Russian Ambassador to China: 2018 Will Be Year of Unstoppable Dragon-Bear Alliance

We invite you to watch the big interview with Russia's ambassador to China, Andrey Denisov. He summed up Sino-Russian relations for 2017.

- Hello, Mr. Ambassador!

- Good afternoon.

- Thank you for finding the time for this interview. This year has been very productive in terms of Sino-Russian relations. How would you sum them up for 2017?

- First of all, thank you for visiting our embassy. This meeting has become a tradition. We make an effort to organize it at the end of each year. And every year, at least in recent years, we can say the most important thing, which is that our bilateral relations, Sino-Russian relations, continue to improve.

 

This trend continued in 2017 as well. We held five meetings at the highest level, in fact, they were five large-scale, full format meetings conducted by our high-level leadership. And, by the way, in total, since the President of Russia and the President of the People's Republic of China came into office, there have been 24 meetings conducted by both countries' high-level leadership. It's important both by itself and as an impetus for a thorough development of our relations from the top downward, as it's at the highest level that the initiatives for our development in all spheres are set. And this development became, I'd say, very extended. I wouldn't name a single sphere of activities in which we haven't established a partnership of one or another kind. When our leaders say that Sino-Russian relations reached the highest level in history, it's not, I'd say, just some pretty words about our bilateral relations, but a reality. We're really happy about it. We'll continue helping to develop relations further.

- For many years in a row, China has been Russia's main trade partner. What's your prediction for trade turnover for last year, for 2017? Earlier, it was set as a goal to increase the trade turnover. The number was 200 billion dollars. But, taking into account the crisis situations that the world economy has shown, is this goal still relevant? And how is our investment cooperation going?

- Thank you for the question. It really should follow the question about the level and character of political relations, as the material base is always important.

You started talking about trade. Well, our cooperation isn't just about trade and isn't just about the trade of goods and services, it's also about investment cooperation, it's about economic cooperation in the broadest sense of the word. It's about cooperation in the financial and bank spheres. It's a relatively new sphere of our practical cooperation. Our Chinese partners consider this sphere as a sphere of material cooperation and interaction. Let's call it this way.

As for trade, this year to date, this year to date for 11 months, our mutual trade turnover increased by 23-24 percent. It's quite an increase taking into account the fact that last year it was small, around 2 to 4 percent. And before that, in 2015, there was a serious decline in trade as the world prices for raw materials and fuel dropped sharply.

This year, month by month, quarter to quarter, our trade has grown by 20, 25, and even 30 percent. In eleven months, we exceeded 70 billion dollars. To be more precise, and it's Chinese data, we don't have our numbers yet, it was about 76 billion dollars. If it continues this way in December, and all the indicators are there, by the end of the year, we'll reach 80 billion American dollars. It's a lot, it's a serious figure, especially for us.

There are, of course, some moments that aren't, well, I wouldn't call them negative, but we don't like them much. For example, when our trade cost decreases, the share of end products, including machinery, increases in our exports to China. And when the turnover increases, it decreases, on the contrary. It happens due to obvious reasons. It's because raw materials and fuel are the biggest share of our exports to China. However, it's a good example of the fact that end product trade, machinery trade, is more stable. And it's on it that strategy in the trade policy sphere should be based. The world market is constantly shifting, it's a fact. We must keep it in mind. We must consider it but we also must work on overcoming the consequences of these ups and downs.

How? In my opinion, first of all, through investment cooperation, and, if you can call it this — through the trade of not goods but projects. It's a long-term game. That's what we're focused on.

- About the projects. There are many of them in the framework of the joint initiative of the Eurasian Economic Union and Beijing's One Belt One Road Initiative. One of the questions is how the preparation of the first draft of the Agreement on the Eurasian Economic Union's cooperation with China is going. One of the projects is the construction of a high-speed railroad joining Moscow and Kazan. How much is China interested in the development of this infrastructure for passenger and, in the long run, cargo transit through Russia and all the way to the European countries?

- We have an intergovernmental commission on investment cooperation. It has a list of 73 promising projects worth around 100 billion American dollars in current prices. We're only at the beginning of this journey. Out of them, around 15 projects are being implemented, successfully implemented in this or that way, or have already been implemented. These are quite big projects. What's interesting is that almost all of them, to this or that extent, can be related to that same joint initiative.

What is this joint initiative? It's integrated cooperation between China, as one of the two biggest world economies, and the Eurasian Economic Union represented by the Eurasian Economic Commission, through which Russia and its partners are building integrated cooperation. Now, this cooperation is spreading to China.

