Anti-Sanctions? Putin Lifts "Limits" And China Agrees To Increase Investment In Russia

Tyler Durden's picture

As Putin warned earlier in the week, they do not see the effectiveness of sanctions; but it seems he had something else in mind. By rolling back informal limits on Chinese investment, Putin has opened the door for significant capital inflows from his new best friend... and China has already agree to increase investment. While Putin is careful to note that the Chinese will not be allowed to invest in gold or diamond mining, or hi-tech projects, Russia hopes to lure cash from the world’s second-biggest economy into industries from housing and infrastructure construction to natural resources. Chinese President Xi Jinping and Russian President Vladimir Putin will meet in Shanghai May 20/21 and Chinese officials have already confirmed bilateral cooperation in the areas of investment and finance has made major progress as local currency settlement in two-way trade increases. Forget sanctions, just remove the US from the world trade equation...

As Bloomberg reports, Russian President Vladimir Putin plans to open the door to Chinese money as U.S. and European sanctions over Ukraine threaten to tip the economy into recession, according to two senior government officials.

The move would roll back informal limits on Chinese investment as Russia seeks to stimulate growth, said the officials, who have direct knowledge of talks and asked not to be identified as the information isn’t public. The government wants to lure cash from the world’s second-biggest economy into industries from housing and infrastructure construction to natural resources, they said.


The Chinese won’t be welcome in all areas: Russia plans to set “red lines” around significant gold, platinum-group metals, diamond mining and high-technology projects, the officials said.




Putin’s decision, coming as competition from U.S. and European financing slows, may offer China a good opportunity to gain access to Russia’s economy. Existing resource projects will probably be more appealing than starting from scratch, Moscow-based George Buzhenitsa, Deutsche Bank AG analyst said by phone on May 7.




“Given that China has a shortage of raw materials from iron ore to coal to copper, it may be extremely interested in gaining access to such projects in Russia,” Buzhenitsa said.

And China seems more than willing to step up...

China is ready to join with Russia to increase two-way investment, Chinese Vice Premier Zhang Gaoli said here Thursday.




Their talks were focused on bilateral investment and practical cooperation in the financial area, in preparation for the forthcoming meeting between the two heads of state.


Chinese President Xi Jinping and Russian President Vladimir Putin will meet when Putin attends the Fourth Summit of the Conference on Interaction and Confidence Building Measures in Asia (CICA), on May 20 and 21 in Shanghai.


Zhang said bilateral cooperation in the areas of investment and finance has made major progress. China has increased investment in Russia and become the country's fourth largest source of foreign direct investment.


He said financial cooperation between China and Russia is growing as local currency settlement in two-way trade increases and consultations on a package of currency swaps are on-going.


Zhang expressed the hope that the two sides increase mutual investment via the China-Russia investment fund and carry out the first batch of investment projects as planned.


He said the two sides should increase investment in the forms of greenfield investment, equity investment, bond issuance and mergers and acquisitions.


Zhang asked the Russian side to help Chinese enterprises to invest in special economic zones in the Far East region of Russia.

Who needs sanctions when China is your friend? And it would seem no matter what card the US tries to play, Putin has a trump (for now).

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bag holder's picture

<-- Rooskies up to their old tricks

<-- Rootin' for Putin

kashey's picture

in Ukraine US-backed neo-fascist government troops yesterday terrorized city of Mariupol, killed about 40 unarmed civilians who protested against fascism. Neo-fascist government troops also stormed and burnt local police department after police officers refused to arrest and suppress peaceful anti-fascist demonstration on Victory day (in former USSR celebrated on May, 9).

TBT or not TBT's picture

Another kleptocrat fellating thread. Russia and China are.both authoritarian dictatorships atop very sick societies.

kashey's picture

More or less, but the difference between us is that we don't fool ourselves about societies and state we live in, but you in the West are so much brainwashed to think you're somehow better a country, a society, a person. You are powerless zero in terms of defining your life.

TBT or not TBT's picture

You may call me a dreamer, but I'm not the only one. A lot of us still believe in the invisible hand of the market to define the possibilities of our lives rather than control freak central planner psycho overlords.

