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Russia’s Far East Boasts Potential for Cooperation with China

At the 21st Regular Meeting between the Chinese Premier and Russian Prime Minister, Chinese Premier Li Keqiang and Russian Prime Minister Dmitry Medvedev signed over 20 cooperation documents covering a range of topics, including investment. Much of the discussion had to do with Russia’s Far East, which covers 36% of the country’s area, or 6 million square kilometres.

With a 4,000 kilometre border between China and Russia’s Far East, the former has found numerous avenues to increase investment and economic ties with the region, and China receives 15 million tons of crude oil per year from the Russia-China oil pipeline. Chinese investors have been notably active in Vladivostok, with one bank in the city stating that 1,000 Chinese investors had opened accounts in the branch in the past two years alone. Russia was listed as one of the top ten priority destinations for Chinese investment in 2014 by EY advisory services, and the scale of Chinese investments in the Far East, such as October’s US$11 billion (C$15 billion) agreement between Chinese investors and Russia’s Grand Baikal tour operator, reflects this.

China and Russia have been actively partnering with investments, with an up to US$100 million Russia-China Venture Fund established this November by the Russia-China Investment Fund and China’s Tus-Holdings, the latter of which is a shareholder in over 500 enterprises and has assets of over RMB100 million (C$19.8 billion). Earlier this year, an even larger investment of US$500 million by China CYTS Industrial Development was agreed on in June as part of an intended US$4 billion bilateral investment fund between China CYTS and Russia’s Rostec.

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