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17 June 201617:59

Russian Ambassador to China Andrey Denisov’s interview with the Interfax news agency, June 15, 2016

1162-17-06-2016

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Question: How would you describe Russian-Chinese relations and their potential? Which areas of cooperation should be given priority?

Andrey Denisov:  The strengthening of ties with China, which is a strategic partner of Russia, is definitely a foreign policy priority. Russian-Chinese relations, which we define as a comprehensive partnership and strategic interaction, are based on mutual respect, equality, common interests, mutual advantages and non-interference in the internal affairs of the other, as well as the highest level of political trust ever.

Russia and China have settled all of their major bilateral issues, including the most difficult border issues. The difficulties that inevitably arise in large-scale and multifaceted cooperation such as between Russia and China are settled through talks and the search for mutually acceptable solutions.

The solid legal framework of our relations has been completed with a system of mechanisms for bilateral cooperation. Our heads of state and government regularly meet, and the four commissions that are chaired by deputy prime ministers, which are comprised of 19 industry subcommissions, focus on investment, trade and economic, energy and cultural relations. These long-established and effective tools offer us an opportunity to inform each other of our plans and to address practical issues, thereby bolstering the dynamic and consistent development of bilateral relations.

We support each other on key issues that relate to the vital interests of our states, and we also closely interact on current international issues. The responsible stances of our states and the effective coordination of their foreign policy steps have become a major factor in global stability.

The main event in Russian-Chinese relations this year will be President of Russia Vladimir Putin’s visit to China in June. We also plan to maintain the practice of our leaders’ meetings on the sidelines of large international events. Of major importance in this respect is the upcoming G20 summit in Hangzhou, Zhejiang, China on September 4−5.

The Chinese Minister of Foreign Affairs, Wang Yi, was in Russia on an official visit on March 11, and Russian Foreign Minister Sergey Lavrov made a return visit on April 28−29. During their visits, Sergey Lavrov and Wang Yi met with the presidents of Russia and China, which can be interpreted as evidence of our leaders’ interest in boosting bilateral interaction.

On March 24−25, 2016, a Russian delegation led by Chief of Staff of the Presidential Executive Office Sergey Ivanov was in Beijing for a third meeting within the framework of cooperation between the Russian Presidential Executive Office and the Secretariat of the Communist Party of China Central Committee. The meeting was concluded with the signing of a Protocol of Cooperation.

We are actively developing interaction between our legislative bodies. On May 4−6, State Duma Speaker Sergey Naryshkin visited China, where he attended the second meeting of the Russian-Chinese Interparliamentary Commission on Cooperation.

In 2016, we plan to hold several joint events to mark the 15 years since the signing of the Treaty of Good-Neighbourliness, Friendship and Cooperation. We attach great significance to this fundamental document of bilateral cooperation, which provided a solid foundation for developing a new type of interstate relations based on equal and confidential partnership and strategic cooperation.

Regarding the priority areas of Russian-Chinese cooperation, it could be said that one of the key priorities formulated by Russia is to facilitate Russia’s comprehensive involvement in integration processes in Asia. The attainment of this goal depends on the build-up of practical Russian-Chinese cooperation, primarily in investment, the launch and financing a broad range of projects and broader access of products to our markets. In this context, Chinese investors could become interested in the projects in the Russian Far East that provide for creating priority development areas where foreign companies will be offered considerable benefits, including tax benefits.

Culture is another promising area of bilateral cooperation. We launched a new project in this area in 2016 – the China-Russia Media Exchange Year, which includes large themed events designed to improve information support for promising areas of bilateral cooperation, to bolster projects in the production and distribution of feature films, television series and documentaries, to expand ties in the blogosphere, etc. The success of these plans will definitely help strengthen the social foundation of Russia-China relations.

Question: What was the reason behind the drop in trade between the two countries in 2015, and what measures are being taken to remedy the situation? What is the outlook for 2016?

Andrey Denisov: Last year, bilateral trade did shrink by nearly 30 per cent in value terms, but there were objective reasons for this linked to the global circumstances and the dropping prices for mineral products, which make up the bulk of Russian exports.

Prices for oil and oil products dramatically declined, though Russian oil exports to China increased in volume. Had the oil price remained at $80 per barrel, bilateral trade would have hit the $100 billion mark.

The set practical cooperation targets can barely be achieved without diversifying the trade and economic ties between Russia and China, and this requires serious investment. The governments and departments on both sides are working to create opportunities for mutual investment.

In the current unfavourable foreign economic conditions caused by the slow recovery of the global economy and low prices for raw materials, bilateral trade totalled $19.7 billion in the first four months of this year, a 0.7 per cent increase year-on-year. The figure indicates that the trade structure is adapting itself to the changing market conditions.

