Discussions With Senior Officials From China, Mongolia, Laos, and about the Russian Economy: Full Contents & Analysis

The Russian President, Vladimir Putin, has taken part in a series of conversations as part of the Far Eastern Economic Forum in Vladivostok. Other participants included Sonexay Siphandone, the Prime Minister of Laos, Gombojav Zandanshatar, the Prime Minister of Mongolia, and Li Hongzhong, Vice Chair of the Standing Committee of the Chinese National People’s Congress. 

These sessions are often useful as they are unscripted and can often throw up interesting geopolitical observations. Russia, China and Mongolia for example had just signed a massive, 30 year gas supply agreement for the Power of Siberia 2 pipeline.

The session was moderated by Maria Rybakova, and contained significant input from Putin as concerns the Russian domestic economy, as well as significant insights into Russia’s trade and infrastructure development with ASEAN, the development of Mongolian integration into Russia-China connectivity and supply chains, and an overview from China as regards Belt & Road Initiative style investments into Russia and other regional markets.

Putin also talked about the potential for trade with the Asia-Pacific nations and particularly with Alaska. It was a substantial, involved session, that we have broken up into four main parts marked by pertinent maps: ASEAN, Mongolia, China, and Russia.

Comments are prefixed by the relevant surnames; our analysis is prefixed RPA. Non-essential text has been edited for ease of reading and to avoid repetition.

Rybakova: “President Putin, traditionally, we have two main economic forums in Russia: the Far Eastern Forum, which has always been oriented towards Asia and the Pacific region, and the St Petersburg Forum, which, has always served as a window to Europe.

If you look at the Russian sovereign symbol – the double-headed eagle – it also looks to the West and to the East. You had a fulfilling trip to China for the Shanghai Cooperation Organisation summit. One can get an impression that the eagle is now looking to the East with its both heads. A group photo of you, Xi Jinping, and Narendra Modi has circulated throughout global media. It was dubbed a new alliance of the elephant, the dragon and the bear. My question is: “What place does the bear have in this alliance? What is it in this group?”

Putin: “A bear is a bear.”

Rybakova: “A bear is a tough animal.”

Putin: “You said that our Russian eagle is looking to the East and to West. But there is also South.

I have discussed this issue with my colleagues many times. What I am saying is that Russia’s development and our expanded interaction and joint work with our friends from the Asia-Pacific region and the Global South has nothing to do with the current political developments.

President Xi Jinping and I took up this major effort 20 years ago. It has nothing to do with the current circumstances but is related to our respective national interests. Our economies are complementary, we are neighbours, and we share many common interests, common approaches, and traditional values.

We, in Russia, knew the inner workings of the global economy. What are they? The whole world knows well that it is growing at a fast pace featuring new areas of focus and growth points. Naturally, we are guided by this, as we enjoy excellent neighbourly relations with many countries, including China, India, and Indonesia. Please note the pace of growth in these countries: Indonesia has almost 300 million people. That is quite a market.

Then there are smaller, but rapidly growing countries, such as Malaysia, Thailand, and Vietnam, with which we have had special relations for decades. Why would we not put all of that to good use? It is a natural thing to do. It is simply an answer to objective processes occurring around the world and in the global economy.

We have never refused to cooperate with those who wish to work with us, including in other countries across Asia. I simply do not want to put anyone in a difficult or awkward position. Companies from certain countries that face some problems due to the current political circumstances have not left our market; they are still in Russia, and they continue to operate and even to expand.

For political reasons, many European companies have exited – at a loss to themselves. We are aware of this and remain in contact; many are eager to return as soon as political restrictions are lifted. We do not turn our backs on anyone. Contrary to suggestions that we are “looking elsewhere,” we are not. Our foreign and economic policies remain stable and predictable.

In my view, this represents a clear competitive advantage, as stability is crucial for business. We have not turned away anyone or forced anyone out. Those who wish to return are always welcome, based on the re-entry conditions that we are developing.

Regarding the Dragon and the Elephant dancing together – this analogy was originally made by President Xi Jinping, not me – later the Bear was added. The Bear, of course, symbolises Russia. But we are staying in the Far East, and here we also have the world’s largest Tiger – the Ussuri tiger, which is a Russian tiger.”

RPA: The Ussuri Tiger, (Panthera tigris tigris) also known as the Siberian Tiger, is the largest Tiger species in the world.

Rybakova: “Continuing with our earlier economic theme, overall, it seems to me that there is a global trend towards protectionism. In other words, it appears that many countries prefer focusing inward, supporting domestic business rather than attracting external competitors. I want to emphasise that this is just my observation and my opinion – I am not an economist and would like to hear your opinion. What do you think: is this policy, which seems to be actively pursued in some countries, beneficial or not?”

Putin: “The protectionist approach is harmful, both to those who adopt it and to the global economy and international trade. It fosters separatism, both regional and national. Nothing positive comes from pursuing such a policy, as today’s world is highly interconnected and driven by possibilities and technological development. Isolating oneself within a purely national framework is difficult and counterproductive, as it inevitably undermines competitiveness.

We proceed from the fact that Russia is open to cooperation with all countries of the world, and above all with those who are willing to work with us, with our friends. At the same time, we are not shutting ourselves off from anyone. I believe the vast majority of those who are present here, if not everyone, will agree with me: such openness is beneficial to everyone who adheres to this point of view and this policy.”

LAOS & SOUTHEAST ASIA (ASEAN)

Rybakova: “Next, I would like to turn it over to the Prime Minister of the Lao People’s Democratic Republic. Mr Sonexay Siphandone, you have the floor.”

Siphandone: “Ladies and gentlemen, it is a genuine joy and honour for me to participate in this forum. I was very happy to receive an invitation from President Putin and to come to Vladivostok. This is my first time in this city. On behalf of the Government and the people of the Lao People’s Democratic Republic, I would like to express my sincere gratitude for the warm welcome extended to me and our delegation.

This forum contributes to improving the quality of life in the Russian Far East and in the complete Asia-Pacific region. Our meeting today clearly demonstrates Russia’s leading role as it strives to promote international cooperation within bilateral and multilateral formats. This also applies to political and economic interaction, as well as to promoting innovative technologies and designs.

Today, we have found ourselves in an extremely difficult situation, where changes in the international arena are absolutely unpredictable due to the geopolitical situation, with existing problems, primarily caused by protectionist measures that some countries are introducing in an attempt to compete and even hinder the growth, accelerated growth of other countries.

This is aggravated by several other problems, including natural disasters, climate change, exceedingly rapid development of modern technologies, and innovative technological solutions, especially the introduction of artificial intelligence.

We are facing the problem of instability on the energy and raw materials markets. Food also poses certain problems. We are witnessing crises in this area as well.

