Analytics


Director of the Center for Russian Studies at the East China Normal University (ECNU) Dr. Feng Shaolei speaks about the EEU and SREB integration conjunction prospects in an interview for the NCC APR

According to Dr. Feng Shaolei, Sino-Russian bilateral cooperation and SREB-EEU “conjunction” are both interrelated and differentiated. For example, recently China has signed the Agreement on Deepening Cooperation on China-Europe Freight Rail Services with seven countries including Russia. This is a cooperation agreement among railway sectors in China, Russia, Belarus, Germany, Kazakhstan, Mongolia and Poland. This agreement will not only serve the “OBOR” Initiative, but also bring great opportunities to the EEU. On the basis of cooperation in previous years, this project will further promote economic development of and trade cooperation among nations along the railway. The signatories will work together to improve the railway infrastructure, establish an information exchange system for transportation safety, expand the scope of railway transportation services, speed up customs clearance and in addition to establishing joint working groups and expert groups to address different issues.


Full text of the interview is presented below

Dr. Feng Shaolei`s interview on the topic “A conjunction of Eurasian and Silk Road Economic Belt integration processes”
Dear Dr. Feng!
In May 2017 two years have passed since the leaders of Russia and China signed the Joint Statement on Cooperation on the Construction of Joint Eurasian Economic Union (hereinafter – the EEU) and the Silk Road Economic Belt (hereinafter – the SREB) projects. 
How do you assess the results of joint actions fulfilled by the EEU and the PRC in the framework of “conjunction” of integration processes of the EEU and the SREB (hereinafter – “conjunction”)?
The world economy has experienced great uncertainties in the past two years since China and Russia announced the SREB-EEU conjunction. Despite such difficulties, a series of important progress has been made regarding the conjunction.
First, although Sino-Russian bilateral trade slumped by nearly 30% in 2015, yet it improved significantly in 2016, with a trade volume reaching USD69.53 billion, rising 2.2% of that in 2015. It took the lead in positive growth among China’s top 10 trading partners. According to the data released by the General Administration of Customs of China, the Sino-Russian trade has increased by 28.8%, reaching USD11.583 billion in the first two months of this year. Within it, Chinese imports have reached USD6.154 billion, rising 44.3%; while Chinese exports amounted to USD5.429 billion, increasing 14.9%. Chinese Premier Li Keqiang said this March that Sino-Russian trade has increased significantly this year, which indicates that both countries have great potentials for economic and trade cooperation with strong complementarity. The stability and development of Sino-Russian trade is an important material basis for the “conjunction”.
Second, it is noteworthy that, recently Chairman Zhang Dejiang of the NPC Standing Committee, Vice Premier Zhang Gaoli in charge of Sino-Russian economic cooperation, and Director Li Zhanshu of the General Office of the CPC Central Committee and other senior officials have successively paid visits to Russia. In particular, President Putin will meet President Xi Jinping this May during his visit in China, which will surely be a very important opportunity for advancing “conjunction”. At present, there are several important changes. First, 73 key cooperation projects have been identified, which means “conjunction” will be promoted by investment in significant projects. Second, both China and Russia have agreed to include inter-regional investment into bilateral investment committee’s work, which will greatly promote investment in small and medium enterprises. It is foreseeable that these mechanisms and projects will be strong impetuses to push forward Sino-Russian investment cooperation.
Third, President Putin has recently stressed that important progress has been made in energy cooperation including the Sino-Russian eastern gas pipeline and the Yamal liquefied natural gas and other projects. Furthermore, through recent consultations and new projects such as cooperation projects in oil and gas upstream, as well as gas storage, natural gas for power generation and natural gas engine fuels, pragmatic cooperation could be greatly deepened. Over the past two years, Russia has exceeded Saudi Arabia six times, becoming China’s largest energy importer. It is important to note that Sino-Russian energy cooperation is constantly promoted against the backdrop of falling energy prices and many competitive factors within the international energy market. Besides, predictably, this trend will continue as it is an important cornerstone for the “conjunction”.
What kind of cooperation between the EEU countries and the PRC can be considered as “conjunction” beyond bilateral relationship of these countries and China?
Sino-Russian bilateral cooperation and SREB-EEU “conjunction” are both interrelated and differentiated. For example, recently China has signed the Agreement on Deepening Cooperation on China-Europe Freight Rail Services with seven countries including Russia. This is a cooperation agreement among railway sectors in China, Russia, Belarus, Germany, Kazakhstan, Mongolia and Poland. This agreement will not only serve the “OBOR” Initiative, but also bring great opportunities to the EEU. On the basis of cooperation in previous years, this project will further promote economic development of and trade cooperation among nations along the railway. The signatories will work together to improve the railway infrastructure, establish an information exchange system for transportation safety, expand the scope of railway transportation services, speed up customs clearance and in addition to establishing joint working groups and expert groups to address different issues. What I want to point out is that the head of Chinese railway sector once told me that during the start-up stage of this project, they have gained fantastic support from Russian railway authorities. They will never forget Russian friends’ contributions to promote multilateral cooperation.
By the way, I would also like to emphasize that, related with this project, just a few days ago, the Dalian Port and the Russian Railway Corporation signed an agreement for cooperation respectively facing the Asia-Pacific region and the Eurasian railway transportation system. Actually it is also an important advancement for the SREB-EEU “conjunction”. 
What benefits and difficulties do you see in such format of cooperation for China and the EEU countries? 
