Chinese Premier Li Keqiang has paid a landmark visit to Moscow which brought a rich yield of over 40 agreements, including ruble-yuan currency swap deal to boost bilateral trade and make it less dependent on the dollar and euro. While Western sanctions severed US and EU ties with Moscow, trade between Russia and China is getting new steam and is expected to hit $200 billion in the next six years.
Studio guest Gleb Ivashentsov, Russia’s former Ambassador to South Korea and Myanmar, Deputy General Director of Russian Asia-Pacific Council, Yuri Tavrovsky, prominent expert on China, professor with Moscow Peoples Friendship University, and Michael Ben-Gad, Professor of Economics at City University London, UK, shared their opinions with Radio VR.
What do you make of that visit? Do you think it really reinforced the all-weather partnership, so to say, between Moscow and Beijing?
Gleb Ivashentsov: Prime Minister Li’s visit to Moscow really was a very important event. We’ve got a very good political understanding between the top leaders of the two countries – President Putin and Chairman Xi Jinping. The political agreements are now supported by the economic agreements signed by the two prime ministers, and this really strengthened the economic ground for the strategic Russian-Chinese partnership, because these agreements cover the most important spheres of our cooperation in science, technology, economics, defense and other spheres.
Can you elaborate of the Ruble-Yuan currency swap deal? Do you think it will really make our bilateral trade less dependent on the Dollar and Euro?
Gleb Ivashentsov: Of course, it will. But the importance of that deal is much wider.
I was monitoring the Western media and there were the attempts to downplay the importance of the visit of Premier Li to Moscow. To what extent do you think those assessments are credible?
Yuri Tavrovsky: They are hoping that China and Russia will not cooperate and they won’t have to deal with the Eurasian giant enormous economic, political and security proportions. I think the visit was very important, it was a big step forward on the way of strengthening Russia-China strategic partnership.
On the other hand, we must understand that it is Putin and Xi Jinping – the two presidents of the two nations – who are working as the architects of our relations, while the prime ministers Li Keqiang and Medvedev, they are the construction workers.
So, from this perspective I think that Li Keqiang’s visit was more than successful, because they have signed 49 documents. One of them, for example, is about this gas pipeline. The political agreement was reached in May by Putin and Xi Jinping, and now they were signing papers on the technical part of the deal.
But there is one very picturesque agreement reached by Li Keqiang and Medvedev. I'm talking about the high-speed railway between Moscow and Kazan. This railway will be financed by China. The trains speed will reach up to 400 km\h and it will shorten the travelling time from 13 hours to 3.5. And what is even more important, I think, is that people in Beijing look at this project as only the beginning of the trans-Eurasian high-speed railway from Beijing to Moscow.
China wants the road of its exports to Europe, to the ME, to Africa not to be threatened by the US navy. This present maritime route is under the great threat from the US navy and the new, the so-called Silk Road will be land base and will go along the friendly territory of Russia.
So, there are so many interesting things for us in the future. In November this year Putin and Xi Jinping will meet again in Beijing during the APEC summit. And I'm absolutely sure that there will be some very big surprises, both in political and strategic fields, and also in economics.
Michael Ben-Gad: The separate countries of the EU are desperate for Chinese assets to be, in essence, recycled. As well as Russia, the EU has a fairly large trade deficit with China. And so, the Chinese have lots of assets they era sitting on, close to $4 trillion worth and the EU is interested in having the Chinese invest not just in businesses, but in infrastructure as well, because the European governments font feel that they have the resources to do it themselves.
Russia-China trade has risen very rapidly, but from an extremely low base. There are obvious complementarities between the Russian and the Chinese economy. The Chinese economy produces low-cost high-quality manufactured goods. Russia produces lots of commodities. There is a long land border. So, it is, if anything, curious that the volume of trade isn’t much higher still.
To what extent the Russian-Chinese trade and economic ties can serve as a locomotive for the integration process in the vast Asia-Pacific?
Michael Ben-Gad: First of all, both Russia and China have territorial disputes with Japan. And I imagine that that might come up in some of the discussions. I think Russia, for its part, doesn’t really expect the sanctions from the EU to be lifted any time soon. So, it is only natural that they are going to look for trading partner further east. Again, both countries have various disputes with some of their neighbours and it is helpful for them that, for example, in the Security Council they back each other or veto resolutions that are aimed at either of them.
For example, China has been very quiet, as far as what Russia is doing in Ukraine. And I suspect that that will be reciprocated in terms of what China is trying to accomplish in the South China Sea or versus its territorial disputes with Japan.