BlindMonkey's picture

That is an adorable sentiment. Let's run up the fallacies shall we? NDAA unlimited detentions at the whim of the executive, Too Big To Prosecute banks, people and companies, student loans turning the young into debt serfs, an unpayable national debt, a national spy apparatus that is unimaginable in scope, etc.

The invisible hand of the markets here doesn't exist either. It has been replaced with your aforementioned control freak psychology overlords. I am sorry to be the bearer of bad news here. I wish it wasn't so myself.

jeff montanye's picture

p.s. and screw him for alluding to lennon's imagine which is diametrically opposed to the sentiments he claims.  p.s. and he didn't do it ironically.  

UselessEater's picture

wasn't lennon executed for wanting come clean on revealing the Tavistock-ish shite that paved the way for the beatles, drug culture and so-called drug-free sex revolution of the later part of his era funded as we know by the usual suspects funding womens lib....


old naughty's picture

they say money is the lifeblood that must be kept flowing to the matrix mind, just like blood to human hearts.

so, put-in is only keep the "pump" going, no?

Anusocracy's picture

Government has been growing in size and scope for thousands of years.

It will stop expanding when it reaches world governance and at that stage there will be nothing able to resist it. Currently, with hundreds of nations, it is possible to find some relief from total control. Not so under a world government.

I despise all governments but those of the West the most - they are far closer to a world government.

RumCurrency's picture

We have a one world government now.  The US took the reigns after WWII.  Just as the Greeks once ruled, then Romans, and more recently the British empire.  Once one empire falls, another one simply emerges to fill the power vacuum, after a huge death toll of course.  Right now, China and Russia are at the frontiers of the US empire.  When the empire does inevitably start to falter (perhaps it already has), they will be the barbarians at the gate, so to speak.

rocker's picture

America's Big Money wants to make crap in China and sell the same here at thieving prices. Margins are so high on China made crap that it makes the Oil Price Sham look trivial. It does have consequences to China's environment though. Of which the people themselves finally have had enough. I always believed that America's Big Money wants it both ways but are now realizing their exploitation is going to be at our people's demise. Although the Big Money will not suffer at all. They did drain the most from the sheeple and left them with debt. Even the Banksters dumped their debt on the people. It takes a simple mind to believe that Russia is defenseless and helpless as only America believes. Must be too much MSM. Surely the Germans know better. China is Russia's friend and partner in many things. China trades with Iran all the time, as does Germany who also trades with China, Russia and Iran. We are being left out, and they don't care. It is our bed.    

My favorite saying is: "We are Japan now".  We do have some reserves of oil and gas, but Big Money will steal that and exploit the people with unjustified high prices for the same. So we are Japan and maybe even worse as the Big Money is now crashing the currency of the people. Yes, it's not that stuff is going up in price as much as the dollars used to buy stuff are worth less. For sure, our dollar is worthless. Thanks, Big Ben.

kashey's picture

Ironocally Russia is much more a free-market capitalist society than Europe and (for a couple of decades) USA. After collapse of USSR the government doesn't subsidize anything, no industry and even agriculture, while in the West everybody is sweeming in river of cheap and even free money, government spends trillions to support local producer and consumer. You are really a dreamer, you should wake up to new realities. Russia is a semi-authoritarian state, but amazingly to myself we are much more a free market, a healthy values conservative straight nation, we enjoy less regulation and restrictions, more personal (non-political) freedom in daily life than people in the west. Besides, even being personally anti-putinist I have to admit that we have more a popular leader :) We are better in everything... :) and have balls, the only ones on the planet, to piss on Obama and Merkel to reunite with Crimea, which has ever been ethnically Russian :)

Oracle of Kypseli's picture

Russia and china are playing chess and the United States of Entertaiment is playing checkers.

I never thought that I would ever be able to say something like that 20 years ago or so. That's how bad things are getting lately.

Lost Word's picture

Ironic that US money goes to China,

China's money now going to Russia,

so indirectly, US money going to Russia.