First, China and Russia have unique geographically close proximity; second, leaders of both countries have firm political willingness; third, both countries and the EEU have great economic complementarities. All these factors constitute an important basis for us to promote the “conjunction”.
Both China and the EEU are developing and under transition. On the one hand, we are fully aware that the system, strategy and policies are constantly undergoing changes during this historical stage, including our adaptation to market mechanisms; on the other hand, different partnerships shaped by respective historical backgrounds do not necessarily target the other side of the “conjunction”; besides, it also takes quite a long time to know and understand each other culturally. Finally, the EEU is a regional cooperation platform with a rigid institutional framework, while the OBOR is a project-oriented international economic cooperation process. It will take a rather long time for these two different types of economic forms to coordinate. Such factors will bring challenges to the “conjunction”. Nevertheless, I firmly believe that all these problems will not prevent historic progress in “conjunction”.
Which directions of “conjunction” are the most prospective and why?
In this regard, I'd like to talk about two aspects.
First, in recent years, between China and Russia, between the SREB and the EEU, there emerges a new phenomenon, that is, the regional cooperation has been greatly accelerated. This has been manifested not only between the Far East, Siberia and Northeast China, but also between the Volga River Basin and the upper reaches of the Yangtze River, the Ural region and China’s relevant areas, including St. Petersburg, Beijing and Shanghai and other places. Specifically, our institute has recently held a seminar regarding local cooperation, which is based on our young scholars’ field work in and first-hand materials from enterprises participating in cooperation. The senior official in charge of Sino-Russian cooperation from the Chinese Ministry of Foreign Affairs spent several days purposely participating in the seminar and listening to different views. We can fully believe that such positive and pragmatic attitudes towards promoting cooperation will surely bring concrete fruits.
Second, both President Xi Jinping and President Putin have always stressed that our bilateral cooperation should be oriented towards higher-end technology and industrial cooperation. For instance, for the China-Russia large aircraft project which have been promoted recently, large aircrafts, co-developed and co-manufactured by China and Russia, will join the international market competition between 2025 and 2027. Besides, although there always exist difficulties and challenges for the high-speed railway construction in Moscow and Kazan, yet Ambassador Denisov has recently emphasized that this project has been under constant consultation and advancement. There are great potentials for cooperation in high-tech and high-end manufacturing. As the first step, we should first know and understand each other, humbly learning advantages from each other; second, it is necessary to strengthen the legal construction for the protection of intellectual property rights.
What challenges in cooperation between the EEU and the PRC may appear? And how can they be overcome? What other measures can be introduced in order to increase efficiency and effectiveness of the “conjunction”? What do you think about the opinion that the parties need more institutionalization in their cooperation?
First, I think that minuses in traditional system, which we experienced, still affects our bilateral cooperation. For example, why after so many years, does the cooperation between the Far East, Siberia and Northeast China still move so slowly? I think bureaucracy, dishonesty in foreign cooperation, as well as their limited market fundamentals and development capacities, are big obstacles to regional cooperation. These drawbacks may possibly be reflected slowly in cooperation in other areas as well. I think it is imperative to check the existing regional cooperation projects in order to know what has been implemented while others are still hung in the air. For those projects that haven’t been implemented, we should find out who should take responsibilities, taking action as dealing with corruption.
Second, there are some problems which are not related with our traditional institutional issues. For example, when Russia was sanctioned by the West, Russia was limited in financing through Western traditional bond market. As far as I know, at that time many Chinese counterparts hoped to offer market opportunities for Russian finance, but only until recently, China and Russia have made progress in financial cooperation. Nevertheless, the scale of this cooperation is still far from sufficient compared with the large-scale bilateral cooperation. I think here we also need to solve many innovation issues in mechanisms and institutions. I remember President Putin once put forward, for example, that it is necessary to implement a special capital account within the SCO, facilitating multilateral financing.
How can you estimate the further prospects of the “conjunction” in the short term and the long term?
I firmly believe that there exist much room for the SREB-EEU “conjunction”.
I hold that we should look at future Sino-Russian cooperation from a new height. That is, this is a higher level and larger-scale of cooperation than the current strategic partnership, which may be called a “modernization partnership”. Learning from experience and lessons of cooperation with other countries, Sino-Russian cooperation should not only play the advantages of our close proximity, but also transcend ideology, develop great potentials and complementarities of cooperation between major countries, and employ current high levels of political cooperation mechanisms. Meanwhile, we should also make plans for the long-term cooperation. For instance, what industries, what high-tech could be supported by what kind of financial conditions, and what kind of intelligence and legal conditions. According to me, with the 19th National Congress of the CPC as well as the 2018 Russian Presidential Election, it is possible to lay good foundations for the long-time modern cooperation system construction under both countries’ new, long-term and stable political conditions. This work is not political propaganda, nor is it only aimed at GDP indicators, but instead it is indeed for the development and well-being of our future generations.
Dr. Feng, 
thank you very much for your opinion!.