pravda : China takes advantage of the Russian riches


Richard Moore

    Experts fear that numerous concessions to China threaten
    Russian national security


China takes advantage of the Russian riches -08/30/2005 13:32

Experts fear that numerous concessions to China threaten
Russian national security

Russian monetary authorities together with deputy chairman
of the Central Bank of Russia, Viktor Melnikov, claim that
there is no need to fear Chinese expansion into the Russian
market. "If we want to be open, then there is no point in
fearing Chinese expansion", Melnikov said in his unofficial
statement at the Third Russian-Chinese Finance and Banking
Forum in Moscow.  However, many experts do not agree and
consider numerous concessions to the Far-Eastern neighbor of
Russia threatening to national security. They are especially
worried by the free circulation of Chinese yuan introduced in
the Far East of Russia. Experts say that this will help the
Chinese to take advantage of the Russian riches. "Melnikov
does not prove his point of view. I don't subscribe to it",
famous Russian sinologist from the Institute of Asian and
African Studies in Moscow, Vilia Gelbras said in his interview

Question: Viktor Melnikov claims that there is no point in
fearing greater integration with China. How much is the
governmental policy on building economic relations with China

Answer: I think that our bankers' agreement with the free
circulation of yuan and ruble in the Far East is not a serious
decision at all. The result is that the exchange-value of
ruble is changing day in day out while yuan's value remains
the same. It has stayed at the same level for almost ten
years. Such system serves interests of China, and Russia
agreed to this for some unknown reason. There are no exchange
points in the Far East.

I do not understand at all why yuan should be an exception.
We trade in China in yuan only. It means that they should
trade in rubles here.

There is no point in discussing this when Russia has only
one representative of Chinese banking system Eluosi Bank (Bank
of China subsidiary). What is it like? It's just a small fry
that does not perform any operations here. By the way, it is
not so widely used by the Chinese tradesmen for transferring
their means to China. They use absolutely different channels
for this. And this involves quite a sum of money.

Transferring goods overseas is a special question. If you
compare data from Russian and Chinese customs, you will see
that the Chinese data exceeds the Russian ones by billions of
dollars (!) yearly.

Q: What are the prime interests of China in Russia?

A: Many things, oil, timber and metal in the first place.
These are the spheres of their interest.

Q: What about the innovations?

A: As far as technologies are concerned there are special
institutes that try to capture technological development in
Russia. Chinese invest into unfinished research to be able to
reserve the rights on the final results. They do not invest
into the initial research. It is when the research is almost
finished that they appear.

Russia is promised $12 billion of investments and the
official data, which are underestimated, say that China
invested $60 billion into other countries. At the same time UN
provides a different figure, which is several times larger.
Why invest much in Russia if China has a chance to get what it
wants cheaply or even for free. If you pay your attention to
the way the Far East is deforested, it's like a detective
story about plundering Russia.

Q: Do you think the free circulation of yuan will make this
even easier?

A: Yes. I do not understand the reasons behind the actions
of our authorities. There is no strategy of development in the
Far East and Eastern Siberia in general. No strategy. It is
hard to understand whether Russia needs these regions or
whether we are ready to reduce our territory to the Urals. By
the way, there is no strategy of development for the European
part as well. When there is no strategy banking system cannot
function properly. It cannot provide for the economic growth
and the proper coordination of different fields. In these
circumstances banking system functions without any exact goals
besides making profit. Banks and the country act separately.
There is no interplay.

Sergey Malinin

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