Fosun Group is one of several Chinese companies that have invested in Russia, having established a branch in Moscow in October 2015. A senior manager at the conglomerate had the opportunity this week to ask Russian President Vladimir Putin “which direction of Russia’s economic relationships would be most significant in the long run” when it comes to Asian partners.
Despite Russia’s diplomatic and commercial turn to Asia since 2014, when European and North American countries imposed sanctions on it over its annexation of Crimea, trade turnover with China has actually declined.
But it remains significant, Putin told the audience on Wednesday at VTB Capital’s investment forum in Moscow, standing at $63.5 billion. Moreover, trade with other countries in the region, such as Vietnam, have increased over the past two years.
Through a translator, Putin said: “What’s particularly gratifying is the diversification of our relations with Asia-Pacific countries – with Japan, India, China, South Korea and other states.” Putin pointed to cross-border investments in areas including machine engineering, space travel and nuclear power.
He spoke of Asian countries building relations with the Eurasian Economic Union, which includes Belarus, Kazakhstan and other former Soviet states.
He also cited a recent free-trade agreement with Vietnam and the rising importance of China’s 'One Belt, One Road' infrastructure initiative as examples of the changes that were already occuring.
“All that makes us very optimistic,” noted Putin. Asian and Latin American countries account for 28% of Russia’s economic relationships, he added, “but we have a good tendency for growth.”
Questions from Chinese executives expressed commitment to Russia but a desire for clarity, particularly around the extent to which Russia will prioritise their concerns as business partners.
The Chinese head of the Russian branch of smartphone manufactuer LeEco, speaking in fluent Russian, asked about video content for smartphones and related technology.
“There are certain limits to the capital participation in this segment of the market,” this executive noted. His firm would like to see opportunities to cooperate in the development of Russian TV shows, for example.
Putin recognised Chinese cultural achievements but made clear that he would preserve Russian control over its cultural content.
“We will back the efforts of our Chinese, American and European colleagues,” the president said, “but as regards diversity, which allows us to preserve our cultural and national identity, we should support local producers of national content.”
Putin added that Russia would welcome investment, as long as it supported “national content”.