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Trade with Russia 'needs shot in arm'

Updated: 2011-12-23 09:39

By Zhao Shengnan (China Daily)

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Ambassador: More efforts needed to reach target of $200b by 2020

BEIJING - China-Russia trade increased this year, but the rate of growth was not high enough to realize the two nations' target of boosting bilateral trade to $200 billion by 2020, said Russia's ambassador to China.

China's trade with Russia, is expected to reach $78 billion, far less than that with Europe and the United States, Ambassador Sergey Razov said on Thursday.

Bilateral trade increased from about $8 billion in 2000 to nearly $56 billion in 2010, and China is now Russia's biggest trading partner.

During President Hu Jintao's visit to Russia in June, the two neighbors set targets for bilateral trade of $100 billion by 2015 and $200 billion by 2020.

China's investment only accounts for 1 percent of total foreign investment in Russia this year, said Razov, adding that obstacles to investment come from both sides.

Russia's environment for foreign investment is getting better, but improvements are still needed to the nation's laws and regulations in this field, while the global recession affected its economy, especially in 2008 and 2009, he said.

"Russia's GDP growth, about 4.5 percent this year, is much better than our expectations and that of Europe, but still, about $80 billion of promised foreign investment in Russia failed to materialize this year."

Meanwhile, Chinese investors tend to focus on businesses they are familiar with, such as primary goods and energy transportation, he said.

Groundbreaking achievements in energy cooperation have been made in recent years, including an oil pipeline linking Russia's Far East and Northeast China that became operational at the beginning of 2011.

It is expected to transport 15 million tons of crude oil annually from Russia to China from 2011 to 2030.

However, the two countries have failed to reach a final agreement on a natural gas supply deal due to differences over pricing.

The negotiations are proceeding, said Razov, adding that each side must be very careful about such a big deal. The two countries' leaders highly value energy cooperation, he pointed out.

"China-Russia relations are in the best period ever, and the countries' top leaders gave political support to this important bilateral project," he said.

Russia is the world's biggest natural gas producer, and China is becoming a major energy consumer.

Besides energy cooperation, there is great potential for cooperation in fields like aeronautics and space technology, said Xing Guangcheng, an expert on Russian studies at the Chinese Academy of Social Sciences.

"Russia's accession to the World Trade Organization this month definitely helps to remove some obstacles for foreign investment, and will boost its trade with China," Cheng said.

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