Russia negotiating deals with Chinese companies as recession looms

Moscow is negotiating billions of dollars worth of deals with Chinese companies as the governments of Russia and China seek more settlements in roubles and yuan to sidestep the problem of the falling rouble amid a looming recession.

Moscow's city government was offering Dalian Wanda Group a site in the Russian capital where it could build 1 million square metres of property, said deputy mayor Marat Khusnullin, who estimates the investment will exceed US$2 billion.

The potential Wanda deal germinated in May, when mayor Sergey Sobyanin met Wanda chairman Wang Jianlin in Hong Kong, Khusnullin said. "We are happy with our negotiations with Wanda."

But Wanda wanted to finance the project in yuan and was unable to do so, he said.

Talks were being held between the Russian and Chinese governments to allow more settlement in yuan and roubles, Khusnullin said. "We hope in the near future there will be a new agreement between Russia and China."

The two countries pledged to settle more bilateral trade in both currencies and to enhance cooperation between Russian and Chinese banks, Russia's first deputy prime minister Igor Shuvalov said in September.