Russia, China work in Siberia for mutual benefit

Cooperation between China and Russia in eastern Siberia and the Far East will benefit both sides, the largest private investor in east Siberia said.

The gradual eastward shift of the global economic center provides a unique chance for the development of eastern Siberia and the Far East, said Artem Volynets, CEO of the En+ Group, a Russia-based diversified mining, metals and energy group.

"With Russian plans to launch a new development regime and welcome foreign high-skilled professionals, investments will be attracted to eastern Siberia and the Far East to develop infrastructure and build production facilities that manufacture products with high added value," Volynets told China Daily.

"This will bring radical positive changes to the social and economic conditions in these regions. As a result, the modernized eastern Siberia and the Far East will become the new growth engine of Russia."

Eastern Siberia and the Far East in Russia are relatively underdeveloped for a number of reasons, including depopulation, less-developed power and transport infrastructure, slow innovation implementation, and the predominance of negative perceptions about the future among local people.

However, the region, which is close to other Asian countries, has many natural resources, including metals, water and forests, and can also enable Russia to capitalize on Asian countries' growing demand to drive the Russian region's economic growth, Volynets said.

According to Volynets, eastern Siberia and the Far East regions contain more than 90 percent of Russia's platinum-group metals and more than 70 percent of the country's nickel and copper reserves. More than two-thirds of Russian aluminum is produced in this region, which also has many other precious metals.

The area also has abundant hydrocarbon reserves and forest resources. By using hydropower from the rivers, it is possible to produce more than 500 billion kilowatt-hours of electricity annually. Eighty percent of hydropower resources of Russia that are in Siberia remain largely undeveloped, with huge potential for growth.

Moreover, the regions' proximity to Asia shortens the time of cargo transportation, the CEO said.

Cargo transportation from Brazil to Shanghai by sea takes as long as 35 days; from South Africa, 20 days; and from Australia, around 14 days - while from the Vanino Seaport, it takes only four days. Transportation by rail from eastern Siberia across Mongolia will take only one day.

With the dynamic economic development, Asian countries are coming to the forefront of the world stage with their inexorable rise as global economic and political players, and Russia eyes the huge market in the region.

According to the International Monetary Fund's estimates released in July, the average GDP growth rate of Asian developing economies in 2011 to 2012 is going to reach 7.1 percent, whereas the GDP growth rate for developed countries will be 1.4 percent.

"Industrial production is the most important growth driver for Asian economies, which generates huge demand for natural resources, power and derived products," Volynets said.

Currently, Asian economies account for about 20 percent of global energy consumption, about 60 percent of global iron ore imports and more than 50 percent of global production of steel and aluminum, he said.

Asian countries can provide the market, while Russia can provide resources and advanced equipment, so cooperation between Russia and Asian countries is a win-win deal, said Wang Wei, an expert on international affairs with the China Institute of International Studies.

Elena Samburova, an expert on economic geography studies with Moscow State University, agreed.

"The development in the Far East will benefit both China and Russia," Samburova told media in a video meeting held by the Russian Information Agency earlier.

"China's policy to re-energize the old industrial bases in Northeast China has great significance to the development in the Far East."

zhouwa@chinadaily.com.cn