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China encourages investment in Russia
2012-05-16
Brief:Chinese vice premier Li Keqiang made a five-point suggestion to Vladimir Putin to strengthen trade ties in the energy and technology sectors.

Chinese vice premier Li Keqiang and Russian president-elect Vladimir Putin meet in Moscow
 
China's State-owned Assets Supervision and Administration Commission (SASAC) is preparing a report warning that the United States could constrain investment by government firms, before a set of interim measures on overseas investment by these enterprises takes effect on May 1. In the meantime, China is seeking more economic and trade cooperation with Russia.

Chinese vice premier Li Keqiang made a five-point suggestion to Vladimir Putin — who will take over as Russian president on May 7 — to strengthen trade ties in the energy and technology sectors. Li gave his comments while on a diplomatic visit to Moscow.

The journal cited sources familiar with the matter as saying that uncertainty in the global economy has made it increasingly difficult for state-owned firms to carry out overseas mergers and acquisitions. ASASAC member said at an administration meeting that he is preparing a report suggesting the United States will constrain investment from government firms.

"This report will not be made public, but will be submitted to high-level leaders for review and approval," a high-ranking SASAC official said, according to the journal.

Other countries are also increasingly cautious of Chinese firms' growing competitiveness. In 2011, international research institutes issued a report in the United States saying that China's overseas investments exceeded US$20 billion in 2006 and US$50 billion in 2008. Between 2004 and 2008, annual investment growth topped 130%. While global foreign direct investment dropped 40% in the wake of the global financial crisis, China's foreign investment fell only slightly, staying above US$40 billion.

Li met with Russian president Dmitri Medvedev and President-elect Putin during his trip to Moscow. He suggested that the two countries strengthen bilateral trade ties. In addition to expanding cooperation in the energy sector — specifically nuclear energy, natural gas, crude oil and coal — he also suggested that both countries implement guidelines for cooperation in eastern Russia and northeast China, and accelerate the construction of cross-border infrastructure.

A Chinese scholar of China-Russia affairs said that China's National Development and Reform Commission is formulating a development plan for the eastern part of Heilongjiang province and Inner Mongolia autonomous region — both of which share borders with Russia — and hopes to strengthen cooperation with Russia on resource development. China also hopes to eliminate obstacles presented by the United States and participate in restructuring the world order, the scholar said.

Xinhua News

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