Medvedev: new strategy in Asia is not senseless revenge against Europe

[senheiser]

Medvedev: Russia Won't Close its Economy, Just Turning to Asia

• Reuters
• Sep. 19 2014 13:47
• Last edited 15:39

Yekaterina Shtukina /Reuters/RIA Novosti/PoolRussian Prime Minister Dmitry Medvedev speaks during a session of the International Investment Forum "Sochi-2014" in Sochi, September 19, 2014.
SOCHI, Russia — Prime Minister Dmitry Medvedev said Friday that Russia would not isolate its sanctions-hit economy from the West but said improving relations with Asian countries has become a key strategy.

Sanctions imposed by the West over Moscow's involvement in the separatist conflict in Ukraine have limited Russia's access to foreign cash, sent the ruble to historic lows and slowed economic growth to a crawl.

Moscow in retaliation has imposed sanctions on Western countries. Some politicians and economists, including the head of the nationalist Liberal Democratic Party of Russia, Vladimir Zhirinovsky, and an economic adviser to President Vladimir Putin, Sergei Glazyev, have called for isolating the Russian economy from Western markets.

"Any discussions about fundamental changes to the model of economic development, in the direction of a mobilized or closed economy, are inappropriate and unnecessary," Medvedev told a business conference in the Black Sea resort of Sochi.

He said Russia is ready to work on improving its relations with the European Union and the United States, which are currently at their worst since the fall of the Soviet Union, but said Moscow's partners must "learn to listen to Russia."

"History shows that any attempts to put pressure on Russia have been unsuccessful," he told a crowd of mostly Russian businessmen and politicians.

Asian Strategy
Following Russia's annexation of Ukraine's Crimea region in March and Western penalties for the move, Moscow has embarked on a pivot to Asia, signing a series of trade and business agreements, mainly with China.

The country's top gas producer, state-controlled Gazprom, struck a 30-year $400 billion gas supply deal with China in May.

Medvedev said things are not moving as fast as needed when it comes to improving those relations. But Russia's pivot East is an "absolutely objective" development, he said.

"I hope everyone understands that our new strategy in Asia is not senseless revenge against Europe as it is presented by many political analysts in the West," Medvedev said.

"This is the natural course of events and a thought-through response to the changing conditions of economic development."

Much work is still needed to improve political and corporate trust between Russia and Asian partners, but the benefits of the tactical shift would be far-reaching, he said.

"The growth of our country's role in the Asian region ... without doubt contributes to raising our authority in other places as well, including in the West."

 

[Chinese-Dragon]

Anything Russia needs, we are always happy to improve business and strategic relations further.

Now that America may no longer be able to use Russian rockets to get into space, maybe more space cooperation between Russia and China would be ideal.

 

[FairAndUnbiased]

This is amazing! Why on earth would the EU think that increasing ties with Asia, for Russia, as a country located 2/3 in Asia, is unreasonable?

 

[Beidou2020]

This is amazing! Why on earth would the EU think that increasing ties with Asia, for Russia, as a country located 2/3 in Asia, is unreasonable?

It's Western arrogance.

 

[Cyberian]

Russia, the new member of Axis of Evil.

 

[TaiShang]

Russia's Business With China Poised To Grow As Politics Strain Ties With The West

Forbes,
9/02/2014

China and Russia officials last month celebrated an oil pipeline agreement that will boost trade between the two sides by billions of dollars in the coming years.Against a backdrop of political tension between Russia and the West, what’s ahead for business ties between the two in the future? I exchanged this week with Marlen Kruzhkov,a Russian-speaking partner with New York-based Gusrae Kaplan Nusbaum.Kruzhkov advises Russian and other ex-Soviet Union clients on international law.In today’s unsteady world, it seems certain that business between China and Russia is poised to rise. Kruzhkov holds degrees from Boston University and Northwestern. Excerpts follow.

Q. How is tension between Russia and the West affecting Russian capital flows into Asia? In particular, are there signs of growing business partnership between Russia and China?

A. Russia and China have had a very substantial trading partnership for many years, and the next few years will see even more expansion. Since 2010, China has been Russia’s largest trading partner, surpassing Germany but not the EU.

Given political overtones elsewhere, there is no question that Russia is seeking to increase its trade relationship with China. Just last month Russia and China finally reached agreement on a price for oil exports to China after nearly a decade of fruitless negotiations, and last month Russia broke ground on a new Siberian oil pipeline to China.

Russia continues to expand financially with China, and if it cannot go to the West, it will stay in the East. We work with many Russian and Ukrainians who are also moving assets into Asia as they seek to further diversify their portfolios – expect that trend to continue.