And, first of all, such "double quality" projects, both bilateral and multilateral, include transport projects. To speak more broadly, infrastructure projects.

Overall, the Chinese One Belt One Road Initiative is focused on infrastructure construction, but not only on it. It's also about production assets transfer, the creation of joint production facilities, the development of economic territories along the infrastructure routes, marine sector, and so on. It all exists in our relations in one form or another.

As for the legal framework, as we say, as it's difficult to conduct large-scale trade without any legal framework, there's also progress here. Negotiations are underway between the Eurasian Economic Commission and China. And, as far as I know, after the task was set to complete work on the economic cooperation agreement by the end of the year, and it was done during Chairman Xi Jinping's visit to Moscow on July 4, a lot of work was done then, and at least two rounds of serious talks were held. And, as far as I know, now, this agreement was made or is close to it. Next year, we might start looking for a proper place and occasion to sign this agreement.

Coming back to infrastructure and transport, a prototype of the Eurasian network that, in the best case scenario, will cover a vast stretch of Eurasian territory, is the high-speed railroad connecting Moscow and Kazan. It's just 770 kilometers out of thousands of kilometers from China to Europe, but it's right in the middle. It's not a simple project. As for the Moscow-Kazan network, talks are underway on different aspects of this project. Of course, China is very interested in it. And we're just as interested in this project's implementation. As far as I know, we've already started the so-called feasibility study of the project together with our Chinese partners for the first of several parts of this road. If and when it's done, and it'll happen soon, next year, in 2018, we'll be able to start the actual work on its implementation.

It's seen as a passenger transit road. And, by the way, in China, high-speed railroads function as a means of passenger transit. But we know that lately, even this year, our Chinese partners started experimenting. They connect their high-speed passenger trains and one or even two, so to say, mail and luggage cars. That is, they're experimenting in freight traffic.

For them to be financially justified, as it's quite expensive to build such roads, the cargo needs to be highly effective. This can be electronics and electronic components, this can be cosmetics and perfumes. This can be medicines and medical equipment. Finally, this can be the huge volume of electronic commerce that's becoming more and more popular.

All else equal, of course, we need to look at the numbers, such a railway should be cost-effective. That's why our Chinese partners, and we are talking from a strategic perspective, about a bigger project that will be built, first in pieces, but later they'll be combined into a single network spreading from the Pacific coast, from China to Europe through Kazakhstan and Russia with various branching roads. This project is extremely interesting for all its participants. I'm confident of its future, though there'll be a lot of work.

- One more sphere of cooperation is humanitarian links to which Moscow and Beijing traditionally pay much attention. A very big project — the Year of the Media — has just finished. The year of media exchange. Could you say a couple of words about its result? How successful is Russia's positive image promotion here, in China? Is there, as you think, a demand in China for our culture and education? How attractive is Russia for Chinese tourists, first of all?

- Well, there's demand and there's interest. As for the interest, we satisfy it or try to satisfy it through intergovernmental communication, and the signing of documents that regulate this process. If we are talking about a commercial term such as demand, it can also be used here, as our cooperation is of a commercial nature as well. The more films, TV series and TV programs we sell to China and buy from China, the better.

By the way, as of November 1, after talks and some preparations, our TV channel Katyusha started its work in China. I'd say it's an important event, as the Chinese TV industry is strictly regulated by all sorts of governmental documents. It's clear and understandable. And the fact that we entered this market is outstanding.

But it wasn't just this market. We receive more and more information about each other and ourselves through social networks, through the Internet, through messengers. I'd like to pay attention to one more important fact, and we can be proud of it in our embassy, that recently, just at the end of the year, we opened our account in the Chinese Weixin network. Here, it's called Weixin, and we know it as WeChat. And it covers a big part of global users not only in China. As for China, it's a big country of big numbers. In China, there are 960 million WeChat users, and around 200 million live abroad. If we consider the second criteria, which is the time the user stays online, I think WeChat is the leader, though I don't know the numbers but it seems so. Perhaps it's tied for first with someone.

Anyway, the fact that we now have an account in Chinese is an important event. And there's everything. There is, I'd say, official information, for example, information about getting a visa. There's general information, for example, about preparations for the World Cup. This topic attracts much interest in China. There's some information about our country and there's a chance to ask and answer questions. In one word, we count on this new instrument of raising interest in our country.