These problems must be solved to ensure global peace, prosperity and stability now and in the future. To solve all these problems, we must cooperate. We must use the existing consultative, multilateral and bilateral mechanisms that are based on the principles of mutual respect and compliance with international law. This is an important mechanism that often requires certain reforms to properly reflect the current situation and to meet its challenges.

The theme of this year’s forum is “Cooperation for Peace and Prosperity.” This choice is highly relevant in today’s circumstances, because without peace, prosperity cannot be achieved. Conversely, without prosperity, peace cannot be truly sustainable or lasting. That is why we must work together to ensure that the concepts of prosperity and peace go hand in hand.

The Far East brings together multiple countries with enormous potential. We can see that Russia plays a key role as a driving force for strengthening cooperation in this region, both in bilateral and multilateral formats.

Above all, associations such as BRICS, the Asia-Europe cooperation framework, the SCO, and others contribute significantly to advancing regional economic cooperation. These formats are based on the principles of mutual respect and the independence of their members.

Laos also seeks to promote cooperation within the framework of open and inclusive mechanisms. We believe that only through such cooperation can we find effective solutions to modern challenges. It is essential to make use of international mechanisms that continue to remain relevant in addressing these problems.

For the Government of the Lao People’s Democratic Republic, it is essential to create a more favourable economic environment for attracting investment and expanding trade.

Among other measures, we are working to establish and develop special economic zones and industrial parks across the country. We have also eliminated unnecessary bureaucratic barriers to make the process of attracting direct foreign investment as comfortable and transparent as possible.

We have also updated the investment law, introducing several provisions that make investing in our country more attractive to both domestic and international partners.

Our focus is on the most promising sectors: agriculture, renewable energy, geological exploration, manufacturing, pharmaceuticals, education, technology, services, tourism, transport, infrastructure projects, and logistics.

I would also like to stress that Laos is the only ASEAN member state without access to the sea. This makes it especially important for us to maximise the advantages of our strategic geographical position. Our goal is to ensure connectivity through land transport routes and thereby contribute to the development of logistics across the southeast Asian region.

Our government makes considerable investment in infrastructure and the construction of high-speed railroads across the entire country. We also continue to extend transport and logistics connectivity with friendly countries to become a regional hub for investment and trade. Tourism obviously plays a major role in that respect.

It is thanks to such policy and measures that Laos has earned trust and recognition at regional and international platforms. I would like to note that Laos held the 2024 ASEAN presidency during which we identified nine priority tracks.

All of them concerned the promotion of greater connectivity and sustainability of the region built around ASEAN’s three major principles. We had a very fruitful ASEAN presidency, and we remain loyal to the declared principles, namely, the principle of ASEAN’s central role.

Today we can safely say that ASEAN is a community which has proved its commitment to peace and regional cooperation, acting invariably in the spirit of mutual assistance, in accordance with the path ASEAN has chosen.

The Lao People’s Democratic Republic believes that enhancing ASEAN requires the promotion of economic cooperation and connectivity in the overall region. We will continue to augment regional integration and connectivity.

Laos is open for cooperation with all countries to achieve the goals of promoting peace, stability, prosperity and wellbeing in the region and worldwide.

It is in this spirit that I would like to invite you all to visit Laos so as to learn about our rich culture and beautiful nature as well as to see your potential in fostering cooperation and making investment in our country.

Also, on behalf of the Government and the people of Laos, I wish every success to the 10th Eastern Economic Forum here in Vladivostok. I hope it will remain a venue for free exchange of opinions, for cooperation and building a future where all countries have equal opportunities.”

RPA: The Russian Deputy Energy Minister Roman Marshavin met with Siphandone just a day earlier to discuss Russia-Laos cooperation in energy development and investment. That report, which also contains other bilateral trade and investment intelligence, can be accessed here.

In the wider context, Siphandone’s comments illustrate growing trends on the geopolitical level. As he stated, Laos is a member of ASEAN, and he referred to ASEAN policies numerous times as being in complete alignment, and in alignment with Russia’s foreign trade policies. That aptly illustrates the growing relationship between Russia and the ASEAN bloc, which is also a Shanghai Cooperation Organisation partner. Several ASEAN countries are either full members or partners of the BRICS, including Indonesia, Malaysia, Thailand and Vietnam, while Vietnam also has a Free Trade Agreement with the Eurasian Economic Union (EAEU). Other ASEAN countries, including the major Indonesian market, are negotiating similar deals.

In total, ASEAN has a GDP (PPP) of US$13.15 trillion, with a GDP per capita (PPP) of about US$19,048, among a population of about 690 million. It is for this reason that ASEAN is specifically mentioned in Russia’s Foreign Policy Concept as a key market to engage with. Siphandone’s remarks indicate that this policy is working well. While Russia’s trade and relations with China tend to grab all the headlines, it is Russia’s developing ties with ASEAN that are almost equally as important.

Apart from underlining the increasing ties between Russia and Southeast Asia, Siphandone also addressed the issue of protectionism. Here, two global trends have now emerged, with especially the United States and European Union, engaging in protectionism via the use of sanctions and trade tariffs. The East, on the other hand, does not engage in such behaviour and prefers to negotiate trade agreements. This is a remarkable turn-around, as during the Cold War and immediate post-Cold War era, it was the ‘communist east’ that engaged in protectionism and the West that were pushing for free trade and globalisation. Today, that scenario has undergone a 180-degree turn.  

Rybakova: “Thank you very much for your kind words. Thank you for the invitation, I will gladly accept it as I have never been to Laos. In addition to what you have told us, I would like to separately discuss an amazing thing: Laos is the world’s largest exporter of electrical power. You are even referred to as a Southeast Asia battery. How did Laos manage to increase it in such amounts so fast? Respectively, we may also learn about the Laos example, especially as President Putin said we must also build hydroelectric power stations and increase the fuel and energy complex in every possible way. My main question is where will the money come from? We are talking enormous amounts of funds, the volumes are large, and the goals you have set are, let us say, quite serious.”

RPA: While Russian oil and gas tend to hit the headlines, Russia is also developing other energy resources, such as nuclear, wind, and hydroelectricity.

Putin: “I will answer here. Yesterday, we had a major meeting with Laos where we discussed the fuel and energy complex in the Far East, and the importance of investing in expanding it. Money is always important, but not the main thing. The main thing is to properly organise work, to identify priorities, and to establish interaction between various entities that have been assigned a common task.

This common task is for the regional authorities to, on the one hand, come to terms with investors and, on the other hand, investors must guarantee – some of our colleagues present here, for sure, are planning to do something – and these investors must guarantee the consumption of this energy, meaning that those who will produce it must be sure that as they invest money in creating energy capacities and grid facilities, their efforts will not be in vain, and things will not hang up after they spend their money.

