Moscow To Tap Chinese Funds to Boost Russian Economy

A file photograph of Chinese President Xi Jinping and Russian President Vladimir Putin at the State Kremlin Palace in Moscow.Reuters

Russia proposes to tap Chinese money as European and American sanctions over Ukraine threaten to push the world's largest energy producer into recession, according to two senior Russian government officials.

Moscow is looking to boost growth and funds from the world's second largest economy could find their way into a host of industries such as natural resources, housing and infrastructure construction, unnamed officials told Bloomberg.

Two government meetings are scheduled this month to set rules for Chinese investors targeting Russia, the officials said.

However, Moscow could prevent the Chinese from investing in precious metals, diamond mining and in high-technology projects. Russia will also examine ways to curb a large influx of Chinese citizens into its territory to prevent ethnic tensions, they added.

Russia's relations with China are growing steadily, despite other issues, and no "special" government meetings are being planned on China, Russian President Vladimir Putin's spokesman Dmitry Peskov told Bloomberg.

Bridge to Crimea

Moscow will float a tender to build a bridge across the Strait of Kerch to Crimea and international investors can bid for the project, Peskov said. The cost of construction, estimated at 50bn roubles ($1.4bn, £843m, €1.1bn), could rise if authorities decide to connect the bridge to a railroad.

However, the Kommersant reported that Moscow had sought Beijing's help to build a bridge to the Crimean peninsula, which Russia annexed in early March.

A 'Clinical Fact'

"It's a clinical fact" that China is heading to become the leading economy the worldover, President Putin said in his annual televised call-in show on 17 April.

Russia will develop ties with China and the two nations' union will be a "significant factor" affecting modern international relations, Putin added.

The European Union and the US have so far passed two rounds of sanctions against Russian individuals and banks. The individual sanctions consist of asset freezes and travel bans and target Russians and Ukrainians with close ties to the Kremlin.

China is Russia's largest trading partner, with $95.6bn of business in 2012, according to Bloomberg data.