The interest here is big and traditional. And we are interested in China the same way. It seems to me that it's not affected by trends. There are no ups and downs, but a stable upwards tendency. We make efforts to support it. This includes all the years of friendly exchanges in the sphere of the media. There were two such years. They were solemnly closed not long ago, November 1, with the participation of the Head of our Government, Dmitry Medvedev, and Li Keqiang, Premier of the People's Republic of China. In these two years, considering only numbers, around 260 events were held. To put it simply, there were a lot of useful trips and meetings, which took the form of various friendly exchanges, including the media-forum practice that we now have. We think it's very useful. Among those involved in this process, there aren't only the biggest TV channels and other media, but also the local ones in the bordering regions. We think it's very important.

And, of course, the blogosphere. We're really interested in it, and among the media delegations that visited our country to get to know it, to see it with their own eyes and tell about it, we organized several trips of Chinese bloggers. A blogger is a serious person in China. We're living in the world of big numbers. And there are many bloggers with 10-20 million subscribers. There are, but it mostly concerns popular show business figures, bloggers with 100 million subscribers.

- The situation on the Korean Peninsula was a very acute issue this year. Almost the whole year, we've been seeing a series of escalations of tensions. What do China and Russia have to offer in order to settle this issue? In your opinion, what chance does Beijing have to influence Pyongyang?

- It's not that Beijing isn't trying to influence Pyongyang by itself, it seems to be doing so, as China and North Korea have thorough relations in all spheres. For us, it's important that China and Russia work on this, even if it's not together, but to at least have the same opinion on the matter. Together, Russian and China proposed some solutions to find a way to stabilize the situation around the nuclear problem on the Korean Peninsula. It's known as the roadmap, and it suggests a gradual approach which takes different forms. It has a series of steps, each with a different result leading to a common goal. That is, a nuclear-free status achieved by placing limits on North Korean nuclear and missile tests and programs, and, consequently, a limitation, possibly at the first stage, a more reserved attitude and then a discontinuation of military exercises that, of course, only provoke Pyongyang to continue the missile and nuclear arms race.

That's where the negative escalation you mentioned comes from, resulting in not less, but more tension, unfortunately. We here, being close to the spot, to the Korean Peninsula, feel it quite a lot, as do our colleagues in the UN Security Council, in which this is one of the most important points in the Security Council's work agenda.

Both China and Russia are unanimous in looking for a political and a diplomatic way to settle the issue and we strongly oppose any options, even talks, of any military solution, as this can affect our countries in the most unexpected way. I'll remind you that the nuclear range where North Korea conducts its tests is located just 100 kilometers away from the border with China. And the residents of the Chinese bordering areas can't help feeling the negative consequences of these experiments, these provocative experiments, I'd say. The same concerns us, Russia's Far East, Vladivostok, the Primorsky Krai. These territories are quite close.

Anyway, a military solution is unacceptable, and as for a peaceful solution, we must continue looking for it. And there's simply no roadmap other than the one suggested by Russia and China. There's no alternative that exists.

- Thank you. And my last question is also about a very important topic. It's about the clear and visible increase in cooperation between Russia and China in the military and military-technical spheres. Do you think it's a logical result of the high level of the political trust between our countries? And what tasks, as you think, are we ready to solve together in this area?

- Both military and military-technical cooperation, after a break that lasted for several decades, was renewed in the 1990s, approximately in the middle of the 1990s. Back then, I was working here, in the same embassy, and I witnessed it all. I can say the following, that both spheres of cooperation are natural for states that have a close partnership with each other, in the finest sense of this word. Moreover, for neighboring states such as Russia and China. For the states that are members of regional organizations, the main of which is the SCO, the Shanghai Cooperation Organization.

Both military and military-technical cooperation are independently important, but from a political point of view, you were absolutely right, they reflect the level of trust between the states. The higher this level is, the closer are both military and military-technical cooperation, which can only develop when they are favorable and advantageous for both parties. There should be no doubt.

We, China and Russia, are trying to build both, and we always say that they aren't aimed against any third parties. It's about solving logical concerns regarding the security of our countries, the security in the modern world, which, as we know, isn't in a state of peace and placidity both from the global and regional perspectives. The Korean Peninsula is one such example.

Anyway, this cooperation is already developing and bringing its results. I think it'll continue developing. It's the result of a political decision by both our country and China. To a certain extent, it shows our complementarity.

At the same time, as for military-technical cooperation, we shouldn't think of it as a one-way street. It's not just about some armament supplies from Russia to China, and the other way around, too. Here we have a partnership. Here we have some elements of joint effort and development. I hope it'll further develop this way. And I repeat once again, it won't hurt any of our neighbors, partners, or countries that pay attention to these processes this or that way.

- Mr. Ambassador, thank you for your detailed answers to our questions. I thank you for this interview.

- Thank you, I'll be waiting for you at the end of next year or earlier, if you wish. Thank you.