Russia, China to show united front at economic forum

Chinese President Xi Jinping and Russian President Vladimir Putin at the St Petersburg International Economic Forum in St Petersburg, Russia, on June 6, 2019.
Chinese President Xi Jinping and Russian President Vladimir Putin at the St Petersburg International Economic Forum in St Petersburg, Russia, on June 6, 2019.PHOTO: REUTERS

MOSCOW (AFP) - Chinese President Xi Jinping appears on Friday (June 7) as guest of honour at Russia's showcase economic forum, as the two neighbours present a united front in the face of shared troubles with the United States.

Mr Xi arrived in Moscow on Wednesday for a three-day visit with Mr Vladimir Putin, and described the Russian leader as his "best friend" during a cosy meeting at the Kremlin.

To end the trip, Mr Xi and his host will appear at a plenary session of the annual St Petersburg Economic Forum, which Moscow hopes will woo foreign investors despite an uncertain business climate.

Mr Xi is set to present China's ideas on sustainable development and multilateral cooperation, Beijing said ahead of his appearance.

The 2019 forum "will illustrate very clearly just how bi-polar the world has become," said Mr Chris Weafer, a senior partner at the Macro Advisory consulting firm.

"In the same week that President (Donald) Trump will be having tea with the Queen in London, President Putin will be hosting President Xi in St Petersburg."

The trip comes five years after Moscow's annexation of Ukraine's Crimea peninsula led to a serious rift with the West and a move towards Russia's neighbour to the east.

Beijing is meanwhile locked in a trade war with the US.

Moscow and Beijing's economic ties have grown in recent years, though they remain heavily weighted in favour of China, which dwarfs Russia in economic and demographic terms.

Mr Xi's visit has already seen the signing of dozens of commercial contracts in e-commerce, telecoms, gas and other areas.

While this is the Chinese leader's first appearance at the economic forum, where he heads a 1,000-strong delegation, he and Mr Putin have met regularly in recent years.

AN UNEVEN RELATIONSHIP

Ahead of Mr Xi's visit, Kremlin advisor Yury Ushakov described China as "Russia's most important economic partner".

 
 
 

The partnership is yielding increasing trade, which grew by 25 per cent in 2018 to hit a record US$108 billion (S$147 billion), he said.

But despite political tensions and repeated rounds of sanctions over Moscow's actions in Ukraine, the European Union remains by far the biggest foreign investor in Russia - well ahead of China and the US.

"China is taking time to ramp up investments in Russia," said Mr Charles Robertson, chief economist at Renaissance Capital.

"It wants to feel secure about the long term, it doesn't want to rush into it."

He predicted China would make big investments over the next three to five years, possibly even sooner, as Russia plays an important role in Chinese projects along Beijing's New Silk Road.

Among major Russian-Chinese collaborations is the Power of Siberia gas pipeline, a joint project between Gazprom and China's CNPC, which is set to deliver Russian gas to China from later this year.

CNPC and the Silk Road Fund also have a 29.9 per cent stake in the Yamal LNG liquefied natural gas megaproject run by Russia's Novatek in Arctic Siberia.

But analysts stress the limits of this alliance.

"Asymmetries are present across the board but are especially visible in the economic field," according to a report published last month by the Institute for International Political Studies (ISPI) in Milan.

Russia's gross domestic product is today no bigger than that of China's Guangdong province, and its defence spending is a third of that of its neighbour.

"It is hard not to see who has the upper hand in this relationship," the ISPI report said.