Vladimir Yakunin, former president of Russian Railways: Russia faces great development opportunities in the field of energy and agriculture after integrating into “Belt and Road”.
Yesterday, President Vladimir Putin of the Russian Federation attended the opening ceremony of the Belt and Road Forum for International Cooperation (BRF) and delivered a speech. As early as May 2015, China and Russia reached strategic consensus on the docking of the “Belt and Road” construction and the Eurasia Economic Union (EAEU).
With the “Belt and Road” initiative, China and Russia have extensive cooperation in energy supply and other areas. According to the statistics of MOFCOM, import and export volume between China and Russia reached 69.525 billion US dollars in 2016; China has been Russia’s largest trade partner for six consecutive years.
How will Russia integrate into the “Belt and Road” construction in the future? What are the key areas of Sino-Russian cooperation? In this regard, the National Business Daily (NBD) interviewed Vladimir Yakunin, founder of The ‘Dialogue of Civilizations Research Institute’ and former president of Russian Railways.
Talking about the “Belt and Road”, the effect on global projects shows exponential growth:
NBD: Since the “Belt and Road” initiative was proposed in 2013, China and Russia have maintained a good momentum in economic and trade development and carried out cooperation in the transport, infrastructure construction and other fields. How do you understand the “Belt and Road” initiative?
Yakunin: I think the “Belt and Road” initiative is not only convenient for transportation, but also conducive to all integrated development. At present, this initiative has covered most of the Eurasian region, and involves many developing countries and some developed economies.
To a greater extent, the effect of the “Belt and Road” initiative on global projects will increase exponentially and will have a significant impact on all the new economic sectors of the countries concerned.
For example, natural gas pipelines between Turkmenistan and China will also be part of a “Belt and Road” initiative; so is the railway between China, Kyrgyzstan and Uzbekistan.
NBD: How will Russia integrate into the “Belt and Road” initiative?
Yakunin: Russia is already an active participant in the “Belt and Road” initiative. In the field of railway facilities, multiple projects, including cross-Siberian railway and the main line from Lake Baikal to Amur River are either under construction or in the phase of planning. These are the shortest routes from Asia to Europe.
Regarding transport, there are significant differences between land transport and maritime transport, especially in terms of time. So, the main line from Lake Baikal to the Amur River will be under modernization retrofit in the near future, utilizing railway transport all the way. It will be mainly connected to the eastern part of Russia and its ports in the European part. Through modernization, it will also facilitate economic and trade relations between China and Russia.
Talking about the economic and trade cooperation, here will be great development potential in the energy and other areas:
NBD: With the influence of the “Belt and Road” initiative, which areas does the economic and trade cooperation between China and Russia focus on?
Yakunin: I would like to emphasize that the development of Russia to the east is not a sudden thing. In 2014, China’s investment in Russia was about twice as much as that in 2013, so China was Russia’s second largest trading partner. Obviously, such a leap cannot happen suddenly. Over the years, economic and trade cooperation between China and Russia has been deepening.
The economic and trade cooperation between Russia and China is first reflected in the field of energy, with a lot of success stories before. In the field of agriculture, there is also a great opportunity for development. Recently, China and Russia have jointly set up agricultural investment funds and Far East Agricultural Development Fund, which will contribute to the cooperation in agriculture between China and Russia.
As to infrastructure construction, China has invested in the construction of a railway bridge on the Amur River. Russia has long been interested in high-speed train rail projects.
Through development over many years, especially with the influence of the “Belt and Road” initiative, Russia has become a reliable partner for China in the field of technologies, transport and energy supply.
NBD: Just now you mentioned that the economic and trade cooperation between China and Russia has good foundations. So, what are the convenient or favorable policies that Chinese companies which invest in Russia will benefit from?
Yakunin: The Russian government will focus on simplifying procedures and reforming the key economic processes, providing more opportunities for interested companies through its best efforts. We can see that the Russian government is trying to eliminate the administrative obstacles to the growth and development of investment enterprises and raise the level of information perception for potential investors.
Previously, Russia relied heavily on oil exports, and it was imperative to develop economic and trade exchanges with other countries in other areas. For cooperation with China, Russia is trying to establish cooperation in the field of innovation, particularly in the areas of transport, educational institutions and non-commercial organizations.
I am pleased to see that the partnership between the Russian office and the Soong Ching Ling Foundation last year was considered a valid example of non-commercial organizations’ effective cooperation from both parties and was incorporated into the model list of Sino-Russian cooperation. In the future, the innovation in various fields between China and Russia will further strengthen.
NBD: In terms of establishing various funds to support business initiatives, China and Russia have a lot of cooperation, especially the establishment of various foundations. How to provide fund support for Chinese companies investing in Russia?
Yakunin: Any cooperation is initially aimed at mutual benefit. If you do not see the opportunity to benefit from future cooperation, neither side will participate in the project. It is hard to say how to get a special condition for participating in the project.
First of all, many agreements are signed in the form of tender, which initially does not include any form of clear terms. At the same time, when a project appears in the bidding competition, one has already learned some profit margins and other types of profits, including intangible profits.
I want to say that I believe Chinese companies were and will be welcomed as investors by the Russian government and Russian people. I also believe that the Russian government will do its best to guarantee that the investors’ projects will be commercially effective and to strengthen the relations between our two countries through investment and economic and trade cooperation.
