Russia signs raft of deals with China

By bne IntelliNews October 14, 2014

bne -


Russia and China signed a raft of 40 agreements encompassing trade, energy, finance and technology, following a meeting between Russian prime minister Dmitry Medvedev and his Chinese counterpart,  Li Keqiang, on October 14  in Moscow. The agreements demonstrate how Russia is looking for other options, after sanctions imposed on Russia in response to Moscow's aggression in Ukraine restricted access to Western finance and technology.

Following the meeting, Medvedev said he envisaged Russia-China trade soon doubling to $200bn. “Relations are really on the rise,” Medvedev said following the meeting, as quoted by Interfax. “I think that level [of trade] is absolutely reachable.”  To financially underpin such a trade surge and move towards stronger use of domestic currencies in trade instead of the dollar, Russia and China agreed to a three-year yuan-rubel swap worth 150bn yuan (roughly $24.5bn), and Beijing state banks agreed to provide credit lines to Russian banks and companies to fund technology imports from China.

Kremlin-owned VTB and Vneshekonombank received yuan credit lines worth around $2bn each to fund imports from China.  Leading Russian mobile communications firm MegaFon secured a $500m loan from China Development Bank  for equipment from Chinese technology producer Huawei Technologies, its main supplier. Russia's largest bank, state-owned Sberbank, and Huawei also signed a technology agreement intended to replace reliance on Western technologies. 

“Until recently, Sberbank used high-tech equipment mostly from American and European companies,” said German Gref, Sberbank CEO. “We are continuing and developing our cooperation with them, while at the same time turning our attention to alternative producers and providers.”

The Kremlin is eyeing Chinese loans as a means for Russia to attract funding, after Western sanctions  largely cut off access to international capital markets. “This is a very real source of financing for our operations. It may be implemented in various forms: loans in yuan are absolutely possible, [and so are] connected lending, project financing, participation in major projects,” Russia's economy minister Aleksei Ulyukaev said on October 13, as quoted by RIA Novosti. “This is not a complete but a partial substitution," Ulyukaev said.

Moscow and Beijing also moved forward with some high profile energy and infrastructure projects, signing  an intergovernmental agreement on natural gas supplies, which now allows a landmark 30-year gas deal agreed in May, worth around $400bn, to enter into effect.

Russia's deputy energy minister Anatoly Yanovsky was quoted by media as saying that China had offered Gazprom a role in construction of gas pipelines to carry Russian gas on Chinese territory. In addition, Yanovsky said, consultations were proceeding on gas supplies to China via the 'western' route through Russia's Altai region, with volume of supplies initially set at 30bn cubic meters per year, and the possibility of expansion to 100 cubic meters, according to newswires.

Russia's oil giant Rosneft and China's CNPC also signed an agreement for construction of a liquefied natural gas plant on the island of Sakhalin, in the Russian Far East.

Another memorandum opened the doors to Chinese participation in a planned $25bn high-speed rail link between Moscow and Kazan, with the overarching aim of creating a Eurasian high-speed transport corridor between Moscow and Beijing. Chinese representatives said that Chinese companies could invest about $10bn.

Related Articles

Drum rolls in the great disappearing act of Russia's banks

Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more

Kremlin: No evidence in Olympic doping allegations against Russia

bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more

PROFILE: Day of reckoning comes for eccentric owner of Russian bank Uralsib

Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.