TBT or not TBT's picture

And the kleptocracy there parks it back in western banks and western assets.

Anusocracy's picture

Only stupid people keep all their eggs in one basket.

If I were an elite, I would have assets in several reasonably safe locations.

old naughty's picture

"Ironic that US money goes to China,

China's money now going to Russia,

so indirectly, US money going to Russia. "


Blood to heart...

money to matrix mind,

must keep the flow going. No plug-ups.

jeff montanye's picture

but with those sanctions and all some (most?) is being pulled out and redeployed elsewhere.  as with many others, it's not clear to me which side these sanctions are going to hurt more.

Tabarnaque's picture

I'd rather say: US Debt goes to China. Then China uses US debt for wealth creation. Then the wealth created goes to Russia for investment and more wealth creation.

Treason Season's picture

Nothing new. Rockefeller and LBJ among others gave billions to the Reds, not to mention the fucking a-bomb and cruise missiles

sangell's picture

This is small beer, a cheap consolation prize for Putin. He needed something big like a long term commitment from China for Siberian gas and financing for the Power of Siberia pipeline. That is why he dispatched the Deputy PM to China last month. He came back empty handed. China is not going to pay the high prices Putin needs to make this project feasible preferring to develop its own shale gas instead of pouring billions in to develop Siberia for Russia. You clowns think Putin is playing chess? If he is Europe put him in check with their move to diversify their gas supplies and reduce Putin's revenues and he just traded a knight for a pawn with Xi Jinping who he has to cling to for whatever crumbs Xi will give him as the G-7 prepares to squash Russia's economy if Putin pushes into Ukraine.

TheReplacement's picture

More like China making a move.

Relentless101's picture

I think that is more likely. China has some real shit going on. They need support as well.

Headbanger's picture

Yeah, I bet China just "invested" in that Russian plane stuck in Moldova for starters..

sangell's picture

Putin probably wishes Deputy PM Rogozin had been shot down after his mission to Beijing last month failed to get China to commit to a big gas and gas pipeline deal. Putin needs real support not symbolic support and China isn't giving it. Naval exercises of the sort the US does routinely with navies around the world is not a strategic alliance. A commitment to invest a bit here a bit there is what China offers any country not a valued partner. Everywhere Putin looks he is getting the cold shoulder as befits this KGB thug. His only 'allies' are creeps like Daniel Ortega, Kim Jung Un and Robert Mugabe!

TeamDepends's picture

Cut to photo of these two world leaders tongue kissing.

Volkodav's picture

nothing intelligent to contribute?

TeamDepends's picture

OK, it was perhaps merely "a hug".  Is that better?  And what have you contributed that is "intelligent"?

ebear's picture

He bitch slapped you, so there's that.

TeamDepends's picture

And you have nothing intelligent to contribute, so there's that.

socalbeach's picture

Most of the comments at the top of a thread are void of useful content.  Including this one.

TeamDepends's picture

We wait, then, for you to junk yourself for posting a quite useless post.

socalbeach's picture


(I junked the 2nd part of my post.  I agree with the first part).

Volkodav's picture

You're getting more downvotes as you go...

BlindMonkey's picture

You are clearly C league material for fight club. Light on talent, intelligence and wit.

"Look son. You have a good heart. This just might not be the game for you though."

TeamDepends's picture

Bring it "Blind Monkey", who has been here all of 10 weeks.

BlindMonkey's picture

I shall try to roll at a speed at which you will, hopefully, find comforting and to your style based on your comments above:

I know you are but what am I?

TeamDepends's picture

Your monkey logic is too much!/  (throws a banana)

TeamDepends's picture

To ebear and the other candy-assed maggots who junked us:  Do you think China and Russia are NOT in bed together?

Luckhasit's picture

Does a bear shit in the woods?

TeamDepends's picture

If it serves his commie goals then you bet your ass he does.

TeamDepends's picture

Tried to post picture of Putin and Hu Jintao hugging but it ain't happening.

BlindMonkey's picture

"A" league talent could have figured out how to imbed a pic.