By Megan Davies and Gleb Bryanski
MOSCOW/NOVO-OGARYOVO, Russia, April 27 (Reuters) – Russia
and China will announce progress on a joint investment fund
during a visit by the man expected to be China’s next premier,
while their leaders hinted on Friday at differences behind a
show of amity and common ground on global issues.
Chinese Vice Premier Li Keqiang, who is on track to succeed
Premier Wen Jiabao this autumn, met Russian President-elect
Vladimir Putin and outgoing President Dmitry Medvedev during a
trip that will also take him to Hungary and Belgium.
Progress raising capital for a $4 billion fund seen as a
boon for Russia’s efforts to attract Chinese investment is to be
announced at a conference attended by Li on Saturday.
Plans for the fund – a venture between sovereign wealth fund
China Investment Corp and a Russian state vehicle – were
announced in October and it is expecting to clinch its first
deal in the summer.
“We see an opportunity to expand (the fund) because of other
(investors around the world) exhibiting interest in
participating,” Kirill Dmitriev, CEO of the Russian Direct
Investment Fund told Reuters in an interview on Friday.
The fund plans to announce that the venture will finalise
its ‘first closing’ with $2 billion raised in June, said
Dmitriev. “In June we will form it, and then in July/August we
will do the first deal.”
The Russian Direct Investment Fund was created to give major
foreign investors greater comfort in Russia’s uncertain business
environment and is investing with private equity, strategic
investors and sovereign wealth funds.
Dmitriev said he anticipates it will take about 18 months to
expand the Russian-Chinese investment fund to $4 billion, with
the balance of the capital raised from external investors
in c luding others from China.
It is expected to invest 70 percent of its funds in Russia
and up to 30 percent in China, he said, adding that “the
pipeline of potential deals for this fund includes industries
such as forestry, machinery (and) logistics.”
Li held separate talks with Prime Minister Putin and
Medvedev, who are to trade places next month. In power since
2000, Putin won a March presidential election and will be sworn
in to a six-year term on May 7.
UNEASY FRIENDS
Russia and China, veto-wielding permanent U.N. Security
Council members, use their clout to blunt U.S. power. They have
moved in lockstep on Syria, vetoing a Security Council
resolution that would have called for President Bashar al-Assad
to cede power but supporting Kofi Annan’s peace plan.
At the same time, they compete for influence in Central Asia
and struggle to hash out differences over energy supplies
despite an apparent natural fit between Russia and the world’s
fastest growing energy consumer.
Meeting at Putin’s residence outside Moscow, he and Li
called the nations close friends but hinted at differences.
Li said through a translator that the “road is not always
even but I am sure that as good friends, neighbours and partners
we will always be able to find a solution and achieve success.”
Putin said that “as always in the course of big work there
are issues which require additional attention, but we have
learned to do it the way close friends do. We are looking for
compromises and are finding them.”
Talks on Russian pipeline gas supplies to China fell apart
late last year when China opted for additional deliveries from
Turkmenistan, a rival producer in Central Asia, after years of
stalemate over price.
Russia, in turn, is now shifting the focus of its Asian gas
strategy toward liquefied natural gas, which is more expensive
to deliver but can be sold to any buyer, unlike pipelines which
bind seller and buyer.
The CEO of Russian gas monopoly Gazprom met
China National Petroleum Corp (CNPC) chairman Jiang Jiemin in
Moscow to discuss oil and gas supplies to China among other
things, Gazprom said, but no agreements were announced.
Meeting Medvedev, Li said it was on his first visit to
Russia since he joined China’s national government in 2007 and
praised “colossal changes for the better”, saying he had seen
“new Russian cities and towns” from his airplane window.
Putin has shrugged off warnings from politicians and
analysts that faster-growing China may be a threat to Russia.
In an article in February, he said China is less aggressive
globally than the United States and that “the growth of China’s
economy is not a threat at all but a challenge that carries with
it a colossal potential for business cooperation.”
