China backs Putin's idea of developing Russia's Far East

Russia Looks to China for Economic Assistance

Chinese Vice Premier Wang Yang said on Saturday that Russia's push to revamp its run-down Far East region coincided with Beijing's strategy, backing President Vladimir Putin's drive for new sources of growth.

At the Eastern Economic Forum in the Pacific Port of Vladivostok on Friday, Putin promised favorable business conditions and state support to Asian and domestic investors willing to come to Russia's most remote land.

"The Far East development strategy coincides with China's strategy of north-east rebirth," Wang said. "(The) Russia-Chinese partnership will definitely bring generous fruits."

Economic relationship between China and Russia:

Putin's China Pivot Faces Trade, Market Test

But for Putin's campaign to attract Asian funds to Russia, timing may be his worst enemy: the slowdown in the Chinese economy poses risks.

Putin's turn to Asia comes at a time when relations with the West have hit their lowest since the Cold War, following Moscow's involvement in the Ukraine conflict.

Russia needs money badly - sanctions and falling oil prices have hit the economy hard, with gross domestic product expected to fall 3.3 percent this year after growing 0.6 percent in 2014. China's growth, meanwhile, is slowing and its stock market falling, forcing Beijing into rate cuts and a yuan devaluation to buttress the economy.

Ian Ivory, a partner at Golstblat BLP, said the Chinese slowdown will hardest affect emerging markets which are providers of raw materials.

"Russia is another classic example that will feel the pain, and China will be a further negative drag on the Russian economy," Ivory said in e-mailed comments.

Andrey Kuzyayev, a former head of overseas operations at Lukoil, Russia's No.2 oil producer, played down the worries, saying the development of the Far East was not a temporary whim, but a long-term goal for the country.

"We need to make up time we have lost," he said. "Cycles in any economy are the norm, not deviation. There will be a slowdown but obviously there will be acceleration later."

Chinese government's growth target is 7 percent this year, down from 7.4 percent in 2014 and the slowest in a quarter of a century.

Wang's address to the forum on Saturday was short and he left immediately afterwards, in the middle of the session, followed by Chinese officials, including Wang Yilin, chairman of the board at China National Petroleum Corporation.

"This was unexpected but this was okay, we managed," said Boris Titov, chairman of the Russian part of the China-Russia Friendship Committee for Peace and Development.

"The first session was delayed and they (the Chinese delegation) had already a briefing scheduled."

A CNPC official, who was accompanying Yilin but declined to give his name, said only: "The schedule has changed."

(Additional reporting by Denis Dyomkin; Editing by Lidia Kelly and Alison Williams)

Putin through the years:

Vladimir Putin
See Gallery
China backs Putin's idea of developing Russia's Far East
Russian President Vladimir Putin holds a glass of champagne after a state awards ceremony at the Kremlin in Moscow, on March 10, 2016. AFP PHOTO / POOL / PAVEL GOLOVKIN / AFP / POOL / PAVEL GOLOVKIN (Photo credit should read PAVEL GOLOVKIN/AFP/Getty Images)
MOSCOW, RUSSIA. MARCH 1, 2016. Russia's president Vladimir Putin at the 7th congress of the Chamber of Commerce and Industry of the Russian Federation (CCI). Mikhail Metzel/TASS (Photo by Mikhail Metzel\TASS via Getty Images)
Russian President Vladimir Putin (R) and Defence Minister Sergei Shoigu leave Moscow's Red Square on May 9, 2015 after the Victory Day military parade. Russian President Vladimir Putin presides over a huge Victory Day parade celebrating the 70th anniversary of the Soviet win over Nazi Germany, amid a Western boycott of the festivities over the Ukraine crisis. AFP PHOTO / KIRILL KUDRYAVTSEV (Photo credit should read KIRILL KUDRYAVTSEV/AFP/Getty Images)
Russian President Vladimir Putin (R) speaks with the leader of Georgia's breakaway province of South Ossetia Leonid Tibilov during a meeting at the Kremlin in Moscow on June 1, 2015. AFP PHOTO / POOL / IVAN SEKRETAREV (Photo credit should read IVAN SEKRETAREV/AFP/Getty Images)
BUDAPEST, HUNGARY - FEBRUARY 17: Russian President Vladimir Putin (C) looks on as Hungarian Prime Minister Viktor Orban kisses the hand of a member of the Russian delegation during a signing ceremony of several agreements between the two countries on February 17, 2015 in Budapest, Hungary. Putin is in Budapest on a one-day visit, his first visit to an EU-member country since he attended ceremonies marking the 70th anniversary of the D-Day invasions in France in June, 2014. (Photo by Sean Gallup/Getty Images)
Russian President Vladimir Putin (R) meets with Iraqi Prime Minister Haider al-Abadi at the Kremlin in Moscow on May 21, 2015. AFP PHOTO / POOL / KIRILL KUDRYAVTSEV (Photo credit should read KIRILL KUDRYAVTSEV/AFP/Getty Images)
SOCHI, RUSSIA - MARCH 16: Russia President Vladimir Putin waves during the Sochi 2014 Paralympic Winter Games Closing Ceremony at Fisht Olympic Stadium on March 16, 2014 in Sochi, Russia. (Photo by Dennis Grombkowski/Getty Images)
Russian President Vladimir Putin gestures as he speaks during a joint news conference with Japanese Prime Minister Shinzo Abe in Tokyo, Japan, December 16, 2016. REUTERS/Alexander Zemlianichenko/Pool

More on
Afghan artist paints Kabul's walls of war to help heal city
Austria says it and Germany will take refugees from Hungary
Cardin's opposition to Iran deal sets back White House hopes

Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.