Question: This year marks 70 years since the victory over Nazism in World War II. Both your father and the father of China’s President Xi Jinping fought in that war. Your memories of the war are both your personal, family memories and the memories of the whole nation. After Xi Jinping’s spring visit to Moscow to attend the events commemorating the 70th anniversary of Victory in the Great Patriotic War, you will make a visit to Beijing to attend the grand military parade marking the victory in the War of Resistance against the Japanese invaders. What do you think is the importance today of commemorating the victory in WWII and those historic events? What is your assessment of the contribution of the Chinese people’s War of Resistance against the Japanese invaders to the overall victory against Nazism?
President of Russia Vladimir Putin: True, for Russia and China this Victory anniversary has a special significance. The Soviet Union achieved it through enormous sacrifice. The people of China also bore great losses. We will never forget heroism, courage and spiritual strength of the generation of victors. We will forever remember the fallen and honour the veterans.
Our two countries were allies in the fight against Nazism and Japanese militarism and bore the brunt of the aggression, and they not only withstood this battle, but won it, liberating enslaved peoples and bringing peace to the planet.
Such mutual support between the Soviet and the Chinese people in those years of trial, our common historical memory serve as a strong foundation for present-day relations between Russia and China.
Today, both in Europe and in Asia, we witness the attempts to falsify the history of World War II, to promote loose and distorted interpretations of the events that are not based on facts, particularly events of the pre-war and post-war periods. Efforts by certain countries to glorify and exonerate war criminals and their henchmen are an outrageous flouting of the Nuremberg and Tokyo trials. This is an outright insult to the memory of millions who fell in the war. The goal of such historical speculations is obvious: they are used in shady geopolitical games with the purpose of sowing feud between countries and peoples.
Russia and China maintain similar views on the causes, history and results of World War II. For our peoples its memory and its lessons are sacred. This tragic past is an appeal to our common responsibility for the fate of the world, to the realisation of the terrible consequences a destructive ideology of personal exclusiveness and all-permissiveness could lead to. These are the ideas that Nazism and militarism thrived on. It is our duty to prevent their revival and spreading.
Therefore, it is extremely important that our two countries are united in their striving to further preserve historical truth and defend our common Victory. Our joint celebrations of the 70th anniversary of Victory in World War II clearly illustrate this commitment of ours.
Question: In the past years, the situation in the world has been full of dramatic developments and changes, certain tendencies being rather alarming. How do you see relations between Moscow and Beijing in the current international situation? Can Russia and China assist in building a new world order and if so, what should it be based on, in your view?
Vladimir Putin: Unfortunately, the international situation is growing increasingly unpredictable. The creation of a new polycentric model is accompanied by growing regional and global instability. The main reason for such a tense and complicated situation is the deficit of attempts to reach compromise.
Inter-civilizational and inter-religious controversies fail to reach a stable solution. The global economy is yet to enter the stage of its stable development. Among the endemic problems is the persistent desire of certain states to retain their dominance in global affairs at any cost. While declaring norms of democracy, supremacy of law and human rights in their own countries, they ignore the same on the international arena, actually denouncing the principle of sovereign equality of all states laid down in the UN Charter.
In these complicated conditions, Russian-Chinese cooperation takes on a new meaning in terms of maintaining and strengthening global and regional stability and security and finding effective response to global challenges.
Russian-Chinese ties have now probably reached a peak in their entire history and continue developing. The partnership between Russia and China is based on sincere friendship and sympathy between our peoples, on deep respect and trust, consideration for each other’s key interests and commitment to make our countries flourish.
It is in this vein that we work together in the UN, the G20, as well as within BRICS and the SCO, which have successfully held their summits in Ufa this July. The Russia-China connection played an important part in resolving such acute issues as the withdrawal of chemical weapons from Syria and an agreement on Iran’s nuclear programme.
Russia and China are priority partners in promoting the principles of building an architecture based on inseparable security and cooperation in the Asia-Pacific region, in strengthening trust in space exploration and ensuring global information security.
Expansion of the Russian-Chinese partnership meets the interests and strategic goals of our two countries. This is what guided us when we adopted in May the current Joint Declaration on cooperation in coordinating development of the Eurasian Economic Union and the Silk Road Economic Belt. This is the beginning of a process of coordinating our long-term development priorities to give a strong impetus to economic activity on the vast expanses of Eurasia.
