vlad.tribnet.com / Issue #544 / Business / Reading article...

Russia and China signed 10 investment agreements with a total worth of over $1 billion during the November 9-13 investment forum in Beijing, Khabarovsk Governor Viktor Ishayev told a press conference in Khabarovsk on Monday. These agreements anticipate cooperation in the oil and gas industries, the power industry, banking, and aluminum production.

China’s booming economy provides an enormous market for Russia and bilateral trade is mostly likely to focus on pipeline transport, development of ports and airports, agriculture, natural resource processing, and environmental protection projects, Ishayev stated, a press statement from his office reported.

However, Ishayev noted that only five out of the 13 projects considered at the first Russian-Chinese forum in Khabarovsk in 2004 had been carried out. The investment reached only $4.3 million of the projected sum of $800 million.

According to Ishayev, Chinese businesses did not proceed with their Russian investments since they had not received from Russia ‘exclusive’ proposals for natural resource production. Besides this, Russian environmental regulations, red tape documentation procedures and high criminal involvement blocked the investment process.

Ishayev lamented that natural resources account for 70 percent of trade with China, while the share of high-tech goods supplied to China is just over 2 percent. At the same time 70 percent of China's exports to Russia are high-tech products. The total trade of the Khabarovsky region with China reaches $4 billion annually.

The total trade between the Primorsky region and China accounted to $1.42 billion in 2005.

Last year, Russia was China's eighth largest trading partner after the United States, Japan, South Korea, Germany, Hong Kong, Singapore and Malaysia. Trade between the two countries exceeded $29 billion.