Infrastructure cooperation with Russia set to be enhanced

China and Russia are exploring options to enhance Chinese investment in big-ticket Russian infrastructure projects, along with steps to provide flexible financial support from lenders in both countries, government officials said.

Ling Ji, director-general of the department of Eurasian affairs at the Ministry of Commerce, said several new areas of cooperation have opened up in Russia as a result of its economic restructuring. Large-scale infrastructure projects, including energy and resource exploration, manufacturing, aviation , nuclear power and shipbuilding, offer the best potential due to their long-term and strategic significance, he said.

Russia has been contemplating steps to increase foreign investment in the country to boost trade and modernization and to find new business growth points.

Most of these steps are aimed at attracting investment from China and South Korea in programs meant to improve infrastructure facilities.

"Both countries are planning large-scale projects in the infrastructure sector, which marks a new era for bilateral economic cooperation," Ling said.

"The deal will ensure that Chinese investment in large-scale Russian infrastructure projects can be properly supported by the Russian government and various financial institutions," he said.

China's direct investment in Russia maintained fast growth in recent years and increased by 500 percent year-on-year to $4 billion in 2013.

Maxim Shereikin, deputy minister of Russia's Far East Development Ministry, said Russia has established a special economic zone in its Far Eastern region and is looking to step up cooperation with Chinese companies to develop the services, manufacturing and infrastructure sectors.

Shereikin said Chinese investors have mature experiences in building various large-scale infrastructure projects in Africa, South America and the United States.

"With sufficient policy and financial support from both sides, their investment and expertise will not only be used in the projects for the 2018 FIFA World Cup in Russia but also in the eastern part of Russia to further connect more potential market destinations in the Asia-Pacific region," he said.

To ensure balanced trade, China has already speeded up the construction of cross-border transportation infrastructure to further improve its logistics capabilities, including roads and bridges on cross-border rivers.

The Russian government has said that it will facilitate China's goods shipment using its railway networks and ports to reach different marketplaces.

Evgeny Gavrilenkov, chief economist of Sberbank of Russia, the country's largest commercial lender by assets, said Russia is taking several steps to diversify its economy and to offset the slowdown in economic growth.

"We expect to see more deals between the two governments to further expand local currency settlement for bilateral trade, cross-border investment and financing. It will strengthen bilateral exchanges," Gavrilenkov said.

In another development, Russia's central bank governor said on Tuesday that Russia and China were close to reaching an agree ment on conducting swap operations in roubles and yuan to enhance bilateral trade, Reuters reported on Tuesday.

"We are at a rather advanced stage of working through the questions about rouble-yuan swaps to facilitate trade finance," Russian central bank governor Elvira Nabiullina told journalists on the sidelines of a central bank conference in Russia's second-largest city of St. Petersburg.

"A meeting is planned in China next week, and we will continue to discuss (the matter)," she said.