DOM RF CEO Vitaly Mutko, Oleg Skufinsky, Head of the Russian Federal Service for State Registration, Cadastre and Cartography (Rosreestr), and Leningrad Region Governor Alexander Drozdenko (L-R) attend a session as part of the 2022 St Petersburg International Economic Forum (SPIEF) at the ExpoForum Convention and Exhibition Center. Photo: IC

 With the 25th St. Petersburg International Economic Forum (SPIEF), hailed as the "Russian Davos", beginning on Wednesday, Russia-China cooperation under the theme "New opportunities in a new world" came under the spotlight, as the Kremlin's interests appeared to shift toward the East in the face of mounting Western sanctions and pressure. 

As a partner of Kremlin with no limits, Beijing could see its investment "filling the vacancy" when Western businesses withdrew from the Russian market due to political tensions, and more pragmatic talks on boosting trade, facilitating logistics and advancing settlement in local currencies are expected at the forum, also the upcoming BRICS summit. 

The US-led hegemony underscored by more unilateral sanctions in pushing for a new Cold War and dividing the world's economy not only prompted Russia to "seek a way out" but also deeply hurt globalization, making more developing countries realize the importance of using multilateral organizations such as BRICS and the Eurasian Economic Union (EAEU) to enhance regional cooperation, representing an opportunity for regional growth and evolution of the world order, officials and experts said. 

A business dialogue between Russia and China was scheduled to take place on Thursday as the sideline event of the forum where speakers were expected to detail steps to improve trade and economic cooperation between the two countries, according to Russian media reports. The talk will also focus on the role of central authorities to regional administrations and companies as well as industry associations to achieving the goal of $200 billion in trade by 2024. 

The annual SPIEF is widely seen as an occasion for attracting foreign investors to Russia, with the Wall Street Journal listing past attendees including JPMorgan Chase & Co.'s Jamie Dimon and Morgan Stanley's John Mack. Amid the Ukraine crisis, this year's event appeared to be less appealing to Western investors, some reports said. For example, as of early June, about 2,700 business representatives from 90 countries were expected to attend, far below the 13,500 participants from 140 countries reported in 2021, the AP reported. 

Kremlin spokesperson Dmitry Peskov was quoted as saying in reports on Thursday that foreign investors are not only from the US and EU. Russian officials highlight other regions such as China and the Middle East.  

China-Russia ties in focus 

About 40 Chinese companies took part in the forum covering various sectors such as machinery, auto parts and industrial equipment manufacturing. Among them, about ten record annual revenues of over 20 billion rubles ($353 million) and 12 participated offline, according to chinaru.info, a Chinese site providing information on China-Russia cooperation.

Chinese President Xi Jinping will make a video address in the plenary session on Friday, along with Kazakhstan President Kassym-Jomart Tokayev and Egyptian President Abdel Fattah el-Sisi, a schedule on the Kremlin website showed. 

Xi and Russian President Vladimir Putin had a phone conversation on Wednesday afternoon, with Xi hailing the steady progress that the two countries have made in economic and trade cooperation. With the Heihe-Blagoveshchensk cross-border highway bridge opened to traffic, a new channel connecting the two countries has been created. 

As Russia actively seeks to break the Western siege in currency settlements, logistics and trade, in the short term, Chinese companies can "fill the vacancy," as Russia used to purchase in Europe and now Chinese firms can take those orders. In the long run, China's investment in Russia will expand at a fast pace, as Chinese investment comes along with technology and those in infrastructure such as gas pipeline would have a great deal of potential, Xu Poling, a researcher at the Chinese Academy of Social Sciences specializing in Russia's economy, told the Global Times on Thursday. 

"As its gas pipelines linking Europe are gradually restricted, Russia will surely expand toward the South and the East, which will be a focus of China-Russia future cooperation," Xu said. 

Putin said in his address to the forum that the Western countries' numerous mistakes in their economic policies and their illegitimate sanctions have brought a wave of global inflation, the severance of traditional logistics and production chains, growing poverty and food shortages, TASS reported. And although the country's current task is to strengthen its own economic sovereignty, Russia is not going to close and will continue its course to openness and wide economic cooperation. 

Whether it's Russia or China or organizations such as BRICS or EAEU, a consensus has emerged to enhance the cooperation mechanisms. For example, countries will accelerate yuan- and ruble-denominated currency settlements, as the process of globalization has been severely damaged by US hegemony, Wang Xianju, deputy director and research fellow at the Renmin University of China - Russia St. Petersburg State University Russian Research Center, told the Global Times on Thursday. 

"It signals a new opportunity for regional development," he said. 

BRICS Photo: VCG

New order 

A key focus of the forum this year is responding to the challenge of the times by addressing issues of economic recovery and international cooperation within the Shanghai Cooperation Organization (SCO), BRICS, and the Eurasian Economic Union (EAEU), and those multilateral cooperation mechanisms with China and Russia's key participation have been seeing an increasingly strong voice in international and regional affairs, some experts said, despite the US' continued distortion of China-Russia ties. 

In responding to the US warning that China risks ending up "on the wrong side of history" on the Ukraine crisis, Chinese Foreign Ministry spokesperson Wang Wenbin said on Thursday that China has always independently assessed the situation on the basis of the historical context and the merits of the issue. "We have always stood on the side of peace and justice," he said. 

With the US continuing to push NATO eastward, China has actively advocated a common and sustainable security concept. When the US fuelled the conflict, China has actively encouraged peace talks. People will be able to judge by themselves who is on the right side of history, Wang said. 

The BRICS mechanism offers the opportunity of taking the development needs of developing countries into account, and more efforts are needed in tackling the economic growth gap, especially in the face of global turbulence, Wang Lei, director of the Center for BRICS Cooperation Studies at Beijing Normal University, told the Global Times on Thursday. 

"The aim is not to build a closed small circle, as the spirit of the BRICS countries is to push forward openness and inclusiveness for win-win cooperation. There is no contradiction between BRICS countries promoting business ties and helping to boost a global open economy," Wang Lei said. 

In addition to digital economy cooperation, food security, macroeconomic policy coordination and public health cooperation, this year's BRICS will also focus on local currencies settlements to counter US' abuse of dollar hegemony, experts believed. 

Yang Jiechi, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee and director of the Office of the Foreign Affairs Commission of the Communist Party of China (CPC) Central Committee, on Wednesday called on BRICS countries to inject more stability and positive energy into a turbulent world.

BRICS was born in the historic tide of the collective rise of emerging markets and developing countries, and represents the direction of the evolution and adjustment of the world pattern and international order, Yang said. 

"As both Russia and China face containment by the US-led West, there could be more motivation to push the BRICS mechanism to advance facilitating trade and investment with concrete measures, which could create a more dynamic circle in boosting regional growth," Xu said.