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Chinese President Hu Jintao and his Russian counterpart Vladimir Putin have attended the opening ceremony of the Year of Russia and delivered speeches at the high-level China-Russian economic forum, pushing the friendship between the two countries to a new high. Activities scheduled for the Year of Russia go far beyond the cultural exchanges.

Xu Tao, an expert in Russian studies in the China Institute of Contemporary International Relations, gives his insights into the Sino-Russian economic and trade relations on the overseas edition of the People's Daily Online.

The article comments that the efforts and achievements jointly made by the two sides are remarkable, especially in the context of ups and downs over the past years. For example, the bilateral trade registered US$6.83 billion in 1996 but plunged to US$5.48 billion in 1998.

However, political mutual trust which has been consolidated since the two countries forged the strategic partnership has put economic and trade exchanges on a fast track. The China-Russia Treaty of Good Neighborliness, Friendship and Cooperation signed in 2001, in particular, laid an important legal foundation for further progress in economic ties. The bilateral trade that year topped US$10 billion. Then it took only three years to reach US$21.23 billion in 2004.

The two-way trade growth has been staggering in recent years at a rate of over 30 percent. The rise in 2005 reached 37.1 percent, much faster than China's foreign trade growth and pushing the volume up to US$29.1 billion.

However, the overall upswing momentum is mixed with some concerns. The imminent problem is the trade structure. Hi-tech intensive products with high added value are not enough. Trade on electromechanical products took up only 12.5 percent last year after continuous decline since 2001 when it made up 25 percent. China's electromechanical imports from Russia even plummeted to 2.2 percent last year from 28.8 percent in 2001.

Another problem is the trade order. Irregularities make it difficult to secure the legitimate interests of the governments and businesses of the two countries.

The investment is sluggish. By the end of 2005, the contracted investment stood at US$2.38 billion which was not enough to give a boost to the trade.

All of those issues, though unavoidable in fast growing trade relations, have negative effects on the bilateral trade. And the leaders and governments of the two sides have attached great importance to solving them. They have proposed specific measures to address the issues when the Year of Russia was launched in China.

At the China-Russia economic summit last Wednesday, President Hu Jintao highlighted the fields for the future bilateral economic and trade cooperation. He expects increase in electromechanical products in bilateral trade, expansion in trade on energy and resources, as well as scale-up of two-way investment on home appliance, communication, infrastructure, and development and deep processing of oil, gas, forestry and mineral resources.

He also hopes closer ties and personnel exchanges be promoted in the commercialization of scientific research results in aerospace, mechanical manufacturing, nuclear energy, new materials and bio-technology.

Nearly two-thirds of the 22 deals inked between the two sides during Putin's China visit this time are related to economic and trade collaboration. That gives a favorable turn to the Sino-Russian economic and trade ties.

The history of the China-Russian trade cooperation in the past ten years proves that political mutual trust and development of the strategic partnership between the two sides are the cornerstones for the boom of economic and trade cooperation.

It's believed that bilateral trade will reach the goal of US$60 billion to US$80 billion by 2010 as the two countries further their multi-faceted trade exchanges and cooperation.

(People's Daily March 28, 2006)