China’s US$25b loan deal for Russia
Print Edition
CHINA and Russia yesterday signed a US$25 billion deal to boost Chinese lending to Russian firms and a host of other economic cooperation accords.
President Xi Jinping and Russian leader Vladimir Putin hailed their countries’ improving relationship after Kremlin talks and a signing ceremony on the eve of a military parade marking the end of World War II in Europe.
Xi is among about 30 foreign dignitaries attending the anniversary events in Moscow.
Western leaders have opted not to attend the event as they are locked in a bitter standoff with Russia over the Ukraine crisis, but German Chancellor Angela Merkel will fly in tomorrow for a wreath-laying ceremony and talks with Putin.
China and Russia are due to hold joint naval exercises next week in the eastern Mediterranean and Chinese soldiers are taking part in today’s military parade in Moscow.
“Today, China is our strategic and key partner,” Putin said after he and Xi presided over the signing ceremony in front of rows of Chinese and Russian officials in the Kremlin.
“President Putin and I held detailed and friendly talks,” Xi said, adding that they agreed on the need for “further broadening of Russian and Chinese ties.”
Xi invited the Russian leader to attend war commemorations in China on September 3. Putin accepted, saying their countries had suffered most in the war.
The Chinese president said the talks had shown Beijing and Moscow shared the same views on many global problems.
Both leaders said it was necessary to guard against a resurgence of fascism and attempts to rewrite history, echoing previous comments by Putin criticizing the West and Ukraine for underestimating the Soviet role in ending the war.
“We are talking about the prospect of entering a new level of partnership with a shared economic space on the whole Eurasian continent,” Putin said.
The two sides signed memorandums on deals including Chinese investment in a high-speed rail line linking Moscow and the Volga city of Kazan.
“The Chinese side agreed to finance this project to the tune of around 300 billion rubles (US$5.92 billion),” Putin said.
There was also agreement on creating a joint Chinese-Russian company that could acquire 100 of Russia’s Sukhoi Superjet 100 jumbo jets over three years in a deal worth around US$3 billion and lease them out in Asia.
China and Russia last May agreed a US$400 billion deal for Russia to supply China with 38 billion cubic meters of gas annually from 2018 for 30 years.
Building on that deal, natural gas producer Gazprom yesterday signed a deal with China National Petroleum Corp on the main terms of providing supplies via what is know as the Western route.
An agreement was also signed to boost Chinese lending to Russian firms, some of which have been hit badly by an economic crisis aggravated by Western sanctions and weaker global oil prices.
Kirill Dmitriev, chief executive officer of the Russian Direct Investment Fund, said Russian companies could receive up to US$25 billion over the next three years.
The sides agreed to launch a US$2 billion investment fund targeting agricultural projects and a deal for Russia’s Sberbank to open a 6 billion yuan (US$966 million) credit line with China Development Bank.
Putin said the level of Chinese investment would be around 300 billion rubles.
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