In search of growth in trade with China, decided to sell the ore deposits of the Far East?
At the end of last year, the General Administration of Customs of China published information on the dynamics of trade with the main economic partners. If you believe the statistics of the Chinese Ministry, Russia in the list of China’s trading partners dropped to 15, reducing its share in the total pie of Chinese trade and economic relations to 55 billion dollars (slightly more than 1,7% of the total figure for China). The total decline in comparison with 2014 year was more than 29%. And this is against the background of the fact that even in 2014, Russia and China had already predicted in the near (at that time) time “breaking through” the mark in 100 billion dollars in trade turnover.
If we talk about the top three in terms of trade with China, it is the United States (460 billion dollars), Japan (227 billion dollars) and South Korea (223 billion dollars). Western expert associations are included in the leaders in partnership with the PRC Hong Kong, but China considers this territory to be associated, and therefore does not mention it in terms of reflecting indicators of foreign trade.
Russian analytical agencies almost 30% decline in volumes of Russian-Chinese trade confirm, however, adding that you need to first pay attention not to the dollar equivalent, but to the volume of trade interaction, if I may say so, in physical terms. More than a significant decline in dollar terms is clear: the Russian ruble exchange rate has declined against the dollar, which contributed to the estimates of the level of trade. However, the "natural expression" also shows a negative trend. Of course, not the same 29%, but also quite noticeable - almost 11%. For countries with such resource (in every sense of the word) base and with such potentials, losing 11% of “natural” turnover and mutual investments is an unaffordable luxury, especially in conditions of ongoing economic turbulence.
At the 2 Russian-Chinese business forum of small and medium-sized businesses that took place not so long ago, the question of a return to a sustainable growth in mutual investments was also raised. Considering the fact that the forum was organized by the Ministry of Economic Development of Russia, the goal of turning the dynamics in trade relations with the PRC was the main one. Yes, and in the agenda of the forum, the goals were outlined without any floridity and the ornate refinements inherent in the Eastern mentality. From materials Forum (about goals):
development of a direct platform of direct contacts between representatives of business circles of the Russian Federation and the People's Republic of China and organizations involved in creating a favorable business environment, as well as creating positive conditions for developing cooperation between small and medium businesses of the two countries, including practical tools and interaction mechanisms, presentation of investment projects .
And this is a list of topics that representatives of Chinese business circles expressed interest in:
joint development of agriculture,
joint projects in the media,
joint projects in the oil industry,
joint projects in the field of machine tools,
joint projects in the production of spare parts for motor vehicles,
projects in the field of high technologies,
joint projects in the field of electronics,
joint energy projects.
The week had hardly passed since the end of the business forum, as it was announced that a large Chinese investor was going to Russia. If this material was interrupted, then everything would look quite good: against the background of a fall in commodity turnover, the business communities of the two countries decided to take the economic bull by the horns and redraw the system of relations to resume sustainable investment growth. Won - and the investor immediately showed interest ...
However, the material continues, and the information received about the arrival of an investor from the PRC clearly needs further consideration and clarification. The fact is that this investor is not just an investor, but a whole investment fund - Highland Fund. And this foundation is not something that would go to Russia, walked and finally reached today ... The zest is that Highland Fund in Russia, he decided to implement the project back in 2015, but then his application was immediately sent to the FAS for "careful consideration". The reason for this consideration is related to the desire of the Chinese investment partnership to buy a part of the shareholding in the Bystrinsky gold-copper-iron-ore (universal) deposit. The expected annual production of this deposit is about 66 thousand tons of copper, 2,5-3 million tons of iron ore concentrate, 7-8 tons of gold and 35-36 tons of silver. The total capacity is about 10 million tons of ore annually. With this level of production, the field will last for about 30 years. The owner of the field is the Russian giant Norilsk Nickel (co-owner of Norilsk Nickel itself, as we know, Vladimir Potanin).
And so, after the mentioned Sochi forum, the FAS decided that there were no violations when buying the 13% of the Russian deposit by the Chinese, and that it was necessary to sell ... And not even 13%, but already, as it turns out, more.
It is noted that immediately after the transaction, the Chinese fund will have the opportunity to bring its stake to 20% and at the same time become a shareholder in the Norilsk Nickel partner in Bystrinsky, which gives additional opportunities and guarantees. According to Potanin, this will enable the project to enter the Chinese stock exchanges.
And then there are questions. According to the Chinese classification, such investments are regarded as medium business. Returning to the forum held in Sochi, it is worth noting that there was nothing about the subsoil use in the list of points in which the guests from the PRC were interested. Or is the project of selling to Chinese investors shares of a large field in the Gazimuro-Zavodsky district of Transbaikalia somehow falls under the status of "high technology" technologies?
The question is also why it was necessary to sell a foreign company (even if it was a hundred times investment) one of the most promising assets of Norilsk Nickel with an EBITDA margin of 50% (an indicator equal to the amount of profit before deducting expenses for all interest, taxes, and accrued depreciation)? And selling at the moment when there were several months left before the launch of the GOK ... The Chinese, as already noted, submitted an application as early as December, but while it was being considered by the FAS, the infrastructure continued to be built with domestic funds, and both as private funds (Norilsk Nickel invested about 8 billion rubles), and on public - the partnership in this case, the private-public. In general, we reached the moment when we sell on a silver platter. Or does the “all the best for partners” logic work again?
Although it is possible to ask questions and be surprised at individual decisions, but in any case it will be announced that all this is for the economic benefit of Russia and the Russian people proper. Well, not the Chinese ... Now and in the FAS agree ...