Question: What breakthrough agreements can be expected from Russian President Vladimir Putin’s visit to China in June? Will any important documents be signed, and if yes – in what areas?

Andrey Denisov: Any high-level visit is an important milestone in bilateral relations. Mr Putin’s agenda in China will be busy as usual and include a wide range of issues. Our countries’ government agencies and corporate entities are working hard to prepare the visit.

As tradition has it, heads of state’s visits usually result in a joint statement, which outlines the main areas for further bilateral cooperation and common approaches of Russia and China to pressing international issues. When several political documents of the kind have to be signed, including in specific fields, the sides usually sign a package of intergovernmental, interdepartmental and corporate documents in the presence of the heads of state. Presently, intensive negotiations are taking place to draft agreements of the kind.

Question: What do you think are the chances of signing documents on the delivery of Russian gas to China via the “western route”, and have price talks been launched? Are our independent gas producers negotiating gas sales to China?

Andrey Denisov: To the best of my knowledge, Gazprom and the China National Petroleum Corporation (CNPC) continue to negotiate planned Russian natural gas deliveries to China via the “western route”. There is nothing unusual in the fact that the parties have yet to sign the contract. The conclusion of these large-scale transactions always calls for a meticulous and long-term assessment of numerous issues. For example, the Russian and Chinese companies had to sign over 10 various corporate documents in order to finalise a general contract on the eastern route. I would like to recall that Russia will annually deliver 30 billion cubic metres of natural gas to China over the next 30 years.

Russian and Chinese companies are working actively to find an optimal model of cooperation in new economic conditions. As I see it, a high-quality assessment of the ambitious project is more important that specific deadlines, so that both parties would benefit from its implementation.

Speaking of gas deliveries to China by independent producers, one should probably mention the Yamal LNG project. This is a major international project in Russia, with independent gas producer NOVATEK operating the project on behalf of Russia. The plant’s first stage is to start operating in 2017. A long-term contract worth over $20 billion for selling three million metric tons of LNG per year has already been signed with the Chinese company Petro China.

Question: What large-scale infrastructure fuel and energy projects might the recently established Asian Infrastructure Investment Bank finance? How is the construction of a pipeline, due to link Sakhalin Island with China, proceeding? Have the parties made any headway on this issue, and how are talks on channelling Chinese investment into Russian continental shelf projects progressing?

Andrey Denisov: The governance structure of the Asian Infrastructure Investment Bank is currently being established. High-priority areas of its activity, as well as principles and criteria for selecting investment projects are being decided. Therefore, it is hard to say so far what specific projects will interest the bank’s management.

I don’t conceal the fact that we hope very much that the bank’s investment will be used to develop Russian infrastructure, primarily in the Russian Far East. Now that Russia delivers most of its energy resources to the Asia Pacific region via its Far East, it would be logical to suppose that the bank’s management may become interested in the Russian fuel and energy sector’s projects. Quite possibly, the bank’s management will focus on projects linked with the development of traditional and alternative energy systems, including the modernisation of electric power stations using more eco-friendly technologies.

As far as I know, Gazprom and CNPC have reached consensus on studying the economic expediency and technical feasibility of supplying natural gas to China from Russia’s Far East. They signed a memorandum to this effect in September 2015. Corporate experts are negotiating in line with this document.

Question: In your opinion, what role does cooperation play between the two countries on global and regional issues, in particular, in the UN Security Council? How closely are Russia and China coordinating their positions on the most pressing international issues, including hot spots and North Korea? Does China, to your knowledge, share Russia’s opinion that sanctions no longer can exert pressure on North Korea? What would be China’s reaction to a new nuclear test by North Korea?

Andrey Denisov: Russia and China are coordinating closely on the most important international issues; we also cooperate in the UN Security Council and defend the central role of the UN in solving of all issues. We consider Russian-Chinese strategic partnership one of the main stabilising factors of modern international relations.

Our countries actively cooperated in drafting Security Council Resolution 2270, which was adopted in March 2, 2016 as a response to the nuclear test conducted by North Korea on January 6 and a February 7 rocket launch with the use of ballistic missile technology. This extensive document imposes binding sanctions, unprecedented in their scope and reach, aimed at preventing the further development of North Korean nuclear missile programmes. We hope that Pyongyang will abstain from new violations of Security Council resolutions that would inevitably put North Korea deeper into international isolation.

At the same time, together with our Chinese colleagues we emphasise that sanctions are not a goal in themselves, and that the only way to settle the nuclear problem on the Korean Peninsula, as well as the other related problems, are six-party talks. We are confident that only negotiations can help reach long-term peace and tranquility on the Korean Peninsula.