Q. Who are some of the key Russian companies and individuals involved?

A. For the most part, this attempt to strengthen Russia-China trade is led by government sectors. Almost all of the increased trade is in the oil sector which is heavily under Kremlin influence.Thus, the biggest companies tend to be large oil companies: Rosneft, Lukoil, Surgutneftegaz, Gazprom Neft and Tatneft. As much of the oil is planned to go to China via pipeline, the state-owned monopoly for pipelines, Transneft and its subsidiary, Transnefteproduct, are also involved.All the individuals who are in charge of these companies (along with the Kremlin) are involved.

One of the few things that Russians and Ukrainians can agree on right now is that China – and Asia as a whole – offer great financial opportunities at this time. When President Putin makes a public proclamation as he did on May 20, 2014 in Shanghai — “A Russian-Chinese Investment Committee has been set up to continue efforts to expand mutual investment,” one must believe that Russian money will follow Mr. Putin to China. Notably, too, the Russian Minister of Economic Development Alexei Ulyukaev recently prepared a list of 57 state-affiliated businesses seeking to attract Chinese investments. The ministry is trying to attract more than $7 billion of Chinese investments in a wide range of industries.Russian state bank Vnesheconombank (VEB) recently launched a Hong Kong subsidiary to encourage cross-border investments, and encourage more Russian exports into China. Russian aluminum company Rusal (in 2010) became the first Russian company to trade in Hong Kong, and it shouldn’t be a surprise if more Russian companies are soon listed on the Hong Kong Stock Exchange.

Q. Is there any sort of U.S. role as a conduit for Russia-Asia financial and business flows?

A. The U.S. is probably the largest conduit for Russia-China financial flows because all petro transactions must be made in dollars. It is therefore impossible for Russia-China to trade oil without U.S. participation. Approximately 75% of Russia-China oil transactions are denominated in U.S. dollars. Just this month, in order to lessen this need for the U.S. involvement (and the potential leverage such A need offers the U.S.), Russia and China signed a currency swap agreement in order to allow for greater trade between them of their domestic currencies.

Q.What’s the outlook for Russia-China business cooperation in the next 3-5 years?

A. The outlook is good in that China has a voracious appetite for raw materials and oil while Russia is rich in these products. From China’s standpoint, dealing with Russia has the added benefit of dealing with a geographically closer and more stable region than the Middle East.From Russia’s standpoint, China offers a large customer that is not only less judgmental of Russia but provides a nice counterbalance to the West.

 

[mike2000]

Medvedev: Russia Won't Close its Economy, Just Turning to Asia

Moscow in retaliation has imposed sanctions on Western countries. Some politicians and economists, including the head of the nationalist Liberal Democratic Party of Russia, Vladimir Zhirinovsky, and an economic adviser to President Vladimir Putin, Sergei Glazyev, have called for isolating the Russian economy from Western markets.

"Any discussions about fundamental changes to the model of economic development, in the direction of a mobilized or closed economy, are inappropriate and unnecessary," Medvedev told a business conference in the Black Sea resort of Sochi.

He said Russia is ready to work on improving its relations with the European Union and the United States, which are currently at their worst since the fall of the Soviet Union, but said Moscow's partners must "learn to listen to Russia.
"

This alone says it all, Russia doesnt have much choice than to trade with us and the U.S. As i said before we still have the upper hand in world affairs/dominance. So putin knows closing/isolating itself off from the west/U.S will all but cripple/halt Russias economy(which has already slow down considerably due to the sanctions, the U.S is even growing at av faster rate now than Russia.lol). Its not clever to Challenge the west/U.S head on without at least having the economic/financial weight at par with ours. So if anything Russia should first work on its fundamentals until its powerful enough to challenge/surpass us on most fields. But for now we are still the dominant power in this world.
So it will better for Russia to back off from Ukraine, or at least stop its support to the seperatists and find a peaceful/negotiable solution to the crisis, so we can get back to normal business like before.

 

[Beidou2020]

China-Russia relationship grows stronger

China can replace pretty much all the things the West cut off from Russia.
Oil & gas technologies.
Access to capital market.
Using bilateral currencies.
Loans from Chinese banks.
Food exports.
etc.

Impossible to isolate Russia as long as it has China by its side.

West doesn't have the influence it used to back in the day.

 

[TaiShang]

China-Russia relationship grows stronger

China can replace pretty much all the things the West cut off from Russia.
Oil & gas technologies.
Access to capital market.
Using bilateral currencies.
Loans from Chinese banks.
Food exports.
etc.

