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Print Edition> World
UPDATED: October 17, 2011 NO. 42 OCTOBER 20, 2011
Premier Event
China and Russia look to move beyond resources and light manufacturing to hi-tech trade

TOURISM PROMOTION: Chinese performers sing a folk song at a tourism promotion activity in Moscow on September 22 (JIANG KEHONG)

Focus on technology

"A highlight of Putin's visit was the signing of the cooperative memorandum for economic modernization, which attaches great importance to technology cooperation," said the CICIR's Wang Lijiu.

The memorandum was signed by Chinese Vice Premier Wang Qishan and his Russian counterpart Alexander Zhukov on October 11.

"Before this, Russia had signed similar agreements only with the EU and South Korea," said Wang. "This indicates Russia attaches great importance to technology cooperation with China."

With the development of the Chinese economy, China has developed advanced technology in areas such as high-speed railways, shipbuilding and clean energy. Russia possesses cutting-edge technology in nuclear energy, space and aviation.

The two sides will take joint action to optimize trade structures, and increase the proportion of hi-tech products in bilateral trade, said a joint communiqué issued during Putin's two-day visit.

They will also actively push forward the cooperation between enterprises of both countries in the hi-tech and innovation areas, said the communiqué.

Currently, most Russian products exported to China are energy products, while most Chinese products exported to Russia are light industrial products, said Wang.

One day before the start of Putin's visit to China, businesspeople from China and Russia signed 16 economic and trade cooperation deals at the Sixth China-Russia Economic and Business Summit in Beijing. The business agreements, covering a wide range of fields, including new energy, mining, machinery, vehicles, electronics and agriculture, totaled $7.08 billion.

Heated negotiations

Natural gas price negotiations were one of the multiple heated topics during Putin's visit. The negotiations involve the natural gas cooperation project between the two countries for the next 30 years.

In October 2009, Russian gas company Gazprom and the China National Petroleum Corp. reached a framework agreement on the project. According to the agreement, after the natural gas pipeline is completed, Russia will deliver 70 billion cubic meters of natural gas to China each year.

Russia claimed China's purchase price should be equal to that of Russia's European customers. But China insisted the price should be lower.

During Putin's visit, the negotiations went on. Chinese Vice Premier Wang Qishan and Russian Deputy Prime Minister Igor Ivanovich Sechin were trying to narrow the differences.

After the meeting, Sechin announced the two sides made significant progress over the price negotiations. Putin also said discussions on natural gas supplies for China are approaching their final stage.

"The two governments are making efforts, trying to bring the enterprises concerned to an agreement, but it is difficult," said Wang Lijiu. "And both sides need more patience."

"Considering the project's long-term, strategic importance and two countries' mutual needs, I believe it is only a matter of time before China and Russia reach an agreement on gas prices," said Zhao Mingwen, a Russian studies expert with the China Institute of International Studies.

China now has a gas pipeline linking it to Turkmenistan, Uzbekistan and Kazakhstan. Also, two new gas pipelines are under construction in the region. In addition, China has launched a gas pipeline project with Myanmar and is strengthening cooperation in gas projects with Australia.

The China-Russia pipeline will enter China from its northeast, an important industrial base of China. The project will therefore be of great importance to China economically, Zhao said.

The price should be fixed through negotiations between Gazprom and the China National Petroleum Corp. based on market rules, he said. Differences between the two companies have not affected the two countries' sound political relations.

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