14 Oct 2009

Russia and China sign trade deals

7:54 am on 14 October 2009

China and Russia have signed trade agreements worth $US3.5 billion on the second day of a visit to Beijing by Russian Prime Minister Vladimir Putin.

The BBC reports Russia is keen to bolster its economy, which President Dmitry Medvedev has said will decline by 7.5% in 2009.

Russian deputy prime minister Alexander Zhukov said about 40 contracts have been signed by businessmen and officials.

Gazprom chief Alexei Miller said a preliminary deal had also been struck on supplying 70 billion cubic metres a year of gas to China.

Mr Zhukov told reporters that the deals included two $US500 million loans from Chinese banks to Russian financial institutions.

One was from the China Development Bank to its Russian counterpart Vnesheconombank, while the other was from the Agricultural Bank of China to Russia's state-run VTB bank.

He said other deals included investments by Chinese firms in Russian construction facilities.

Trade volume up

The BBC reports trade between Russia and China has risen from less than $US10 billion to more than $US50 billion annually over the past six years.

Earlier this year, Moscow signed a $25 billion agreement to help fund a pipeline to supply oil from Siberia to China. In exchange, China was guaranteed a 20-year supply of crude oil.

Moscow is also keen to boost exports of machinery, especially aviation equipment and nuclear power plants.