Impossible to isolate Russia as long as it has China by its side.

West doesn't have the influence it used to back in the day.

Exactly. The Chinese and Russian economies are pretty much complementary.

 

[mike2000]

China-Russia relationship grows stronger

China can replace pretty much all the things the West cut off from Russia.
Oil & gas technologies.
Access to capital market.
Using bilateral currencies.
Loans from Chinese banks.
Food exports.
etc.

Impossible to isolate Russia as long as it has China by its side.

West doesn't have the influence it used to back in the day.

Lool access to capital markets? China itself doesn't have a mature capital markets. The hell, their own private tech companies can't even list in their own country /stock exchange, due to their outdated /backward policies and laws. So you expect Russia to come to their capital market instead of the more developed west/U.S when even the Chinese themselves are running away from their own market to list/raise funds elsewhere?
Until you people open up and liberalize your financial market /currency then you will never be able to do all what you are saying . Trying to manage your currency by the government and maintaining restrictive laws of IPOs/stock market will never be able to attract companies/individuals to list /raise funds in your country (though managing your currency instead of allowing it to float does have its advantage as well) but you can't eat your cake and have it.
It's only hongkong that has a truly global/international stock/financial market and laws/pollicies(which is also due to our legacy there ). Thought you people would have learned from them by now. But NO.

 

[Sanchez]

Lool access to capital markets? China itself doesn't have a mature capital markets. The hell, their own private tech companies can't even list in their own country /stock exchange, due to their outdated /backward policies and laws. So you expect Russia to come to their capital market instead of the more developed west/U.S when even the Chinese themselves are running away from their own market to list/raise funds elsewhere?
Until you people open up and liberalize your financial market /currency then you will never be able to do all what you are saying . Trying to manage your currency by the government and maintaining restrictive laws of IPOs/stock market will never be able to attract companies/individuals to list /raise funds in your country (though managing your currency instead of allowing it to float does have its advantage as well) but you can't eat your cake and have it.
It's only hongkong that has a truly global/international stock/financial market and laws/pollicies(which is also due to our legacy there ). Thought you people would have learned from them by now. But NO.

Which Queen of Elisabeth are you saluting to?

Mr.Putin is much respected in China, but not Mr. M.

 

[Beidou2020]

Lool access to capital markets? China itself doesn't have a mature capital markets. The hell, their own private tech companies can't even list in their own country /stock exchange, due to their outdated /backward policies and laws. So you expect Russia to come to their capital market instead of the more developed west/U.S when even the Chinese themselves are running away from their own market to list/raise funds elsewhere?
Until you people open up and liberalize your financial market /currency then you will never be able to do all what you are saying . Trying to manage your currency by the government and maintaining restrictive laws of IPOs/stock market will never be able to attract companies/individuals to list /raise funds in your country (though managing your currency instead of allowing it to float does have its advantage as well) but you can't eat your cake and have it.
It's only hongkong that has a truly global/international stock/financial market and laws/pollicies(which is also due to our legacy there ). Thought you people would have learned from them by now. But NO.

clueless as usual Mikey boy.

Russian companies are ALREADY accessing the Chinese capital markets
Keep up to date by little British boy

They issue yuan-denominated bonds in the offshore and onshore yuan bond market. China has one of the largest corporate bond markets in the world which the Russian companies have been turning to since being denied access to Western capital markets.

Alibaba going to the US stock market is due to their ownership structure. Vast majority of the Chinese companies are financing in the Chinese capital markets. The number of Chinese companies listing overseas is a tiny fraction of the total. China has the 3rd largest equity market capitalisation in the world. The fact that you don't even know that shows how limited your economic knowledge is

Capital market is the bond market, money market, stock market. Companies usually want to issue debt to raise money. China has a very large interbank bond market where domestic and foreign companies have raised money including Russian companies now. The amount of Russian companies accessing the Chinese bond market is rapidly increasing. They access the growing offshore bond market in Hong Kong for now but China will give more access to the onshore bond market as its much bigger than the offshore market.

China might have capital controls but its not fully restricted, its partially restricted in direct investment and portfolio investment but not fully, its based on the approval given to by the Chinese government to access the interbank bond market.

China and Russia already do direct trading between the the yuan and ruble which means western currencies are no longer needed for trade, investment and financing. Now that Russian companies are accessing the Chinese capital market for financing, Western sanctions have been proven to be ineffective because Russia has an alternative in China.

So much for isolating Russia