China’s recent decision to refuse to cooperate with the banks of Russia came as a surprise to the Russians. Although four days ago, Russian President Vladimir Putin and Chinese President XI Jinping at the Eastern economic forum (WEF) recorded the growth of trade turnover between the countries to a record $ 100 billion. Head of the School of Oriental studies of the HSE Alexey Maslov in an interview for “URA.RU” explain why Russia should not delude ourselves about the friendliness of China, how not to be a victim of a pragmatic Chinese businessmen and why their products will soon become cheaper.
How can you explain the motivation of banks in China when they stopped holding in the credit institution?
— We are talking about trade or investment operations. If in China a person wants to invest in Russia or to buy something, he takes out a Bank loan and insures it in Chinese import-Export-investment Agency. In early September the Agency gave a negative Outlook for investment in Russia. This is not to say that to invest and to work with Russian business. It is possible — but only at your own risk. And in China do not.
— Why such a prediction?
— First of all, China is carefully studying the regional budgets. On some key regions of the Far East’s debt to the Central budget is more than 70% and some 100%. For China this is a serious Wake-up call.
Second, China does not see much interest in investing, because it is not very clear the further fate of the Russian economy. Plus, judging by the Chinese economic press in the last days, much attention is paid to the new package of US sanctions against Russia, which, in Chinese opinion, can greatly weaken the ruble and the Russian economy will be unpredictable. In reality
China is a pragmatic state which does not look at the Declaration of friendship and the real situation.
— What about your promise to increase trade with China to a record 100 billion?
— 100 billion dollars we receive through direct trade, that is, by increasing the sale of oil and gas. It’s just trade — buy-sell. [Chinese] banks will not transfer money for investment projects, and this is precisely Russia and the need for the development of a private sector industry. Putin on the WEF has been said about the investment, about specific things, and the Chinese side about global things. Therefore, the majority of papers signed by VEF is not a contracts and letters of intent that do not entail direct financial obligations. So many papers were signed and the impression that everything is moving forward.
— That is, China has no interest in developing relations with Russia?
— There is a fundamental difference of interests. China wants Russia to two things — the energy purchase and use of Russian Railways to transport their goods to Europe. In Russia, however, the main interest is to obtain investments for reconstruction of its industry. China is interesting, since it is easier to sell us their products, than help to create it.
Many Russian businessmen are fascinated by the slogans, which broadcast Russia and China, but do not understand the real situation.
The business thinks that the slogan “Friendship” automatically provides a good investment.
And without exception?
— There is polymotive options, such as joint ventures, but while in real life it doesn’t work. Major — we have energy projects, such as Yamal LNG, with the volume from one to 1.9 billion dollars, Arctic-2 is the same project to supply gas to China. Yamal LNG is already running, Arctic-2 will soon start. The rest is in the process of discussion or in development. For two large countries it is the small things.
— What to expect from the prices for Chinese goods with a new package of anti-Russian sanctions?
— Because of changes in the tripartite of the ruble-yuan-dollar, most likely, will rise in price. That is due to the fall of the ruble Chinese goods automatically more expensive regardless of political decisions. Some products is, oddly enough, may be cheaper or sold at cost, because China can supply a range of products in the United States. Today, this “plugging” of goods in China nearly 60 billion dollars. And if the Americans will continue to promote tariff machine, up to $ 200 billion. These products can theoretically go to Russia. Thus, the mass of commodities can be more, and the money is cheaper.
But we must consider the fact that the US is further from China than Russia, but because of the optimized forms of supply, very cheap tariff goods from China may be cheaper than in Russia. But household goods — fabrics, clothes, cheap equipment, no noticeable jump should not be.
— The impression is that Russia and China are willing to cooperate. Is it possible that the US will tell China to cooperate with them against Russia?
For US China is a priority partner and it will be the last to try to reach an agreement with America world, so China does not want to promote “the Russian card”. There is another danger that Russia will become a bargaining chip when the United States begins to put pressure on China “you give up the coveted support of Russia, and we begin somehow to adjust tariffs”. Because, roughly speaking, to push China very hard. But Russia, with its economy very vulnerable.
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