Question: Trade and economic relations between Russia and China are generally on the rise, though Western anti-Russian sanctions negatively affect the bilateral trade. Can the countries achieve the target of doubling trade turnover they have set for themselves earlier? What areas do you consider most promising here?
Vladimir Putin: China is our key economic partner. In the past years, we have managed to make significant progress in all areas of economic and production cooperation.
I would not agree that the illegitimate restrictions imposed by certain Western countries against Russia have a negative impact on Russian-Chinese economic cooperation. On the contrary, this encourages our domestic business to develop stable business ties with China.
Since 2010, China has been Russia’s leading trade partner. In 2014, despite unfavourable trends in global economy, we managed to maintain our trade turnover, which reached around $88.4 billion.
Energy remains the key area here. Our countries are consistently moving towards the creation of a strategic energy alliance that, I am sure, will play a significant role in international economic relations.
In 2014, we made a real breakthrough in gas industry. In May of last year, during my visit to China, we signed a contract for annual supplies to China of 38 billion cubic meters of natural gas. It will be shipped via the ‘eastern’ route for 30 years. To implement the project, we have already launched the construction of the Power of Siberia gas pipeline. In May of this year, we reached initial agreement on the ‘western’ route, with anticipated exports of 30 billion cubic meters a year. The implementation of these large-scale projects is our absolute priority for the near future.
We are also making significant progress in other areas of energy cooperation. We have built and began operating an oil pipeline from Russia to China, we signed agreements to increase oil shipments, created joint ventures to explore and produce oil in this country. Chinese companies have joined gas projects on the Russian Arctic shelf and the Sakhalin shelf. There are good prospects for joint development of coalfields in the Far East.
Nuclear energy cooperation is also developing rapidly. The first and second power units of the Tianwan Nuclear Power Plant, built by Rosatom, are demonstrating the best efficiency and security among all the nuclear power plants in China. We are currently involved in the construction of the third and fourth power units of the station, to be commissioned in 2018. As you can see, Russian-Chinese energy cooperation has great potential.
I consider the development of high-speed railway transport one of the most promising areas. We have already agreed on the parameters of joint funding for the construction of a high-speed route between Moscow and Kazan, and the amount of investment to be provided by our Chinese partners and us will exceed 1 trillion rubles. We expect to have the new route running by 2020, for it to become a model project of Russian-Chinese transport and infrastructure cooperation.
Cooperation in aerospace and space rocket industries is of great significance for both our countries. We have already agreed on the joint creation of a wide-bodied long-range jumbo jet and a heavy helicopter, as well as on a number of other joint programmes.
China’s participation as a partner country in the INNOPROM 2015 International Industrial Fair in Yekaterinburg gave a new impetus to close cooperation in science, technology and production.
Both Moscow and Beijing are set to intensify our financial partnership, including mutual settlements in national currencies. We plan to expand interregional ties and cross-border cooperation, increasing their practical effect and improving cross-border transport infrastructure.
Question: Russia has taken a number of measures lately to boost the development of its regions in the Far East, including, in particular, the creation of a free port in Vladivostok. In Ufa in July, you also welcomed the participation of Chinese companies in the development of the Russian Far East. What do you think are the opportunities for Russian-Chinese cooperation here? How does Russia intend to attract Chinese investors?
Vladimir Putin: True, the development of Siberia and the Far East is our national priority for the entire 21st century. We have already made a number of significant steps to resolve this grand-scale task. We are actively implementing a programme of socioeconomic development of the Far East and the Baikal region, which includes dozens of major investment projects, including the construction of the Power of Siberia gas pipeline, Vostochny space launch centre, gas refining and gas chemical projects planned by Gazprom and Sibur, modernisation and expansion of the Baikal-Amur and Trans-Siberian mainlines, and the Zvezda shipyards.
Of course, Russia is interested in attracting foreign, including Chinese investors to participate in the implementation of these projects. The Federal Law On Priority Development Areas in Russia has created a new instrument both for the country in general and for the Far Eastern regions, where we have already created 9 such areas.
Priority development areas, along with special economic zones, should become the ‘locomotives’ of economic transformation in the Far East, sort of clusters that attract and accumulate investment and technology. Major tax incentives and simplified business procedures help create on these territories favourable conditions for investment and business regardless of the country the capital comes from.