We also consider the inappropriate military build-up and fomenting of tension in the region under the pretense of fighting the “North Korean threat” absolutely unacceptable. We are trying to convince our partners in the six-party talks to refrain from taking irreversible steps and to put real effort in resetting the negotiations.

Question: Are Moscow and Beijing in disagreement over the Syrian settlement? Western media sometimes mention differences.

Andrey Denisov: There are no such differences. Russia and China agree that there is no alternative to settling the Syrian crisis through political channels. Believing that the future of Syria should be determined be the Syrian people, our countries totally support intra-Syrian talks under the auspices of the UN, and stand for the implementation of Security Council Resolution 2254 and other key documents, provide humanitarian aid to Syria and help combat terrorism.

At the end of April, Moscow hosted substantial consultations between Sergey Vershinin, Director of the Foreign Ministry’s Middle East and North Africa Department, and Xie Xiaoyan, Special Envoy for Syria of the Government of the People’s Republic of China. Xie Xiaoyan also met with Deputy Foreign Minister Mikhail Bogdanov. These meetings again proved that the views of our countries are very similar on the current situation and prospects for Syrian crisis settlement.

Question: Russia and China have expressed concern over US plans to deploy the Terminal High Altitude Area Defence (THAAD) systems in South Korea, arguing that this would only worsen the situation. Washington has refused to abandon its plans despite Moscow’s and Beijing’s concern. What would Russia and China do in response to this US action? Are you considering a military and political response?

Andrey Denisov: As far as we know, neither Seoul nor Washington has taken the final decision on the deployment of the US THAAD systems in South Korea. As long as there is hope, we will continue working with our American and South Korean partners to convince them that their potential decision would be counterproductive. Russia and its Chinese colleagues have said repeatedly that the deployment of an eastern segment of the global US BMD system would have a direct impact on the strategic security interests of Russia and China.

Question: How close are Russia and China on the issue of territorial disputes in the South China and East China seas? Do they see a solution, considering that the Chinese authorities have refused to take the issue to the International Tribunal for the Law of the Sea?

Andrey Denisov: Russia and China agree that such issues should be addressed by the parties that are directly involved in them and exclusively through political and diplomatic methods. We consider any attempt to internationalise such issues counterproductive.

As far as we know, China and Japan maintain contact on the situation in the East China Sea. We believe that they are fully capable of finding mutually acceptable solutions to issues of concern to them without external interference.

As for the South China Sea, we support the willingness of China and ASEAN to settle their differences without external interference and based on international law, primarily the 1982 UN Convention on the Law of the Sea. Besides, China and ASEAN signed the Declaration on the Conduct of Parties in the South China Sea (DOC) in 2002 and coordinated the Guidelines on the Implementation of the DOC in 2011. They also hold consultations on a formal code of conduct in the South China Sea. We are convinced that mutually acceptable agreements can be only formulated through negotiations.

Question: Defence Minister Sergey Shoigu said in late April that the build-up of the SCO’s military component would meet the interests of all member states. Does Beijing share this view? Does China believe that in this case the SCO could play a more active role in Afghanistan?

Andrey Denisov: To begin with, I’d like to say that the SCO is not a military political alliance or bloc, and that military cooperation within the SCO framework is focused on counterterrorism. The main forms of our military interaction are conferences of our defence ministers, meetings of our chiefs of staff and consultations between the heads of the related defence ministry departments. We regularly conduct the joint Peace Mission counterterrorism exercise. This summer it will be held in Kyrgyzstan.

In 2015, the Russian Defence Ministry proposed strengthening the military component of counterterrorism cooperation within the SCO. While working on this initiative, we proposed that a special working group be created at the SCO Council of Defence Ministers. This idea is being discussed.

We obviously need to coordinate the efforts of our defence departments. The terrorist threats in the SCO countries have increased over the past few years. Afghanistan remains the main source of threats to the SCO states. Unfortunately, the situation in Afghanistan continues to deteriorate, which is the cause of alarm for the SCO. At the same time, the SCO continues to pay priority attention to the political aspects of its efforts in Afghanistan. Last year, Moscow hosted two foreign policy and defence ministerial meetings of the SCO countries, the High-Level Conference on Security and Stability in the SCO Region in June and the International Conference on Interaction of Defence Agencies on Security in Afghanistan and Central Asia in the New Environment in October.

It is gratifying that Russia’s position on the overwhelming majority of the SCO’s activity, including military and political cooperation, is fully shared by our Chinese friends, in keeping with the spirit of Russian-Chinese strategic partnership.

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