China And Russia To Boost Bilateral Economic Cooperation In Energy, Transport, Far East Development

Russia and China will boost bilateral economic cooperation in the fields of energy, transportation, and development of the Far East, China’s Foreign Minister Wang Yi said on Sunday, TASS news agency reports.

The two nations are aiming to increase bilateral trade to $100 billion in 2015, in addition to signing agreements on the Silk Road Economic Belt (SREB) and the second gas pipeline leading to China, the so-called “western route.”

“This year, our practical cooperation will bring important results. For example, we have been working hard to bring the bilateral trade to $100 billion,” the Foreign Minister said. “We shall sign an agreement on the Silk Road Economic Belt, shall begin construction of the eastern line of the gas pipeline and shall sign an agreement on its western line.”

“We will develop and deepen our cooperation in the financial and banking areas, in the area of nuclear energy, oilfields,” Yi said, according to RT.

In 2014, bilateral trade between Russia and China grew by 6.8% to $95.28 billion.

“We shall also launch strategic cooperation in development of the Russian Far East and will improve the cooperation in high-speed railroads,” the foreign minister added.

China has been working intensively on a $242 billion (1.5 trillion yuan) high-speed railway to link Beijing and Moscow.

The railway will be 7,000 kilometers long and will cut the journey time between the two cities from five to ‘two days’.

Russia’s New High Speed Train (Source: business insider)

Russia and China are also currently involved in project to jointly develop a long-haul wide-body passenger aircraft.

The joint project could see $13 billion of investment, with both nations planning to invest $6.5 billion each.

The new plane is planned to undergo its first test flight in 2021 and  is expected to enter into production in 2025.

In May 2014, Russia’s energy giant Gazprom and China’s CNPC signed a $400 billion contract to supply 38 billion cubic meters of gas per year to China for 30 years via the Power of Siberia pipeline.

Last week Russian Deputy Prime Minister Arkady Dvorkovich said that Russia is considering the idea of granting Chinese Investors over 50 percent share in strategic oil and gas fields, except for offshore.

China and Russia recently switched to using their domestic currencies in trade with such financial tools as swaps and forwards as they seek to reduce the influence of the U.S. dollar.

China has set up bilateral currency swap lines with more than 20 countries and regions since 2009, including Switzerland, Brazil, Hong Kong, Indonesia, and South Korea.

The number of bilateral currency swap lines will increase as China, who is now advertising the Renminbi as the �?new world currency’, continues to ramp up its drive for the globalization of its currency.

In 2014, Russia and China were instrumental in establishing the $100 billion New Development Bank (NDB) — also known as the BRICs Bank — that will serve as a pool of money to help fund infrastructure projects in Russia, Brazil, India, China and South Africa, and will challenge the dominance of the Western-led World Bank and the IMF.