China and Russia sign trade deals worth US$3.5 billion

Tuesday, October 13, 2009

China and Russia has signed billions of dollars worth of deals during Russian Prime Minister Vladimir Putin's visit to Beijing on Tuesday. The trip was aimed at bolstering business, political and military ties.

Chinese Foreign Ministry spokesman Ma Zhaoxu said that Putin came to Beijing to mark the 60th anniversary of diplomatic relations between the two countries. He said that the Russian leader would also meet with Chinese President Hu Jintao. The two sides are to sign a joint statement of regular high level meetings between the two countries.

Earlier in the day, Russian officials told reporters Russian and Chinese companies signed US$3.5 billion worth of deals. They include a $500 million loan from the Agricultural Bank of China to Russia's second biggest lender, VTB.

Gazprom, the Russian gas company, also had signed a deal to sell China 70 billion cubic meters of natural gas a year. Projects to build Gazprom pipelines to China have been delayed because of disagreements over gas pricing.

"It's the first time, perhaps, that such large commercial deals are being sealed in such volume between Russian and Chinese enterprises," said Alexander Zhukov, the Russian deputy prime minister. "Naturally, the Chinese are interested in getting [ownership] stakes."

Zhukov said that there were another forty or so projects, including two banking deals worth $500 million apiece, that were anticipated to be signed during Putin's visit.

Russia and China share more than 4,000 kilometers of border. Official Chinese media say annual trade between the two countries has increased from several billion dollars in the early 1990's to nearly $57 billion in 2008. China is particularly keen to secure supplies of oil and natural gas to fuel its rapidly expanding industries.