China And Russia Collaborate To Launch Yuan-Based Fund
China and Russia have reportedly agreed to collaborate to roll out a joint fund in Russia that will be based on the Chinese Yuan. This is the growing relationship between the two countries amid the ongoing trade war between China and the U.S.
The deal is one of the 30 or so agreements that have been expected from the trade and economic talks between China and Russia during Chinese President Xi Jinping's visit to Russia. The new Yuan-based fund will be launched under the Russia Direct Investment Fund (RDIF), and the role of the fund will be to offer finance to some Siberian projects.
"The Fund will engage in the implementation of strategically important investment projects, focused on the Central Federal District, the Far East of Russia and the north-eastern part of China,” stated RDIF head Kirill Dmitriev.
Photographer: Sasha Mordovets/Getty Images
The Yuan-based fund is expected to be unveiled during the St Petersburg International Economic Forum which is scheduled to take place between June 6 and June 8. Russian President Vladimir Putin will chair the forum while Xi Jinping will be in attendance.
The fund is also expected to facilitate stronger economic ties by facilitating settlements using national currencies. The fund represents a strong regional partnership between Russia and China.
The China-Russia Regional RMB Fund is the first fund of its kind between the two countries. RCIF Chairman Bing Hu described the upcoming fund as a great example of a bilateral, regional partnership that aims to facilitate regional economic progress. It also serves as a building block for a strong relationship between Russia and China at the time when the relationship between China and the U.S. is hanging on a thread due to the ongoing trade standoff.
The fund will strengthen major aspects of the China-Russia relationship
Sources familiar with the development revealed that China-Russia Regional RMB Fund would at first have about 1 billion yuan, which is equivalent to USD 150 million. However, there are plans to boost the fund to about 6 to 7 billion yuan. The RDIF released a statement saying that the two countries are focusing on key areas of their partnership.
The report also revealed that they are evaluating various investment opportunities within the scope of healthcare, industrial manufacturing, natural resources, and financial services.
The partnership between the two countries is also focused on supporting Russia's investment and technology development strategy. China has also been facing some development challenges, especially the lack of seaport access.
China and Russia have been working together to build the Primorye 1 Corridor, which will connect Heilongjiang to the Pacific through the Vladivostok Port in Russia. Meanwhile, Russia has also been holding talks with North Korea regarding plans to build a second bridge over the Tumen river.
China and Russia recently completed the first bridge that connects the two states through river Amur. They plan to open the bridge in the next few months. Both countries expect the China-Russia Regional RMB fund to help cater to the regional needs while at the same time facilitating development in areas that are been neglected.