Resident companies will enjoy the following benefits: zero profit tax, property tax and land tax for the first 5 years; zero import and export customs duty; subsidies on loans, special rates on rent and simplified state and municipal control procedures. For 10 years after obtaining a Priority Development Area (PDA) resident status, businesses will make lower insurance payments (7.6 percent instead of 30). Value added tax on imports for refining will also be zero.
However, stimulation measures are not limited to this. National and foreign companies will enjoy mineral extraction tax holiday: reduction factor (between 0 and 0.8 percent) will be applied for 10 years. Administrative barriers will be minimised. Most importantly, the state undertakes to create the necessary infrastructure. The Russian Government estimates that total investment in the first three priority development areas alone will constitute over 50 billion rubles. The federal budget is also allocating significant funds for their development – about 7.5 billion rubles.
Just as large-scale changes are in store for investors in the south of Primorye Territory, where we are introducing a free port regime that would cover all the key ports from Nakhodka to Zarubino, including Vladivostok, of course. The law on free port will come into effect in October 2015. Here we intend to introduce significant tax preferences – up to zero rate on certain taxes. The business environment is being simplified to the maximum, including in capital construction, and we are actually introducing a visa-free regime for foreign citizens. A free customs zone procedure will also be in place on the territory of the free port, which actually means duty-free import of foreign goods.
I am convinced that these new opportunities will draw the interest of investors from China and a number of other Asian countries to the implementation of our plans. Moreover, a number of major companies have already put forth specific investment projects. Thus, our Chinese partners are ready to invest over 100 billion rubles into the construction of an oil refinery and a clinker plant in Amur Region, Nizhneleninskoye–Tongjiang and Blagoveshchensk–Heihe bridges, and a metallurgical plant and a brick factory in Yakutia.
Question: In May, you signed an Executive Order on the annual Eastern Economic Forum in Vladivostok. What do you expect from it? What did your regional partners think of this idea?
Vladimir Putin: The St Petersburg International Economic Forum held in June demonstrated that, despite the sanctions imposed against Russia that hinder the development of quality economic cooperation, the interest in this country among foreign business circles has grown. More than 10,000 participants from 120 countries came to the forum. Therefore, we have no doubt that the first Eastern Economic Forum to be held in Vladivostok on September 3–5 will also attract our foreign partners, primarily those in the Asia-Pacific region.
The main purpose of the forum is to position Russia as an active participant in economic and integration processes in the Asia-Pacific region and to present specific projects to investors for joint implementation. Business circles in India, Vietnam, South Korea, Japan, Singapore and some other countries geographically not belonging to the region are already showing interest in the forum.
We highly value our Chinese partners’ intention to send a strong delegation that will include businessmen from over a hundred leading energy, mining, transport, agricultural, machine building and other companies, as well as representatives from major financial institutions, the central authorities and governors. We expect them to be especially active at the forum.
Question: You said earlier that you have special feelings for China. Since you were elected for your first term as President in 2000, you have now visited China as the Russian leader 13 times. What changes that you noticed during those visits impressed you most? What do you think about China’s development?
Vladimir Putin: As you have fairly noted, I was lucky to watch China ‘on the move’ over a number of years. With every visit, I noted that your country was growing more economically powerful, achieving new targets in building a modern infrastructure and in social development.
At the same time, China is showing great care for its cultural and historic traditions. Everyone who visits your wonderful country feels this practically everywhere. Cultural heritage sites are of special importance, reflecting the full measure of the ancient Chinese civilisation. My trip to the Shaolin monastery during my visit in 2006 was unforgettable.
The development road China has covered over these years is a path of successful economic reform and wise social policy. This experience is of great value for us. Therefore, even with all the differences between Russia and China, we are facing common development targets, such as changing the structure of the economy to favour high technology sectors. Russia and China also have very similar industrial priorities: these are nuclear energy, space exploration, new information technologies, environmental protection, energy saving, production of high technology medicines and medical equipment, and some other.
Our two countries have an enormous potential for closer business cooperation and active humanitarian ties. More importantly, we are prepared to make use of all these opportunities; we see mutual interest and trust between us grow and friendly ties become stronger. There is a lot we can achieve on this basis. And I am sure we will.