China-Russia ties can reduce dependence on US

Source:Global Times Published: 2018/7/23 23:13:40

Sergey Glazyev Photo: Courtesy of Chongyang Institute for Financial Studies

Editor's Note:

The world economy is gradually recovering but the US is causing uncertainty by acting aggressively toward its trade partners all over the world. Against this backdrop, before China, Russia and other BRICS members gather in Johannesburg, South Africa from Wednesday to Friday, the fourth China-Russia Economy Dialogue was held in Beijing by the Chongyang Institute for Financial Studies at Renmin University of China on July 15 and 16. On the sidelines of the conference, Bai Yunyi, a reporter with the Global Times (GT) interviewed Sergey Glazyev (Glazyev), a counselor to President of the Russian Federation Vladimir Putin, to seek his opinions on bilateral trade potential and how to deal with US trade hostility.

GT: The US has recently imposed tariffs on goods from China, Russia and many other countries. What will be the outcome of this trade tension? Could it lead to a global recession or systemic risk in global free trade?

Glazyev: The trade tension is partly due to stagnation in Western economies, which are now in very bad shape. A lot of money is used for speculation and is undermining the stability of financial sectors.

The US wants to maintain its leading position by using protectionism. But the only result will be an increase in trade between Russia, China, India and other countries. If we can enhance cooperation within the Shanghai Cooperation Organisation or the BRICS and stop relying on the dollar as an international currency, the US pressure will fall away. 

GT: The trade volume between China and Russia is expected to reach $100 billion this year, which would be a landmark event for the two countries' economic cooperation. What would be the next goal for bilateral trade after that?

Glazyev: Perhaps 200 billion dollars? But the most important thing is increasing cooperation between our countries, because trade is only the first step in an international partnership.

We have to move to a deeper partnership. We should promote cooperation between our companies, the creation of large consortiums, and the establishment of research and development institutions, especially in the aviation industry. Trade is just what you see on the surface. If there is no cooperation or deeper connections between our companies, the trade will be vulnerable.

GT: Regarding economic development in Russia's Far East, which sectors could be fruitful for Sino-Russian cooperation?

Glazyev: We already have strong cooperation in those areas that are most easy and attractive for mutual trade, like timber exports, raw materials, gold, oil and gas. What we need is more processing. We need to trade higher value-added goods. So we are always trying to attract Chinese investors in order to produce high value-added goods together. Russia can supply the companies with electricity, land and raw materials.

The second point is development of high-tech sectors, especially the shipbuilding industry. But this requires more investors for it to be modernized. There is clear demand for new logistics centers and seaports.

GT: We hear there is some skepticism about China's influence in the Far East. Does Russia worry about China's presence in the region?

Glazyev: Well, there have been some misunderstandings, especially during previous periods. In order to avoid this, we need more trust and more contact between our people. This requires transport infrastructure, educational projects, and media efforts to explain the positive examples of our cooperation. I think all the problems are only temporary.

Now we have a huge flow of foreign businessmen and tourists into Russia. But at the same time, as many as 2 million local people have left the Far East in the past two decades. If millions of Chinese people came to Lake Baikal, our tourist infrastructure would be very limited, and it would create a lot of social pressure. But if we build more hotels, more modern tourist services, good restaurants and good transportation facilities, there would be advantages for both sides. We can see what happens in Hainan, for example. Who is afraid of Russian tourists in Hainan? Nobody. They are welcomed.

GT: Are there any areas that are closed to Chinese companies who want to operate in the Far East?

Glazyev: We have general regulations that are the same for all countries. There is nothing specific concerning China in those restrictions and limitations. For instance, we have administrative restrictions on fishing, but it's not directed against China. We have to maintain our resources in fishing like all other countries do. We have clear and open regulations.

Another example is the mining industry. Mining firms need a license and to get a license you need a Russian partner, especially if it's a strategic deposit. But this is a general regulation for companies from all over the world.

GT: The US and EU still have sanctions against Russia in place. Given the current situation, what will the Russian government do to boost the domestic economy?

Glazyev: We are still trying to explain to our US colleagues that sanctions are not a proper language. We can sit down together to look at the problems and the measures taken by the Russian government are very balanced and not aggressive. We are trying to show our Western partners that if they want to solve certain problems in international relations, diplomatic methods should be used rather than measures like sanctions.

At the same time, if US aggression against Russia continues, we are ready to move away from the dollar as the world's main currency, because sanctions make the dollar a very toxic currency. Even foreign companies are suffering threats from the US administration.

So if the US keeps contradicting international law and the WTO's norms, the first measure we would have to take together with China and other countries who are suffering from US aggression would be to get rid of the dollar as the key international currency.

GT: Do you think the sanctions could become softer in the short or medium term?

Glazyev: I don't think so, because in the US we see a growing aggression against Russia. It is because some Americans don't understand the reality. They want to maintain their hegemony. They want to be the superpower that dictates to everybody. They just don't see the new reality: The world is changing and the US is losing its leading role. It has lost its economic superiority in the trade of oil, raw materials and even in high-tech products. 

GT: What do you think of South Korea's efforts to push forward economic integration in Northeast Asia, such as connecting the Korean Peninsula through railways and pipelines to reach out directly to Russia?

Glazyev: The feasibility depends on the political situation in this region, because I think nobody will invest a lot of money in railways and pipelines if there is still a threat of war.

But the US is preventing us from sitting together and formulating proposals. They are playing a game here, because they're not afraid of there being a war in this region; they might even want it. The US is playing with the Japanese position and the South Korean position.

But if the political crisis is solved, I don't see any reason why the links would not be feasible. The only question is who will take the economic risks? I think first of all South Korea should take the risk because it is they who need these links the most. Then, for North Korea it would also be a good step, because more economic cooperation would bring peace and development.


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