The first thing that needs to be done is to organise joint work, and then to look for the latest technologies and investors who are ready to use these technologies in conjunction with the oversight organisations in charge of monitoring the fragile ecosystem of the Arctic and the Far East. This is the common task.

In that case, money will not be a problem, because the invested funds will quickly show a return on investment. Ultimately, this will benefit the budget as well, since it will receive more tax revenue from the effective and competently organised work at new enterprises.”

RPA: Putin is indirectly discussing the importance of Public-Private Partnership (PPP) agreements here where Governments provide some capital and project guarantees and the private sector matches the Government’s commitment. This structure also allows a flow from the private sector into infrastructure projects, as long as a sensible RoI can be achieved. This can be through the longer-term cashflow benefits of customer revenues (such as water or electricity bills) or through the specific project later being listed as an IPO, when initial investors can cash out all or part of their equity. We can expect an IPO boom in Russia and in countries where Russia is investing in future years.    

Rybakova: “Since we are discussing energy projects, I still want to listen to the story about how Laos managed to make such a stride (become a major electricity exporter) I want to ask how you could become the main power source? I understand that our technical issues have now been resolved. Mr Siphandone, please tell us the secret of your energy market. How did you manage to achieve such great results? Why does everybody want to connect to your power source?”

Siphandone: “This is a very important question. We consider the electric power to be a priority area for us, like oil and natural gas. The thing is that we are a country that purchases 100% of its oil and gas, and for this reason the electric power is important for us, and it is also green power. Our government encourages a broader use of electric power.

We also regard the development of hydropower engineering as a priority, as we have abundant water resources and many rivers in our country. All this allows us to build a large number of hydroelectric power plants. 95% of the energy that Laos produces comes from hydropower engineering. The total capacity exceeds 12 million megawatts. We plan to increase this figure to 30 million megawatts.

But given climate change and other problems, the problem looks still greater for us, especially during the rainy and drought seasons. This is why we resort to other, alternative energy sources. Specifically, we use wind and the solar energy.

We would like to thank President Putin, after our President visited Russia at the end of July. During the talks, peaceful use of nuclear energy was discussed, as well as the use of nuclear energy products in medicine. We talked about cooperation in agriculture. I firmly believe that cooperation with Russia will make it possible for us to develop our energy sector, and it will develop in a more stable manner. Moreover, we will ensure stability in the production and consumption of energy.

Of course, we cannot speak for entire Asia, but given our development priorities, we focus on advancing technology and science. We are creating a network of metadata centres to develop the ICT sector, and all of this requires energy. Therefore, we give priority to meeting domestic demand for energy and then export energy to neighbouring countries.

We are developing a power transmission network in order to cover more Asian countries.

Previously, we exported electricity to Vietnam, Cambodia, and Thailand. We also exported electricity to Singapore and Malaysia. Nowadays, we are beginning the second stage of all these projects. Yes, these are all priority areas for us, but energy must be provided first for our own domestic consumption and also meet the needs of neighbouring countries if we export this electricity there. These are very good prospects for our sector.”

RPA: It is interesting to note that Laos has such a forward-thinking attitude towards its energy needs. While it has abundant hydro-electric resources, the Government has recognised it is over-reliant on the one resource (95% of its energy production) and is looking to diversify. It is embracing wind power, solar as well as nuclear power options. This is in complete contrast to the European Union, which decided it was over-reliant on Russian gas, yet had already failed to diversify its energy sector by rejecting nuclear power, then placed import tariffs on inexpensive Chinese made solar panels and wind farm equipment, as well as EV’s. As Siphandone stated, the primary objective for Laos was to ‘give priority to meeting domestic demand’ whereas in the EU this changed to become ‘stop buying Russian energy’ – resulting in higher, not lower energy prices with their domestic demand.

Rybakova: “In 2021, Laos and China launched one of the largest high-speed railways. There have been reports that the railway may be subsequently extended to Thailand. It is a major project that requires complex technology and infrastructure. The question is: is there an opportunity, a chance, or prospects for connecting the railway to Far Eastern ports? And how can this be done sooner? It would expedite both our trade and cooperation. Is this a realistic prospect?”

Siphandone: “As for transport, we are using a modern railway that is far more advanced compared to the railway we built many years ago. As I have already said, we are turning from a country with no sea access into a country connected to others. On this project, we cooperate with China, and we cooperate in railway development. We have successfully completed the Laos-China railway Of course, the coronavirus pandemic was an obstacle, but we have managed to overcome these difficulties in our strategic cooperation.

According to the respective initiative, there is an agreement between Russia and China. If there is also an agreement between Russia, Laos and China, we will be able to transport products from Laos via China to the Far East, including to Russia.

The railway may open new cooperation opportunities for Russia and ASEAN, China and ASEAN, and improve Lao products’ access to the market. I would like to stress that this is an alternative route that is faster and more sustainable.

The government of Laos is considering the possibility of establishing sea routes to Vladivostok through China, potentially via Hainan or a Vietnamese port. We have already agreed on some aspects of this project to date.

It would be an excellent opportunity for us to cooperate with Vietnam. We have no access to the sea, but we have made an agreement with Vietnam that would help us reach both China and Russia.

As for Mongolia, we could also use similar transport infrastructure to exchange products. Certainly, there have been many advantages to developing the Laos-China railway network.”

RPA: As Siphandone mentioned, Laos is landlocked, meaning access has traditionally been via overland routes from China, although the country is mountainous. The China-Laos railway was a major engineering feat and now connects Laos to China’s Kunming city in Yunnan Province, a major southwest Chinese hub and connected to the Chinese national railway system in its own right. Yunnan itself is a market of 47 million as opposed to Laos population of 8 million.

However, obtaining access to seaports, such as those in Thailand and especially neighbouring Vietnam, would also greatly assist Laos in its foreign trade. The Russian FESCO transport and logistics operator has already earmarked Da Nang, on Vietnam’s eastern seaboard, to service transhipments to and from Russia and Laos, from Vladivostok.

MONGOLIA, CENTRAL & EAST ASIA

Rybakova: “I would like to invite our next speaker. Prime Minister of Mongolia, Gombojavyn Zandanshatar, you have the floor.”

Zandanshatar: “Ladies and gentlemen! President Putin, I would like to sincerely thank you for your kind invitation to participate in the Eastern Economic Forum, which grows in significance and scale with each passing year. It is a great honour for me to take part in the jubilee tenth Eastern Economic Forum as the head of the Executive Power of Mongolia.

