented by Deputy Minister of Commerce Lin Ji. The Group was originally established in January 2021.
At last week’s meeting, the Russian side discussed Chinese involvement to help implement investment projects in Russia in transport infrastructure, construction, deep processing of oil and gas, tourism, agriculture and food industry, fishing industry, solid waste management, as well as in localisation of production in Russia, the Ministry of Economic Development said in a statement following the meeting.
Russian and Chinese companies have already been jointly active in various projects, the flagship being the Moscow-Kazan High-Speed railway which will be operational in 2024 – in time for Russia to host the next annual BRICS summit to show off the completed railway. China’s CRRC have been assisting with the track and will also provide rolling stock.
At present, it takes 12 hours to make the rail journey. The high-speed link will reduce that to just over 3 hours. Kazan is Russia’s fifth largest city and an important hub for Russia-China trade.
Russian banks are sanctioned by the West, making them concentrate now on domestic infrastructure projects. China is a good match given their own infrastructure build expertise. Both will want returns: railway, highways, ports, and airports all provide cash flow returns that can be paid out as dividends.
According to Volvach, Moscow is also discussing with China joint projects in the development of alternative energy sources, artificial intelligence, genetic engineering, digital and bio-economy. At the same time, Russia is interested in Chinese investments in transport infrastructure and the development of cross-border communication and power lines in border areas.
The working group meeting discussed interaction between the special economic zones of the two countries. The ministry specified that the work on updating the plan of Russian-Chinese investment cooperation will be completed soon. The parties agreed to hold the next meeting of the working group in 2024 in the Moglino SEZ in Pskov.
Cheng Yikun, deputy director of the Department of Europe and Central Asia at the Chinese Foreign Ministry stated that “In May (2023), negotiations between Russia and China resulted in the signing of five documents in trade, medicine, sports and intellectual property. In particular, a memorandum was signed on deepening investment co-operation in trade in services. A number of documents are planned to be signed during Russian President Vladimir Putin’s visit to China in October.”
Source: Vedomosti with additional commentary by Chris Devonshire-Ellis.
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