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Russia's accession to AIIB is new phase of Russia-China cooperation

Russia's accession to the Asian Infrastructure Investment Bank and China's readiness to participate in building an 800-kilometer-long high speed railway between Moscow and the city of Kazan, the capital city of the Republic of Tatarstan, in the middle reaches of the Volga River, is evidence that economic cooperation between the two countries is soaring to new highs, polled Russian experts have told TASS.

That Russia was joining the AIIB was announced by First Deputy Prime Minister Igor Shuvalov at the Asian Economic Forum in Boao, Hainan Province, last Saturday. "We see a concrete way of improving physical infrastructures in the territory of our country and our partners," he said. Shuvalov hopes that Russia's participation in the AIIB will by no means offer competition to other projects, such as the Shanghai Cooperation Organization, the BRICS Development Bank, and the Eurasian Development Bank.

Also, as some Russian mass media, including the RBC Daily, have said with reference to their sources, China at the forum offered to invest 300 billion roubles into building a high-speed rail line between Moscow and Kazan. In October 2014 Russia and China inked a memorandum on the development of high-speed rail links, including research into a project for a high-speed Eurasian transport corridor between Moscow and Beijing. A future 770-kilometer segment that will connect Moscow and the capital of Tatarstan is seen as part and parcel of that transport corridor.

These events are clear evidence Russian-Chinese relations are soaring to new highs, the investment projects director at the MBG consultancy, Russia's representative in the China Overseas Development Association, Mikhail Udovichenko, has told TASS. Russia's decision to join the AIIB rings the bell again for the overseas partners, because "the world is large enough." After all this bank is considered as a competitor of the IMF and World Bank, he recalled.

On the whole, the analyst said, Chinese partners have developed a warmer attitude to their Russian partners of late.

"The Chinese counterparts, which often eyed Russia with suspicion, have now taken a more positive attitude towards its investment projects." Mutual contacts, including those for wider cooperation by small and medium-sized businesses have been stepped up, too.

The Russian-Chinese inter-government commission for investment cooperation currently has before it 32 projects $75 billion worth, the general director of Russia's Fund of Direct Investment, Kirill Dmitriyev, told TASS in Beijing.

Of all the Chinese projects the AIIB is possibly the most interesting of all to Russia, because infrastructure development is one of the country's most important tasks at a time when spending on investment is undergoing cuts in view of the general economic context, associate professor at the World Economics Chair of the Higher School of Economics, Pyotr Mozias, told TASS.

It is not accidental that Beijing has put forward such initiatives as the Silk Road Economic Belt and the Maritime Silk Road of the 21st Century. In China itself the economic situation has turned from bad to worse, because the domestic demand is limited. This explains why China is keen to be a party to projects in other counties and to access foreign markets. "But for Russia these projects are beneficial only on the condition it will be able to competently safeguard its interests," Mozias said.

"For Russia participation in the AIIB is a beneficial project by and large, and cooperation with China will depend on how we go about the business of shaping our tactics and strategy," says leading research fellow Vladimir Blinkov, of the Russian Institute of Strategic Studies.

As he told TASS, for the time being Russia is unable to offer China anything apart from raw materials and energy, while China is already unable to consume more of these than it is consuming today.

"China needs high-tech items, while we are still unable to manufacture them. For expanding economic cooperation we should focus on developing this type of manufacturing industries," he said.

[Source: By Lyudmila Alexandrova, Itar Tass, Moscow, 30Mar15]

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