The regular assembly of the Eastern Economic Forum, along with its discussions on key issues of international and regional economic development, investment, infrastructure, energy, and environmental cooperation, is of great importance for shaping the future trajectories of our countries. This has firmly established the forum as a vital mechanism for dialogue in the Asia-Pacific region. I am confident it will continue to serve as an authoritative platform for meaningful discussions.

This year’s theme “Cooperation for Peace and Prosperity” is both timely and highly relevant. I believe that our deliberations here will help chart new avenues for joint development.

Amid large-scale political, social, and economic changes on the global stage, our countries are facing complex challenges in the social and economic spheres, including rising prices and persistent logistical and financial difficulties.

I am confident that the Far Eastern region – home to the majority of the world’s population and accounting for one-third of global GDP – will play a decisive role in the future. For this reason, Mongolia is keen to deepen trade and economic ties and to expand investment, particularly with the countries of East and Southeast Asia.

Along with our geographical advantages, Mongolia boasts abundant natural resources as well as a young and skilled workforce. The Government of Mongolia has been pursuing consistent policies to harness these assets, attract investment, and foster trade and cooperation, and these efforts are already delivering results. Over the past three years, our economy has grown at an average annual rate of 6%, contributing to the region’s stable development.

The Government will continue its work on diversifying the economy, strengthening macroeconomic stability, creating a favourable business climate, and enhancing the openness of foreign trade.

We are currently celebrating the 80th anniversary of the end of the Second World War, an event that has been ingrained forever in the history of humankind including the peoples of Mongolia, Russia and China.

Our countries, eternal neighbours and strategic partners, keep strengthening and fostering bilateral and trilateral relations, overcoming all barriers, as we are set on expanding mutually beneficial cooperation.

Ten years ago, the three countries’ leaders signed a roadmap of cooperation between Mongolia, Russia and China, and identified the priorities of trilateral interaction. Several days ago – in fact, three days ago – the leaders had a meeting in China to discuss further cooperation plans.

I want to stress that Mongolia is ready to actively participate in the alignment of the Steppe Road Initiative, the Eurasian Economic Union, the Belt and Road Initiative, and also to promote and deepen the implementation of the economic corridor with Russia and China. We will ensure stable and fruitful participation on this track.

The programme of establishing an economic corridor Mongolia-Russia-China designed to develop and enhance comprehensive cooperation within the strategic partnership between Mongolia, Russia and China, will enhance political trust, attract investment and contribute to regional integration. In this context, Mongolia has always had highest regard for the significance of and prospects for the 33 projects of the economic corridor. We believe that laying foundations for mutually beneficial cooperation, especially in road transport, helps attract investment from international banks and financial institutions. Regular trilateral meetings on the implementation of these projects also promote their advancement.

The parties have also agreed in principle on another major project – construction of a gas pipeline across the territory of Mongolia. I would like to declare with full responsibly from this rostrum that the Mongolian government is committed to rendering every possible support to this mega project. We believe this project will unveil new economic opportunities, will be beneficial for the environment and strategically important. It will become a project of great significance for trilateral cooperation.

In addition, our countries are also discussing an upgrade of the central transport corridor connecting our three nations, setting up new railway interchanges and the development of cross border checkpoints which meet international standards. These are all strategically important and economically advantageous projects. We think the implementation of these programmes and projects contributes to expanding trade and transport links between Russia, China, Asia and Europe and also steps up regional cooperation.

An interim agreement on free trade between Mongolia and the Eurasian Economic Union and its member states was signed at the meeting of the Eurasian Economic Commission Supreme Council in Minsk last June. Under the agreement, tariffs were cut on 367 goods and temporary customs duties on some goods were completely scrapped, which was in important step forward in regional economic integration.

The Eastern Economic Forum will open new opportunities to fight problems in the Far East, Asia and the Pacific Region, invigorate regional cooperation in the economy and other areas, and also launch new important joint projects and programmes.

We are totally ready to expand cooperation and to advance the development of the region together. Over the past time, we have initiated a multitude of programmes and measures to enhance integration. Stepping up these efforts, filling them with new content will serve our common interests.

I wish all the participants of the Eastern Economic Forum success, achievements in work, and good health.”

RPA: Zandanshatar mentioned numerous important projects in his address. We can identify these as follows:

The Steppe Road Initiative: is a proposed road project that would link the Mongolian capital, Ulaan Baatar, to Astana in Kazakhstan via Russia. It would provide a connectivity link of various inland ports and transit hubs between the three countries. Ulaan Baatar envisages “Five Great Passages” requiring US$50 billion in investment, which would include:

A 997 km-long transnational expressway linking Russia and China, 1,100 km of electrified rail infrastructure, the construction of a new railway between the major border checkpoints at Altanbulag on the border with Russia, and Zamyn-Udd near the Chinese border, and the construction of oil and gas pipelines from Altanbulag to Zamyn-Uud.

The Steppe Road isn’t just about transport infrastructure, but part of a Mongolian national development strategy which also seeks to invigorate the country’s telecom and tourism sectors and boost its mining and energy potential.

Much of the road route is already being built as part of Russian and Kazakhstan’s own domestic development, such as the Russian Vostok M-12 route. 

The Eurasian Economic Union (EAEU) includes Russia, Belarus and Armenia as well as Kazakhstan and Kyrgyzstan, and has signed a free trade agreement with Mongolia that came into effect in June this year. With an EAEU population of 185.5 million, and a Mongolian population of 3.5 million, the onus is on Mongolian manufacturers and exports to take advantage of a deal that reduces duties on 367 commodity products. This has already spurred the setting up of free trade zones and manufacturing hubs on Mongolia’s borders.   

The Russia-Mongolia-China Economic Corridor describes the transit trade between China and Russia, via Mongolia. New services and infrastructure is being put in place to develop this route, with an increase of 21% in trade along the corridor in 2024. 

The Power of Siberia 2 pipeline agreement was also signed by Mongolia, China and Russia last week, a significant project likely to be the most expensive and complicated ever constructed in Eurasia. The pipeline carries Russian gas from Yamal in Siberia through to China, via Mongolia. This will also allow Mongolia to wean itself off the existing coal power stations in Ulaan Baatar and create a much cleaner environment for the capital, while also providing the Mongolian economy with significant transit fees.    

Rybakova: “I have a follow-up question. You mentioned the Power of Siberia pipeline. I have the following question – will Mongolia buy Russian gas, or will you render transit services only?”

Zandanshatar: “Mongolia is not only a transit country. It can also buy and consume natural gas, connect our cities to this pipeline, and build a Mongolian gas distribution network. It will contribute to industrial development and mitigate environmental problems such as winter smog in Ulaanbaatar and will offer new opportunities for Mongolia’s economy. It will become a strategically crucial natural resource to solve current issues.” 