It turns out that the growth point of trade with China was discovered - the sale of mineral deposits to Chinese companies ... If we could stop at the announced 13,3%, this would not be the most deadly option, but would it be enough to stop if new "science-intensive" proposals were received from partners? ..
If we talk about the top three in terms of trade with China, it is the United States (460 billion dollars), Japan (227 billion dollars) and South Korea (223 billion dollars). Western expert associations are included in the leaders in partnership with the PRC Hong Kong, but China considers this territory to be associated, and therefore does not mention it in terms of reflecting indicators of foreign trade.
Russian analytical agencies almost 30% decline in volumes of Russian-Chinese trade confirm, however, adding that you need to first pay attention not to the dollar equivalent, but to the volume of trade interaction, if I may say so, in physical terms. More than a significant decline in dollar terms is clear: the Russian ruble exchange rate has declined against the dollar, which contributed to the estimates of the level of trade. However, the "natural expression" also shows a negative trend. Of course, not the same 29%, but also quite noticeable - almost 11%. For countries with such resource (in every sense of the word) base and with such potentials, losing 11% of “natural” turnover and mutual investments is an unaffordable luxury, especially in conditions of ongoing economic turbulence.
At the 2 Russian-Chinese business forum of small and medium-sized businesses that took place not so long ago, the question of a return to a sustainable growth in mutual investments was also raised. Considering the fact that the forum was organized by the Ministry of Economic Development of Russia, the goal of turning the dynamics in trade relations with the PRC was the main one. Yes, and in the agenda of the forum, the goals were outlined without any floridity and the ornate refinements inherent in the Eastern mentality. From materials Forum (about goals):
development of a direct platform of direct contacts between representatives of business circles of the Russian Federation and the People's Republic of China and organizations involved in creating a favorable business environment, as well as creating positive conditions for developing cooperation between small and medium businesses of the two countries, including practical tools and interaction mechanisms, presentation of investment projects .
And this is a list of topics that representatives of Chinese business circles expressed interest in:
joint development of agriculture,
joint projects in the media,
joint projects in the oil industry,
joint projects in the field of machine tools,
joint projects in the production of spare parts for motor vehicles,
projects in the field of high technologies,
joint projects in the field of electronics,
joint energy projects.
The week had hardly passed since the end of the business forum, as it was announced that a large Chinese investor was going to Russia. If this material was interrupted, then everything would look quite good: against the background of a fall in commodity turnover, the business communities of the two countries decided to take the economic bull by the horns and redraw the system of relations to resume sustainable investment growth. Won - and the investor immediately showed interest ...
However, the material continues, and the information received about the arrival of an investor from the PRC clearly needs further consideration and clarification. The fact is that this investor is not just an investor, but a whole investment fund - Highland Fund. And this foundation is not something that would go to Russia, walked and finally reached today ... The zest is that Highland Fund in Russia, he decided to implement the project back in 2015, but then his application was immediately sent to the FAS for "careful consideration". The reason for this consideration is related to the desire of the Chinese investment partnership to buy a part of the shareholding in the Bystrinsky gold-copper-iron-ore (universal) deposit. The expected annual production of this deposit is about 66 thousand tons of copper, 2,5-3 million tons of iron ore concentrate, 7-8 tons of gold and 35-36 tons of silver. The total capacity is about 10 million tons of ore annually. With this level of production, the field will last for about 30 years. The owner of the field is the Russian giant Norilsk Nickel (co-owner of Norilsk Nickel itself, as we know, Vladimir Potanin).
And so, after the mentioned Sochi forum, the FAS decided that there were no violations when buying the 13% of the Russian deposit by the Chinese, and that it was necessary to sell ... And not even 13%, but already, as it turns out, more.
It is noted that immediately after the transaction, the Chinese fund will have the opportunity to bring its stake to 20% and at the same time become a shareholder in the Norilsk Nickel partner in Bystrinsky, which gives additional opportunities and guarantees. According to Potanin, this will enable the project to enter the Chinese stock exchanges.
And then there are questions. According to the Chinese classification, such investments are regarded as medium business. Returning to the forum held in Sochi, it is worth noting that there was nothing about the subsoil use in the list of points in which the guests from the PRC were interested. Or is the project of selling to Chinese investors shares of a large field in the Gazimuro-Zavodsky district of Transbaikalia somehow falls under the status of "high technology" technologies?
The question is also why it was necessary to sell a foreign company (even if it was a hundred times investment) one of the most promising assets of Norilsk Nickel with an EBITDA margin of 50% (an indicator equal to the amount of profit before deducting expenses for all interest, taxes, and accrued depreciation)? And selling at the moment when there were several months left before the launch of the GOK ... The Chinese, as already noted, submitted an application as early as December, but while it was being considered by the FAS, the infrastructure continued to be built with domestic funds, and both as private funds (Norilsk Nickel invested about 8 billion rubles), and on public - the partnership in this case, the private-public. In general, we reached the moment when we sell on a silver platter. Or does the “all the best for partners” logic work again?
Although it is possible to ask questions and be surprised at individual decisions, but in any case it will be announced that all this is for the economic benefit of Russia and the Russian people proper. Well, not the Chinese ... Now and in the FAS agree ...
It turns out that the growth point of trade with China was discovered - the sale of mineral deposits to Chinese companies ... If we could stop at the announced 13,3%, this would not be the most deadly option, but would it be enough to stop if new "science-intensive" proposals were received from partners? ..
- Alexei Volodin
- http://russia-china-forum.ru
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