Russia’s Vladimir Putin points to US$20 billion worth of deals as evidence of close ties with China

Russia’s alliance with China is not just for show and US$20 billion worth of deals signed between the two nations is proof of that, Vladimir Putin said on Friday.

“As far as our relations with China are concerned, these are not words, these are concrete policies,” the Russian president said at the St Petersburg International Economic Forum in response to a question on whether ties between Moscow and Beijing were as close as they had been presented.

During Chinese President Xi Jinping’s state visit to Russia, representatives from the two countries have signed deals in the fields of nuclear power, natural gas, cars, advanced technology, e-commerce and 5G communications amid a shared and growing rivalry with the United States.

In an earlier joint press statement the two leaders spoke of their desire to deepen their “unprecedented partnership” for “mutual advantage”.

In his speech to the forum, which according to Russia media was attended by 17,000 people, Xi said the two sides should continue to cooperate for economic benefit.

“I would like to work with President Putin … to create a better business environment between the two countries and to provide more comprehensive policy support,” he said.

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Putin emphasised his personal ties with Xi, saying there was desire on both sides to work as strategic partners to provide global stability, and that the prospects were good despite weaker investment sentiment in certain industries in Russia.

According to figures from Russia’s central bank, China’s direct investment in Russia fell by 24 per cent in the first half of last year.

Putin said, however, that the two countries had increased the scope of their investment deals to the fields of technology, aviation, nuclear power and space.

“Energy is the largest component of our cooperation,” he said.

As China continues to fight a punishing trade war with the US, officials in Beijing have been keen to boost ties with Russia, while Moscow, under the pressure of US and European Union sanctions imposed against it for annexing Crimea in 2014, has sought to do the same.

“We are not creating a military alliance with China but we are strategic allies,” Putin said. “We are not working against anyone.”

That alliance was clear in several of the panel meetings held during the St Petersburg forum, with representatives of China’s state firms pledging their support for increased investment in Russia’s economy, despite its stalled growth and weak consumer demand.

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“We are willing to work with Russian firms … on an open and mutually beneficial basis,” Zhu Bexin, president of China Chengtong Holdings Group, an asset management and investment firm, said at a meeting on Friday.

Hou Qijun, deputy general manager of China National Petroleum Corp, the country’s largest state-owned oil and gas company, expressed a similar sentiment a day earlier at a panel discussion on energy.

“Russia and China’s cooperation in the oil and gas sector is led by the heads of our two countries,” he said. “Our government bodies and agencies meet frequently, and work together on solving difficulties and problems.

Zhang Kaiyong, a director of Shaanxi Yanchang Petroleum Group, which is owned by the Shaanxi provincial government, said his company planned to work more closely with Russia on liquefied natural gas projects, as well as on other schemes in the fields of oil, gas and coal.

Washington has frequently cited China’s state-owned enterprises as examples of Beijing’s unfair trade practices because they have easy access to bank loans and subsidies, which the US says creates price distortions in global markets and makes its goods less competitive.