Rybakova: “President Putin, the next question is a logical follow-up on our discussion of the Power of Siberia. The memorandum has been signed and this caused a stir. Everybody had a sigh of relief, as it seemed to me. The term of the agreement is 30 years. I have not seen the specific price. As I understand, it must be a commercial secret, yet they say that the prices will be lower than in Europe, at least. There was a Soviet joke that we are giving our oil to Europe through “Friendship.” What do you think, are we going to give the “power” of our Siberia to China?”

Putin: “This is a mutually beneficial project. As for prices, they are based on the market and are estimated using the same formula as for Europe. The formula is the same but its components, the prices of various products, which make up the gas price, they are simply different in different regions of the world. The prices in Europe differ from those in Asia. And the formula to determine the price is the same, it is absolutely market-based.

We had long talks, and every time when participants in the economic activity are talking and trying to find a solution – and most of the people here are like those – everybody understands well enough: this is not an easy process, yet everybody is striving to reach the result both negotiating sides are interested in.

Gazprom and its Chinese partners have reached such a result in the course of their years-long efforts. I can only congratulate them all once again. It is really one of the major energy projects in the world. 

We are also discussing cooperation in the Asia-Pacific region. You keep bringing me back to cooperation, say, with our friends and allies in China. We have not yet talked about India: there are many plans there, too. But the Asia-Pacific region also includes the United States. And there are many interested parties there who want to resume or begin new work with us.

We have received excellent proposals for working with US companies in Alaska: they have resources there, and we have technologies for extracting and liquefying gas that are much more effective than those that some of our American partners have. They know this, and at the level of economic players, companies are ready for cooperation. It does not depend on us. We are also ready, but if any political decisions are made there, we will move in this direction, and we can work together in the Arctic, too.

We have already discussed possible work in a trilateral format on some of our Arctic fields with our Chinese friends. In fact, all these options are being discussed, they are on the table. We only need a political decision. This is possible, and cooperation in both gas and oil would be mutually beneficial.”

RPA: Putin extends the Russian Far East focus of the conference here to be part of a wider “Asia Pacific” region involving the United States (Russia is a member of APEC). He provides very recent updates on the potential for United States involvement in the region, including for Russian companies to commence operations in Alaska, noting that some of Russia’s technical experience and equipment in cold weather climates is superior to American products. In return, Putin has suggested Russia is amenable to working with American companies in the Russian Arctic, and even in a trilateral format with Chinese investors. All of this appears to be post-Ukraine settlement developments, but the seeds of cooperation have undoubtedly been sown.     

Rybakova: “Mr Putin, what do you think is the obstacle now preventing us from starting this as soon as possible? What is putting spokes in our wheels?”

Putin: “This is not a question for me. We are not putting spokes or anything in any wheels. Initially, you asked about the Russian Eagle, which is one of our symbols. It looks in one direction and in the opposite. Look at the Eagle now. Did we turn away from anyone? No, we did not turn away from anyone. The Eagle continues to look both ways.”

CHINA

Rybakova: “I would like to give the floor to Li Hongzhong, member of the Politburo of the Communist Party of China Central Committee and Vice Chairman of the Standing Committee of the National People’s Congress.”

RPA: Readers should note that Li is currently the first-ranking vice chairperson of the Standing Committee of the National People’s Congress and a member of the Politburo of the Chinese Communist Party. Although China does not publish a hierarchy of CPC members, this would place Li as the second highest ranking official after Xi Jinping.

Li: “Ladies and gentlemen, friends, I am delighted to meet you all in Vladivostok, the pearl of the Russian Far East, at the 10th Eastern Economic Forum. This year marks the Forum’s tenth anniversary. A decade ago, thanks to the initiative of President Putin and his personal support, the Forum’s remarkable journey began here.

It has become a powerful driver for unlocking the potential of the Russian Far East and strengthening the economy of Northeast Asia.

Over the past nine years, we have witnessed not only the growth of the Forum, but also remarkable progress and breakthroughs in the history of China–Russia relations. Under the strategic guidance of President Xi Jinping and President Vladimir Putin, political mutual trust has deepened steadily, while comprehensive cooperation between our two countries has continued to expand.

The breadth, depth, and high quality of our bilateral cooperation reflect the vitality of interregional ties and exchanges. In this context, I would like to highlight the strong momentum of cooperation within the Northeast China – Russian Far East framework, made possible by the personal attention and efforts of our two heads of state.

For many years, China has remained the largest trading partner and leading external investor in the Russian Far East. In 2024, trade in the Northeast China – Russian Far East region reached US$105.8 billion, representing 43% of our total bilateral trade and serving as a key driving force in China–Russia economic relations.

Today, the world is undergoing profound and accelerating changes. Global challenges are not diminishing, and the lack of global governance is becoming increasingly acute. Many issues transcend the internal affairs of individual states and cannot be resolved by any country alone.

Just a few days ago, President Xi Jinping put forward an initiative on global governance at the SCO Plus meeting. This initiative focuses on the vital question of what kind of global governance system should be created, and how it can be reformed and improved.

This represents China’s vision for effectively addressing global challenges and deepening international cooperation. It reflects the expectations of many stakeholders, demonstrates the responsibility of a major power, and expresses its desire to build a community of shared destiny for humankind.

China and Russia are influential powers and constructive forces supporting global strategic stability and advancing global governance. We are ready to fully leverage the advantages that our two neighbouring countries enjoy, and to strengthen close and united cooperation with all regional partners, including Russia, in the spirit of joint consultations, joint construction, and shared benefit. Together, we can move toward a bright future of peaceful development and mutually beneficial cooperation. In this context, I would like to offer the following opinion.

First – peace and stability contribute to development. Peaceful, stable and prosperous Northeast Asia meets the interests of all the countries in the region and is a common dream of its peoples. China has long been pursuing the path of amicability and establishing neighbourly, partner relations with adjacent nations, supporting the countries of the region in selecting a development path consonant with their national realities. We are ready to deepen mutual political trust and alignment of interests, jointly safeguard the regional stability and respond to common risks and challenges.

Second – openness and tolerance contribute to prosperity. As the Chinese adage goes, ‘Openness leads to progress while isolation – to lagging behind.’ Amid current globalisation, none of the countries is progressing alone. We back up an open, transparent, inclusive and non-discriminatory multilateral trade system and advocate the creation of an open-type regional economy, unlocking the potential of natural peculiarities and the geographical advantages of the world’s countries. We are ready – through joint consultations, joint construction and joint use – to strengthen cooperation in production and supply chains, remove protectionism, assist in the free movement of capital, market and technologies for the sake of economic integration in the region.

