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Russia turns to Asia as sanctions bite

Monday, October 13, 2014 - 01:47

Russian and Chinese premiers sign energy, finance and trade deals hailed by Moscow as a means to weather Western sanctions. But will they? Sonia Legg reports.

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Energy, finance and trade - deals in all three have been signed by China's and Russia's Prime Ministers. Dmitry Medvedev says they'll help Moscow weather western sanctions over the Ukraine crisis. (SOUNDBITE) (Russian) RUSSIAN PRIME MINISTER, DMITRY MEDVEDEV, SAYING: "I consider it important that, in spite of the difficult situation in investment, we are opening up new possibilities." There'll be deeper co-operation between Russia's state oil producer Rosneft and the China National Petroleum Corporation. And a closer relationship between several Russian banks and the lender China Exim. (SOUNDBITE) (Russian) RUSSIAN PRIME MINISTER, DMITRY MEDVEDEV, SAYING: "The situation in world finance is not the easiest one. Not all countries are developing fast and we have difficulties of our own. Nevertheless the major banks of our countries have reached an agreement to open credit lines for our joint projects." A local currency swap worth $25 billion was also agreed. It will allow both countries to reduce dependence on the U.S. dollar in bilateral payments. (SOUNDBITE) (Mandarin) CHINESE PRIME MINISTER, LI KEQIANG, SAYING: "This year when the situation in growth of international trade is acute and difficult the turnover between our two countries in growing dynamically. And this fact alone shows that we have huge potential for cooperation." The deals suggest Russia's decision to turn more to Asia is paying dividends. And it's no short-term fix. One accord brought a 30-year gas supply deal worth $400 billion one step closer. But CICB's Jeremy Stretch says Russia should be wary of China's motives. (SOUNDBITE) (English) CANADIAN IMPERIAL BANK OF COMMERCE, HEAD OF FOREIGN EXCHANGE STRATEGY JEREMY STRETCH: "I think that the Chinese as ever will only pursue policies that are relevant and pre-requisite for their own domestic interests first and foremost and not to help alleviate Russia per se." But motives may not worry Moscow for now. Anything which eases pressure on Russia's tumbling rouble will be welcome.

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Russia turns to Asia as sanctions bite

Monday, October 13, 2014 - 01:47