China, Russia pave even stronger ‘financial track’ with a new deal enhancing trade vitality

China and Russia have signed audit and supervision deals to facilitate bilateral capital flows and bond issuance, in a prelude to a two-day annual leader’s meeting to discuss bilateral cooperation against the backdrop of American sanctions.

On Monday, the neighbours signed a memorandum of understanding on aligning the process of audit monitoring while sharing more experience in public finance, taxing and budgeting, according to China’s Ministry of Finance.

Chinese Premier Li Qiang was scheduled to meet with his Russian counterpart, Prime Minister Mikhail Mishustin, on Tuesday and Wednesday in Beijing. It is Mishustin’s second visit to China this year, following one in May. And it came only two months after Russian President Vladimir Putin participated in a belt and road summit in Beijing.
 
As part of China and Russia’s “no-limits” strategic partnership, Li and Mishustin were set to “exchange views on bilateral relations, pragmatic cooperation and mutual concerns”, according to a statement by China’s foreign ministry.

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At Monday’s signing, Chinese finance minister Lan Foan talked with his Russian counterpart, Anton Siluanov, about tapping into the cross-border financial potential between their countries.

“The coordination of Sino-Russian cooperation in multipronged formats once again confirms our mutual interest in strengthening cooperation on the financial track,” Siluanov was quoted as saying by Russian state news agency Tass.

And Siluanov said Russia and China should enhance financial cooperation with their fellow members of Brics – an association of five emerging economies: Brazil, Russia, India, China and South Africa.

In a separate meeting on Monday, Vice-Premier He Lifeng and Russian Deputy Prime Minister Dmitry Chernyshenko pledged to push forward key projects and expand areas of cooperation.

He Lifeng hailed the “strong vitality” of bilateral cooperation in finance, production capacity, science and technology, communications, customs, environmental protection and urban construction.

“We’ll effectively solve the difficulties and problems encountered in our cooperation in a timely manner and create a better cooperation environment,” he was quoted by Xinhua as saying.
The two also “reached a variety of consensus and results”, though no details were provided.

Dong Jinyue, a senior China economist at BBVA Research, said that the financial cooperation between both countries is mutually beneficial.

“For Russia, [there is] some immediate relief in its economic and financial malaise from when the US froze Russian assets … Russia can always use [the yuan] to settle its foreign trade payments and to ensure the safety of its foreign reserves by using [the yuan] as its reserve currency,” she explained.

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While for China, Dong added, financial cooperation can help promote the yuan’s internationalisation by using it in trade settlements, and from being the main reserve currency of Russia.

Official figures from China’s customs authorities showed that bilateral trade between the two countries grew 26.7 per cent, year on year, to US$218.2 billion between January and November.
China is now Russia’s biggest energy buyer.

Speaking at an annual news conference last week, Putin estimated that the value of trade with China could reach a record US$230 billion this year.

Source:South China Morning Post