Third – reciprocal exchange and assimilation contribute to cementing mutual understanding. Spiritual bonding of nations is a foundation for friendly relations between our countries. Our countries are bonded by common mountains and rivers; our cultures influence each other. Our peoples maintain close ties while our friendship is rooted in the past.

We need to continue this friendly timeline, deepen reciprocal exchanges and training, enhance cooperation in tourism, education, youth affairs, culture and art. We need to make people’s trips easier so as to foster neighbourliness and friendship.

A Chinese adage says, ‘When everyone’s efforts are joined, victory is inevitable.’ Peace and prosperity in our region are inseparable from each party’s efforts. China is ready “to open its doors” so as to share new development opportunities with all countries of the world on the basis of the news results of China’s modernisation and China’s greater openness.

We are ready to promote neighbourliness and friendship, strengthen mutually beneficial cooperation for the sake of joint usage of the results of the development of all the region’s countries for our wonderful common future.

I wish all the participants’ fruitful work. Thank you for your attention.”

RPA: Li’s economic observation that Northeast China / Russian Far East region now accounts for 43% of all Sino-Russian bilateral trade is a significant milestone. This implies very specific trade and investment connectivity between especially between China’s Heilongjiang, Liaoning, Jilin, and to a certain degree its more western Inner Mongolia and Xinjiang Provinces. Connectivity with Mongolia and the latter two will increase Sino-Russian trade in these regions, as will Russia-China connectivity via Kazakhstan. At the present time, the trade focus appears to be centred on the Russian Far East, and the Primorsky and related areas.     

He also mentioned all the countries of the region, which also relates to Mongolia, as well as North Korea. Both China and Russia have been building significant infrastructure close and to North Korea, signalling a re-evaluation of Pyongyang’s potential as playing an active role in regional development. Kim Jong-Un will be paying particular attention as to how Mongolia has managed, and will manage, to develop given its similar geophysical position of being tied to both Russia and China. Moscow and Beijing will both be wanting to see North Korea at least partially take its position as an active Northeast Asian state and to have Pyongyang’s dependency on them reduced.    

Li also mentioned Russia and China’s geographical connectivity in terms of rivers. This is an under-appreciated part of their bilateral transport and logistics, and especially to the western regions, where several major rivers form inland transport arteries, with flows leading to the Arctic regions. The two countries are exploring the possibility of developing an astonishing 70 rivers as part of their mutual logistics reach. China also wants to insert supply chain infrastructure developments into this as part of its Belt & Road Initiative, and to provide assistance with the development of supply chains from the Trans-Arctic Corridor ports in Northern Russia to markets elsewhere in Russia, China and into Central Asia and beyond. There is, for example, significant  Chinese investment into Yekaterinburg to develop that as a massive inland port to service Eurasian/Arctic trade. As always, China plans a long way ahead. 

Rybakova: “President Putin, I would like to touch upon your meeting yesterday, which focused on Russia’s reciprocal decision to abolish visas. We discussed this earlier, and you mentioned during your visit to China that China has introduced a visa-free arrangement for Russians. My immediate question is this: While expanded tourism will certainly benefit both countries’ economies and cultural ties, the main concern remains the matter of payments. For example, I want to visit China as a tourist, but I don’t have a Visa card, and my Mastercard is blocked here. I got a UnionPay card issued about three years ago, but it no longer works. Today, very few banks can issue such cards, and those that do are ruble-based, meaning payments are made in rubles. The only option is to carry cash and exchange it or find a more creative solution. Unfortunately, I haven’t mastered cryptocurrency yet.

Are there any preconditions for making the system of payments between our countries more transparent and accessible? I would like to pose the same question, in turn, to Mr Li Hongzhong.”

Putin: “First of all, I would like to emphasise that the decision by China’s political leadership – clearly made at the highest level – allowing visa-free entry for Russian citizens into China came as a complete surprise to us. We had no prior knowledge of it, and it was especially welcome.

Naturally, this decision is a strong sign of friendship, which we deeply appreciate. It will undoubtedly lead to a significant increase in mutual travel, create more favourable conditions for businesses, and further strengthen the ties between our two countries.

To travel to any country, including China, an ordinary person usually needs to visit several authorities, submit documents, and go through various formalities. Now, with this visa-free arrangement, one can simply board a plane and fly – no bureaucracy. Right? This will undoubtedly bring our two countries closer together. Naturally, we will respond in kind to this gesture of friendship and adopt the same measures.

Regarding tourist travel, it is true that the system of payments needs further improvement. We are working on this intensively. Our financial institutions of the highest level are attending to this matter, along with commercial banks.

I do not want to make more comments at the moment, so as not to create any difficulties for future decisions. This is also connected with the need to respect the interests of financial institutions operating under sanctions pressure. Nevertheless, possible solutions do exist.

We are perfectly aware that steps must be taken for tourists to have as few difficulties as possible. They can certainly use our Mir payment card, and similar Chinese instruments. These payment instruments can be aligned; third countries’ bank cards can also be used. I assure you that the central banks of both countries are working on this and will find a solution.

The heads of the financial institutions discussed all these issues in my presence and in the presence of President Xi Jinping right now, during our delegation’s visit to China. They are maintaining a dialogue and keep discussing this matter. I am confident that decisions are forthcoming.”

Li: “The Chinese Government is introducing a visa-free regime for Russian citizens. These are important outcomes and agreements between our heads of state. It is a meaningful sign of enhanced large-scale progress in Russian-Chinese relations.

I think President Putin’s answer to you is very professional and sets benchmarks for further development. I will not go into detail either, but I think, since our countries will meticulously work out all the issues together, we are sure to remove difficulties and technical issues related to payments. Therefore, we are confident we will achieve our goals.

For example, circulation of Chinese currencies and payments. Of course, we hardly use cash now in China, we use our telephones for payments. This is a hard time for thieves because we do not use cash, it’s just a payment method.

When I arrived in Vladivostok, I also had a good impression because I used my telephone here just like in Beijing. It means we already have good alignment in telecommunications.

We also have to work on financial communications at the next stage. I think that we will certainly reach these goals through joint efforts.

I have just mentioned Russian-Chinese cooperation. I said we need to ensure the free movement of capital, markets and people. I firmly believe that we will solve this issue.”

Rybakova: “Well, it looks like my only hope is the QR codes, no other options.”

RPA: Neither Putin nor Li would be drawn on the subject of Russia-China mutual payment access issues, as the situation is still being resolved and needs to be sanction-proofed. China especially is wary of secondary sanctions, and particular in its banking sector. However, at the same moment, President Trump is also wary of sanctioning China too much because of its substantial involvement in US supply chains.

