Russian Siberia Attracting Mutual Investment From Kazakhstan and China

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The Krasnoyarsk Economic Forum has been taking place in Siberia, an event at which the development of Siberia, taking into account the current economic and geopolitical situation, is discussed.

4,000 attendees from the government, business community, scientific and public organizations, young professionals discuss the development of the Krasnoyarsk Territory, Siberia and the country as a whole, taking into account new geopolitical and economic conditions, the impact of tourism on the regional economy, as well as personnel tasks for the development of Siberia in an era of new challenges.

Krasnoyarsk Krai, Siberia

At the Forum plenary session, Russian trade representatives from both China and Kazakhstan spoke about how the geopolitical situation has affected relations between the countries. Alexei Dakhanovsky, Trade Representative of Russia in China, noted that economic ties between Russia and China have been actively developing for many years. At the end of last year, the trade turnover reached a record more than US$190 billion. Russia rose from tenth to sixth position in the list of China’s largest trading partners and became the leader among countries in terms of growth in the merchandise trade.

Dakhanovsky stated that “We see the readiness of Chinese businesses to work together with Russia. And it’s not just about trade. Our partners talk about their interest in investments and opportunities in industrial cooperation, offering their production sites on preferential terms and look at production sites in Russia, which Western companies are leaving.”

This is reflected in the growth in e-commerce, consumer goods and food products. The volume of deliveries to Russia of Chinese cars increased by 11%, equipment by 15%, and trucks, agricultural machinery, some items of the food industry, and tobacco increased significantly. Russian logistics for exports and imports meanwhile continue to reorient to the East. Siberia is strategically placed between West and East Russia and also North-South into Asia. New transport routes including road, rail and new bridges have been and are continuing to be built to connect the Siberian region with Asia.

Andrey Babko, the Trade Representative of Russia in Kazakhstan followed that up by saying “Kazakhstan today is a platform for transit, for the creation of new transport corridors that can operate in the interests of the entire Central Asia and the entire Caspian region. The operation of the North-South transport corridor will provide the shortest distances for transportation between countries.” said.

Those routes – which are faster and less expensive than previous corridors, are both helping develop Kazakhstan as a transit hub between East and West, in addition to providing huge facilitation for Russian eastbound exports. The Russian government have made it a de facto state policy to only export to friendly countries, many of which are East and South. With China also well connected to ASEAN and East Asia, Russian goods are now finding their way across the region and into new markets.

While exports to China have significantly increased, so have those to major economies such as Turkiye, India and Vietnam.
These trends are continuing. For example, the Russia-China bilateral trade space rose by 25.9% in the first two months of 2023, reaching US$33.6 billion. India imported record amounts of Russia oil in February, with Russia’s share in India’s imports rising to 35% of the total in February 2023, and including other commodities such as grains and fertilizers. Turkiye’s imports from Russia continue to rise, increasing to US$4.7 billion in January from US$4.4 billion in December 2022, while it is a similar picture with Vietnam, while Russia and ASEAN have also been getting closer in terms of trade and development cooperation.

None of this would be possible without the cooperation of Russia’s eastern trade partners and is one reason why investment into Kazakhstan has also been increasing.

While the focus was largely on trade routes east, other topics for discussion at the forum included the development of Siberian business relations with Asian countries, and the potential of the Trans-Urals region including transportation and infrastructure development. Siberia is now looking for trade and investment not just East but also South and to the Middle East – with the International North-South Transportation Corridor (INSTC) a key part in getting Siberian exports to markets into Iran, the UAE, and India.

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