VEB and CMC pair up for Russian exporters
Russia’s Vnesheconombank (VEB) and China Merchants Capital (CMC) have signed a memorandum of understanding to jointly finance projects and create high-tech and innovation funds.
Among the funds under consideration is one that will invest in Russian companies exporting to China.
“The partnership will also offer new opportunities for VEB’s investment projects to enter the Chinese stock exchange market, and facilitate capitalisation of Russian high-tech companies,” says VEB chairman Sergei Gorkov.
Anthony Yang, general manager of CMC’s Sino-Belarus fund, comments: “Russia is an important participant in the One Belt One Road initiative. The signing of the MoU between VEB and CMC is undoubtedly fostering strategic co-operation and alignment between Chinese and Russian economies.”
China’s One Belt One Road (OBOR) initiative aims to better connect the Eurasian landmass with China. Consisting of a land and maritime branch, OBOR will boost connectivity and co-operation between China and 60 countries, and aspires to achieve annual trade worth US$2.5tn between the countries located along the route within 10 years.
China started with an investment commitment of US$40bn for OBOR and created two international banks to fund projects: the Asian Infrastructure Investment Bank (AIIB), which now has 82 countries participating, including several European countries; and the Brics’ New Development Bank.
Chinese spend so far is quoted close to US$1tn, with China saying it expects to spend a cumulative US$4tn.
Historically, Russia and China have treated each other with mutual suspicion and as geopolitical competitors, particularly in relation to influence over their shared backyard, Eurasia. However, when the West turned its back on Russia with sanctions following the Ukrainian crisis, Moscow pivoted to the East.
CMC is part of China Merchants Group, which has participated in the construction of a number of business accelerators and innovation development zones in China. It manages more than US$35bn in about 30 funds.
The company’s strategy aims at promoting restructuring of the Chinese economy in industry, transport infrastructure, real estate, high technologies, agriculture, engineering and energy development sectors.take me back