Chinese and Russian presidents extol good economic relations at St. Petersburg economic forum

President Vladimir Putin voiced strong criticism of the latest US trade policy measures against China, specifically citing sanctions against telecom giant Huawei as an example of economic egoism. Putin warned that the breakdown of the global order based on free trade not only threatened growth of the global economy but geopolitical stability as well. In his turn at the podium, China’s president Xi Jinping said Russia and China had reached consensus on some of the questions related to the harmonization between the Belt & Road Initiative and the Eurasian Economic Union.

The original mission of the St. Petersburg International Economic Forum was to attract Western investment to Russia, but since the war in Ukraine and annexation of Crimea, most large firms in the West have stayed away from the event. China’s unprecedented delegation this year of more than a thousand people was interpreted by Russian state media as a signal that the Russian economy is destined to be increasingly eastward-facing.

Critical assessments of the outlook for the Russian economy were offered at some side events. Alexei Kudrin, current chairman of the Accounts Chamber and former finance minister, said that Russian economic growth would remain below 2 % p.a. in coming years unless the country moves ahead with structural reforms, particularly development of an independent judiciary. Kudrin said that a survey of the Federal Security Service found that over 55 % of the firms do not trust the judiciary and 70 % consider doing business to be dangerous.