Continued Cooperation among BRICS and SCO Nations
September 11, 2014 • 10:25AM

China Comes In on Key Russian High-Speed Rail Project

Chinese investors are ready to invest 400 billion rubles, around $10.8 billion, in the construction of a high-speed rail line between Moscow and the city of Kazan, Russian Railways First Vice President Alexander Misharin reported on Tuesday from Beijing.

"The project consists of state support and private funds. The government used to ask us: where would you find the rest of the money? So we have found it," Itar-Tass quotes Misharin as saying. Moscow Times adds that the overall cost of the project, including the purchase of high-speed trains and the modernization of railway stations, has been set at 1 trillion rubles ($29 billion), and Misharin said that with the Chinese 400 billion rubles, Russia will not need to raise extra funds in the form of loans or private investments.

The Moscow-Kazan high-speed rail line, which will reduce travel time to this important mid-Volga River city from 14 hours to 3, was one of the handful of infrastructure projects for which Russian President Vladimir Putin mandated the deployment of monies from the Russian National Welfare Fund, a part of the so-called Stabilization Fund in which oil export revenues had been parked and inactive. In late 2013, however, Prime Minister Dmitri Medvedev announced that the $30-billion project would be delayed because international market conditions were unfavorable for attracting the needed foreign investment partners, as things were envisioned at that time.

The talks between Misharin and the Chinese on a partnership on the project, exemplify how such evaluations change, as Russia-China relations and BRICS financing are upgraded.

See also Russian-Chinese Financial Partnership for Kazan High-Speed Railway Line

Shanghai Cooperation Organization Summit to Further New World Economic Development

A two-day summit of the Shanghai Cooperation Organization (SCO) convenes in Dushanbe, Tajikistan, on Sept. 11, where Russia and China and their Central Asian neighbors Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, joined by soon-to-be full members Pakistan, India, and Iran, as well as other, observer nations, will discuss deepening their economic and security ties.

In an article on the eve of the summit on The Shanghai Cooperation Organization: Peace and Prosperity Through Security and Stability, available on the Russian Foreign Ministry website in English, Russian Foreign Minister Sergey Lavrov argues that "the secret to the success and appeal of the SCO" is its "steadfast commitment to the U.N. Charter and fundamental international norms and laws; to the principles of equality, mutual respect, consideration of each other's interests, resolving conflicts and disputes by political and diplomatic means, and the right of nations to choose their own path of development ... unlike the relics of a past era that rely on rigid adherence to discipline that exists within particular blocs of countries."

Russia will assume the presidency of the SCO at the close of the summit, and intends to use that post "to advocate for coordinated steps on the economy, financial sector, energy and food security," Lavrov wrote. "The continuing instability of the global economy and the risks of another crisis demand greater economic cooperation. Plans are being outlined to make broader use of national currencies in settlements. Prospects are good for launching large multilateral projects in transport, energy, innovative research and technology, agriculture, and the peaceful use of outer space, though the optimal funding mechanism for such projects remains to be determined."

Several smaller summits will take place around the Dushanbe summit, as occurred at the BRICS summit in Forteleza, Brazil, last July. These include the first-ever Russia-China-Mongolia talks, where plans for cross-border railway corridors and a possible regional power grid are on the agenda; a meeting between the Russian and Iranian presidents to discuss expanding trade and economic ties in areas ranging from peaceful use of nuclear energy to supplies of Russian equipment for Iran's oil and gas sectors; and Chinese President Xi-Jinping's first state visit to Tajikstan, in which he and Tajik President Rakhmon will attend the start-of-construction ceremony for the China-Central Asia natural gas pipeline, among other talks.

China May Offer India High-Speed Railroads During Xi's First India Visit

Expressing great expectations in furthering the China-India economic and investment relations, the Indian daily Economic Times cited China Railway Chief Engineer He Huawu telling reporters in Beijing that China would provide proven advanced technology for bullet trains or high-speed railway to India, and it will be cost effective.