Rybakova however, perhaps unwittingly, did mention at least an interim solution, being the use of QR codes in making payments. Both Russia and China are actively looking into this, and Li referred to it in passing, as making payments via the use of QR codes via a personal smartphone doesn’t require transactions to travel via financial networks, they travel instead via telecommunication networks.    

Note: At this point the discussion diverged to the Ukraine conflict, which is not part of the Russia’s Pivot To Asia remit. Therefore, we have edited this part of the conversation out as not relevant to our subject matter. Readers wanting to access this section can visit the Kremlin website here which contains the transcript in full.

RUSSIA

Rybakova: “Russia, and especially the Far East – we are going to talk about wealth – naturally boasts enormous natural resources. This also applies to fish resources. Recently, I came across some interesting statistics, which I would like to share with you.

According to available data, in 2024, Russia’s crab exports to China reached a historic high of over 41,000 tonnes. For comparison: supplies of Russian crab to the domestic market over the same period amounted to about 8,000 tonnes. In other words, we have a sort of crab paradox: the crab really does walk sideways, bypassing us and heading instead to Korea, Japan, and China.

Do you think Russia has sufficient processing capacity at its ports to add value through processing, and supply it to the domestic market instead of just catching and auctioning it? After all, live crab is the most expensive product and, as far as I know, all live shipments are currently going in the opposite direction.”

Putin: “It is not all about prices, although that is one of the key factors.

In order to improve and expand the supply of this product to Russian regions, the issue of logistics must first be resolved. We transport it by rail, which is costly, or by air, which is even more costly. That is the problem. Seafood – both fish and crab – ends up mainly in expensive restaurants. Why? Because it has to be flown in. If we could organise transportation and build logistics correctly, the situation would change.

However, I should note that fish products from the Far East – not only crab, but seafood in general – account for about 75% of the national catch. Of this, about 65% is also processed in the Russian Far East.

Today, logistics is the most sensitive issue. We are working on it. We are giving it serious attention, and we will expand our capacity to distribute seafood, including crab, to all regions of the Russian Federation. This is indeed a problem.

According to Ministry of Health standards, we are not yet meeting recommended levels of seafood and fish consumption. If I am not mistaken, the norm is 28 kg per capita per year, while today we are at around 23–23.5 kg. Clearly, there is work to be done here. We are thinking about it, and I hope this issue will be resolved.”

Rybakova: “Since we mentioned transport and accessibility, intraregional flights in the Russian Far East are not, of course, a matter of comfort but a matter of survival. There is simply no other way to reach some areas with such long distances.

I would like to tell you a brief story. I have a friend who lives in Khabarovsk. He needed to fly to Vladivostok but there were no direct tickets available. I think everybody who lives here knows how difficult it is to grab an intraregional flight ticket. And you wouldn’t want to drive 750 km. I hear from drivers they travel with two spare tyres just in case. Anyway, my friend bought a connecting flight through Moscow and flew from Khabarovsk first to Moscow, where he spent four hours in an airport, then boarded a plane and flew to Vladivostok. So, he did all that and, as their plane was approaching Vladivostok, due to adverse weather, their flight was diverted to a backup airfield in Khabarovsk. Overall, he spent 24 hours flying from Khabarovsk to Khabarovsk. Clearly, it is an anecdote, but it explains a lot about regional transport difficulties.

When do you think we can resolve the issue of medium-haul aircraft? Today, I’ve also come across news that the State Transport Leasing Company signed an agreement to lease 50 Baikal aircraft.

Perhaps I have missed something. Is Mr Trutnev here? (Ed: Yury Trutnev is the Presidential Envoy to the Far Eastern Federal District) We have spoken, and he told me that there is no such thing as a ‘Baikal aircraft’. They bought an aircraft that does not exist yet. I am a little confused. Do these aircraft exist or not? And what are the prospects of intraregional flights in the Russian Far East?”

Putin: “The key issue is the availability of medium-haul aircraft in sufficient quantity. The Government, the Ministry of Industry and Trade and our domestic enterprises have many plans in this area.

Unfortunately, I have to agree that this matter is taking longer than we wanted. But there is Baikal and other small aircraft that are to replace Antonov An-2. This is work in progress. I will be honest, sometimes we argue with some of our responsible parties. They will have to expedite these efforts.

We have plans and specific models ready. They have been launched, and I have seen them in operation. The next step is serial production and supplies to airlines. We will certainly do all we can to speed up the process. We are aware of this problem and of the fact that it still persists. We will keep on working on solutions.

I will not list everything. We have the Baikal, and many other aircraft models. I have seen them in operation. But serial production is not yet launched.”

RPA: The Baikal UZGA LMS-901 aircraft is a short haul turbo-prop aircraft, that has been ordered by Siberian operators KrasAir and Aeroservis, with seven to be delivered to Aeroservis between 2025 and 2028. It is powered by a Russian built Klimov VK-800SM turboprop engine.

In January 2023, Russian Aerokhimflot, an association of forestry and agricultural aviation operators set up in 2019, agreed to acquire 120 LMS-901s between 2026 and 2030. In September 2024, Putin ordered the LMS-901 into serial production, although its intended Klimov VK-800SM engine is not expected to be certified until 2025, with deliveries of the aircraft not expected until 2026/27.

Rybakova: “In your speech, you mentioned investment growth; and indeed, foreign investment has increased over the past four years. My question is this: if we look at the investment climate as a whole, foreign investment mainly comes from a few major countries, including China.

You placed considerable emphasis on technological progress, underscoring the need to develop knowledge-intensive and complex industries. Yet, and this is no secret to anyone, investment is still largely directed toward commodity sectors such as mining, oil, gas, coal, and the infrastructure that supports them.

So, perhaps a logical question would be: is there a risk of falling into a commodity trap, where we would be perceived exclusively as an investment partner in these areas?”

Putin: “No, there is no such trap or threat of falling into one. That risk would exist only if we did nothing. You paid attention to my speech, and one of my central – if not the main – arguments was precisely that: when it comes to investment, we must make the Far Eastern region far more innovative.

This is not a problem of our partners that they tend to invest into the extraction of mineral resources. It is our problem. We should create conditions for the development of innovative sectors of the economy, and for people with the right expertise to come to work here. In fact, such a trend is already emerging, as I mentioned. Our task is to build the right environment.

I can assure you that our partners will be eager to invest in promising enterprises, provided that their implementation also brings them benefits. That is the only way it works; there is no alternative. I am confident that we can implement all of these plans.

We discussed these issues with our Chinese partners in Beijing. Overall, we should organise our work, calibrating it to high technology economic sectors. This is what we are going to do. This is the only future for our economies and our countries, the foundation of our shared success. This certainly applies to the regions of the Far East as well.

