Bilateral ties between Russia and China will be high on the agenda at the 23rd St Petersburg International Economic Forum, which runs from June 6-8. This represents another chance to foster relations between these two great powers that cover vast swathes of the earth's surface and who seek to nurture areas of mutual economic and geopolitical interest.
Chinese President Xi Jinping is making a state visit to Russia from June 5-7, which includes attending the forum. The trip is part of the series of regular visits between the two countries' leaders, and this visit comes hard on the heels of Russian President Vladimir Putin’s stopover at the Second Belt and Road Forum for International Cooperation in Beijing, which was held two months ago, in April.
The urge for countries in the region to cooperate was a theme taken up by President Xi last September when addressing the plenary session of the Fourth Eastern Economic Forum in Vladivostok, Russia, who at the time called for regional members to actively align their development strategies, and work together for an open regional economy.
The annual business forum has been held in St Petersburg since 1997, and the number of attendees is expected to exceed 10,000. The main audience of the forum is heads of major Russian and foreign companies, heads of state and political leaders.
The key mission of the forum is to be a practical tool for business, helping overcome the barriers that divide Russia and other countries, both geographic and informational.
Barriers to trade are slowly being eroded. According to Xinhua, trade between Russia and China broke through the US$100 billion level in 2018.
With the vast distances that span the Eurasian continent in mind, panel discussions at the forum of particular interest to China includes one focused on the integration of transport infrastructure. Discussions will revolve around ways to fully realize the potential of trade, economic, and investment cooperation in a bid to reach a new level of production and business activity throughout the Eurasian space, and the prospects and key barriers for the development of transport infrastructure in the Shanghai Cooperation Organisation (SCO) region.
Another panel will look at ways to provide logistics services for the ever-expanding e-commerce sector that encompasses Asia, Russia and Europe. The total turnover of the global e-commerce market in 2018 exceeded US$2.8 trillion. In 2019, 1.9 billion people are projected to make at least one online purchase from one of the more than 24 million online stores, generating in total a flow of 28 billion parcels.
The panel programme notes that issues surrounding quality and prompt delivery of these increasing volumes remain critical. In order to cope with the increasing parcel flow, the main transport corridors need to be expanded and revised, including the global logistics corridor of the Belt and Road initiative.
Pent-up demand from European and Asian consumers will only strengthen the current trend. Russia occupies a strategically important geographical position on the China–Europe–China goods movement route. At the same time, the development of the country's transit potential will help support and boost the export flow of domestic goods to international markets.
The panel will look at how Russian transport companies are positioning themselves to compete for market share in online trade transit, what foremost tasks must be fulfilled to enhance the country’s transit appeal, and what are the most urgent regulatory initiatives that should be implemented.
In the banking sphere, a panel will discuss new opportunities for interaction in industrial and financial spheres in the context of the Russian-Chinese energy cooperation. Russia's vast reserves of energy are much sought after by Chinese consumers, so these conversations will be a key component of the forum.
PAO Rosneft and the China National Petroleum Corporation (CNPC), with the support of the Roscongress Foundation, have organized the Second Russian-Chinese Energy Business Forum at the SPIEF. Key aims include developing a dialogue between Russia and China in the energy sector, to help increase efficiency, expand the portfolio of joint projects, and ultimately attract investment.
The two standout examples of Russia-China energy links are Yamal LNG, and the Power of Siberia Pipeline.
In February, Yamal LNG announced that it had shipped its ten millionth ton of LNG since the start-up of Train 1 in December 2017.
Yamal LNG shareholders are PAO NOVATEK (50.1%), Total (20%), China National Petroleum Corp (20%), and the Silk Road Fund (9.9%)
Meanwhile, gas deliveries to China from Gazprom are scheduled to begin in December via the Power of Siberia gas pipeline.
In May 2014, Gazprom and China National Petroleum Corporation signed a thirty-year gas sales agreement. The agreement provides for Russian gas deliveries to China amounting to 38 billion cubic metres per year.
In September 2014, Gazprom began the construction of Power of Siberia’s first section, running 2,200 kilometres from the Chayandinskoye field (Yakutia) to Blagoveshchensk on the Chinese border.
The second phase of the project will include the construction of a section stretching for about 800 kilometres from the Kovyktinskoye field (Irkutsk Region) to the Chayandinskoye field. The third stage provides for expanding gas transmission capacities between the Chayandinskoye field and Blagoveshchensk.
Other panels at the St Petersburg meeting will look at what further steps should be taken to achieve the goal of doubling trade turnover, and how ambitious plans to step up direct Chinese investment in the Russian economy are progressing.