Why Rustam Minnikhanov go to China

The delegation of Tatarstan went to China, waiting for an invitation following Vladimir Putin's visit to Harbin

Why Rustam Minnikhanov go to China
Photo: предоставлено пресс-службой раиса Татарстана

“The trade turnover of $3 billion is not the limit, trade with Tatarstan is going to grow in the field of petrochemistry and mechanical engineering," Zhou Lijun, the chairman of the Union of Chinese Entrepreneurs in Russia, forecasts. Yesterday's morning, Rustam Minnikhanov flew to China with an extensive business agenda. At stake — the expansion of cooperation in projects to create electric vehicles, hydrogen technology, and an increase in the supply of automotive components and machine tools. It is overshadowed only by the blow to logistics: due to the May drone attack, Alabuga SEZ “froze” the launch of freight trains to China and back until better times, market participants say.

Called to China after Putin's talks in Harbin

China's interest in Tatarstan has long ceased to be a secret, experts say. Preferences and tax incentives first attracted Haier corporation, and then its “younger brother”, the manufacturer of small household appliances Midea, but the further expansion of Chinese businesses into the republic seemed to stall in the face of geopolitical tensions. Although the Chinese did not abandon joint projects, a direct signal to strengthen mutual partnership was sounded at the highest level in May this year.

“Russia not only welcomes the attitude of Chinese businesses to localise production on our territory, but is also ready to provide economic benefits, assistance and support to investors from China, as well as access to a unique Russian technological base," President Vladimir Putin said in Harbin after a meeting with China's President Xi Jinping.

Within the framework of the III Russian-Chinese EXPO and the Interregional Cooperation Forum, the regions presented their projects. For example, Tatarstan demonstrated the Atom electric car, whose mass production is planned to begin in 2025 together with Chinese investors, as well as Alabuga SEZ with an independent logistics hub.

“Plans to create new mutually beneficial partnerships will be presented to Chinese colleagues by Moscow, Tatarstan, Bashkortostan, Tula, Nizhny Novgorod, Amur Regions, Khabarovsk Territory," Putin urged to pay attention to them.

Electric car, hydrogen, and Alabuga

The delegation of Tatarstan went to China just a month after the end of Putin's state visit. Deputy Prime Minister of the Republic of Tatarstan — Head of the Ministry of Industry and Trade of the Republic of Tatarstan Oleg Korobchenko and head of the Investment Development Agency Talia Minullina have left for China together with the rais of the Republic of Tatarstan, Rustam Minnikhanov. Prior to that, the republic's leadership visited the provinces of the People's Republic of China as part of the delegation of Russian Prime Minister Mikhail Mishustin. Apparently, every step of the regions in expanding cooperation with China is coordinated from Moscow.

“Tatarstan's challenge means that China is ready to reset relations with the regions, there are many projects with specific solutions," said the interlocutor of Realnoe Vremya from official circles.

The presence of Deputy Prime Minister of the Republic of Tatarstan Oleg Korobchenko in the delegation, according to him, indicates that the focus will be on mechanical engineering. Firstly, the search for an investor for the production of the Atom electric car continues. Secondly, the Chinese corporation Chongqing Sanfeng Covanta Environmental Industry Co., LTD should supply equipment for the future waste incineration plant under a contract with Rostec Group of Companies. Thirdly, Haier Corporation is expanding its capacity and is to build 12 plants by 2025. According to experts, they are not going to tea ceremonies, but with specific tasks.

“The work continued, although we and our partners from China did not visit each other. All the projects are being implemented. A large project is being implemented by Haier. It all worked, but not as intensively as we would like. Today there is such an opportunity, we have already held a number of meetings. Our Chinese brothers also missed us," Rustam Minnikhanov told reporters about cooperation with China last year.

China is ready to take petroleum products and chemicals

Chinese businesses are also waiting for the results of the upcoming visits of Tatarstan partners to China.

“Speaking about the development of trade relations with the regions, we can say that Tatarstan occupies a leading position. The republic shows very high growth rates of trade turnover: chemical products and petroleum products are well known on the Chinese market," Zhou Lijun, the chairman of the Union of Chinese Entrepreneurs in Russia, told Realnoe Vremya.

According to him, agricultural products have great prospects for export.

“Tatarstan shows very high growth rates of trade turnover: its products are well known on the Chinese market," said Zhou Lijun, Chairman of the Union of Chinese Entrepreneurs in Russia. Динар Фатыхов / realnoevremya.ru

At the same time, China imports cars, spare parts, and equipment to Tatarstan. "$3 billion is not the limit, trade with Tatarstan is going to grow in the field of petrochemistry and mechanical engineering. The trend towards an increase in trade turnover has a long-term character," he believes. By the results of 2023, the foreign trade turnover with China amounted to $3 billion, which is twice as much as a year earlier, the rais of the republic said at the Jilin-Tatarstan round table meeting.

Chinese business considers the republic to be an attractive Russian region for investment. “Haier, Midea and other major brands successfully operate in Tatarstan, increasing investments and localisation. Today, Tatarstan has created the best conditions for Chinese businesses, for Chinese investors, there is support at the level of the republic's leadership, there are personnel and willingness to work together," Zhou Lijun added.

Container train from Alabuga to China stopped

However, Chinese investors are no longer attracted by tax incentives, but by logistics routes, according to Russian experts. Here everything is not as rosy as before. Due to the May drone attack, Alabuga SEZ “froze” the launch of a container train to China, which was supposed to depart from Deng Xiaoping's logistics complex in June 2024. Market participants claim that the transfer was made for safety reasons, since the explosion of petrochemical cargoes can cause a disaster.

“The postponement of the dispatch of the container train has been agreed with the leadership of the republic," they claim. It was planned to send eight trains per day: SIBUR petrochemical products should be shipped to China, and automotive components for KAMAZ and other goods should be brought back. The press service of Alabuga SEZ informed our publication that the construction of the logopark is 50% ready, leaving the experts' statements without comment.

“Queues are among those who want to go without a queue”

“Since the beginning of the special military operation, the freight terminals of the eastern railway landfill continue to be overloaded. A queue has already formed among those who want to go without a queue," Kirill Boltaev, CEO of TCW news agency, told Realnoe Vremya. “Coal miners and metalworkers are trying to get priority for themselves, while suppliers of oil and petroleum products have been excluded from the priority list. There is a struggle between large business companies for the urgent shipment of goods. KAMAZ and SIBUR wanted to protect themselves from queues and take a separate train from Deng Xiaoping's logopark to China.

According to him, the terminals are clogged due to that goods from all over the country go first to Moscow, and then are distributed along railway lines, “but it's not supposed to be so”. In this regard, Tatarstan could unload Moscow. “Logistics is now a priority, and I think that Deng Xiaoping's grandiose project will be at the top of the agenda," says Boltaev. In his opinion, an independent hub and the ability to independently manage flows will generate the entry of new residents.

Luiza Ignatyeva

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