One more thing about mineral resources is the concept that we can just drill a hole, and oil and gas will just pour through it is a primitive one. The technologies that Russia has adopted do not exist anywhere else in the world. This is a high technology sector. The same applies to the gas sector as a whole.

Gazprom’s cooperation with our Chinese friends and partners is not limited to supply contracts. It is a genuine strategic partnership, which means that people are working together on technology-intensive industries, including gas. And there is plenty of work to be done to ensure the effectiveness and profitability for both suppliers and buyers. An extensive number of advanced technological solutions are necessary.

This work within the framework of strategic partnerships between interested companies has already been established and is underway. The only task now is to extend it to related and promising industries, such as artificial intelligence, and of course, we will do this.

We have agreements in the aviation industry with China as well. I am going to fly to Samara, where I will talk about engine manufacturing. There are plans to work on aviation, which is well-represented in the Far East, including both military and civilian aircraft. Our Sukhoi Superjet 100 is manufactured here in the Far East. There are areas that can be improved, and the same applies to shipbuilding.”

Rybakova: “I checked a job hunt website in Vladivostok. I was curious to see what is offered. What jobs and professions are really in demand here? Mr President, I have hardly seen any jobs for IT professionals. Even the most in-demand professionals section did not mention IT. I found one job opening in software development, but this is not much.

According to a SberIndex analysis, businesses in the Russian Far East are growing faster than on average in the country – and you said so yourself. And yet, this is mainly due to building large production facilities and production of mineral resources. The IT sector is lagging behind.

In your opinion, what could solve this problem if employers start seeking IT professionals? Are they to be ‘imported’? How can the Far East attract highly qualified technology professionals and incentivise them to stay here and treat this region as their home rather than a temporary placement?”

Putin: “I have spoken about this at length in my remarks and said that young people are moving here as they see prospects. There is a demand for young professionals. This trend is apparent but needs reinforcement from the government. The region needs support in shaping a new image of local economic development, mainly with the help of advanced technologies.

I do not know what you have seen on websites, but I know for certain, having heard it from top managers of local companies, that there is a shortage of highly qualified workforce. The Zvezda shipbuilding complex that we have mentioned today is building a large-capacity fleet that we have not had before. We also need aviation professionals here.

We need to develop all modern technologies so that we can go beyond developing the Far Eastern and Arctic mineral resources and can make this region part of Russia’s technology-intensive production in general. It is what we plan, and it will elevate the region to a new development stage.”

Rybakova: “Mr President, another aspect concerns the exorbitant wage demands among blue-collar workers as drivers want ₽400,000 (US$4,927) and welders want ₽500,000 (US$6,159) a month, for example. This is another side of the story. How can this matter be resolved in your opinion? Is it appropriate today to seek such high wages?”

Putin: “I believe the more people earn the better. It does matter. I said that it is an economic category. The higher the wage the higher the spending. The higher the spending the more Russian products are popular in the market because usually, people wish to buy Russian-made goods, and so on. This is another economic factor – and a positive one. Moreover, it makes people’s lives better.”

RPA: Putin managing to be both a socialist – and a capitalist – at the same time.

Rybakova: “Of course, since we are talking about wages, I would really like to discuss what is happening with the Russian economy in general. Many statements have been made on the sidelines of the forum. German Gref (CEO of Sberbank, Russia’s largest bank) has said he has noted signs of technical stagnation in the Russian economy. Do you agree with this?

Putin: No. He knows this well. We maintain constant contact. He regularly participates in our meetings, including those I hold with the Government and the Central Bank. Some members of the Government share his opinion, mainly because the Central Bank is holding the rate high to combat inflation.

You complained about prices in shops. The goal is not only to bring prices in shops down but also to ensure that economic actors also restrain price growth. We can discuss anything, but I do not want to give assessments now. I have my own view, of course, but let me refrain from evaluating the Central Bank’s work. Let me note instead that our Central Bank is highly respected across the international finance community. This is first-hand information.

The Central Bank’s policy is deliberate. In 2023, Russia’s GDP grew by 4.3% and in 2024, by 4.4% At the same time, inflation rose, too. We need to address macroeconomic challenges and ensure a soft, smooth landing of the economy to stabilise key macroeconomic indicators and slow down price growth.

I know the debates very well: we discuss this daily. Just yesterday we were talking about this. Some experts believe that the economy has cooled down, but lending has not stopped. Ask Mr Gref himself: has lending stopped? No. Has the pace of lending has slowed down? Yes.

I know some industries are going through rough times, and people present here also understand this very well. However, everyone also understands that nothing good will happen if inflation spins out of control. It would become impossible to plan anything, not just years ahead, but even ten days ahead. This is a very delicate issue. Take banks, for example. You can ask the Chairman of VTB. He will tell you: yes, perhaps they have overdone it, maybe the economy has cooled somewhat too much.”

Rybakova: Mr Kostin (Chairman of VTB bank) often complains about the key rate.

Putin: “Yes. The Ministry of Economic Development will tell you the same thing. And all of them are right in their own way. But I am confident that we will eventually find a way to maintain the necessary pace of economic growth while keeping inflation to a minimum.”

Summary

Maria Rybakova’s line of questioning was almost exclusively about the Russian economy, whereas the Far Eastern Economic Forum is an international event. Unfortunately, she appeared not especially well-prepared, in particular as she missed any opportunity to discuss the Chinese aspect of its Russian trade and development issues with Li Hongzhong.

While Putin’s comments about the Russian economy were of interest, the Russian Far East’s economy now extends far more beyond its own borders and now embrace not just East Asia, but deep into Southeast Asia as well. That really is the take home from this dialogue, with the Laos Prime Minister describing in some detail how his country is also becoming better connected to Russia – via the Russian Far East. That is also following the same trajectories as Malaysia, Thailand and Indonesia, a substantial achievement when one considers that the distances involved are significant. For example, the distance from Vietnam’s Ho Chi Minh City port to Vladivostok is 10,300km. From Jakarta to Vladivostok is about 7,500 km. To compare, London to New York ports is about 5,600km.

The real intelligence for us then in listening to what was said, is Russia’s increasing focus on access and development with Southeast Asia from the Russian Far East. There is huge amount of development still to come from this extraordinary reach and geographical connectivity.

And what’s next? Putin already gave the answer: Russian Far Eastern development with Alaska, and vice-versa. Give that 3-5 years; but plan your geostrategic agendas accordingly.

Note: Articles like this take many hours to prepare. Our analysis comes with decades of regional experience and professional expertise. When using our content, kindly refer to Russia’s Pivot To Asia as the source.  

Enquiries? Email us at info@russiaspivottoasia.com

Further Reading

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