Russia president seeks Hong Kong finance ties

17th April 2011, Comments 0 comments

Russian President Dmitry Medvedev held talks Sunday with Hong Kong's leader on a visit aimed at improving business ties and harnessing the territory's financial expertise to modernise Russia.

In the first visit by a Kremlin chief to the former British colony, Medvedev told Hong Kong's Chief Executive Donald Tsang that the territory's famously open economy could serve as a model for Moscow.

"Hong Kong's experience is extremely indicative for us. We must list excessive administrative barriers -- Hong Kong's experience in this aspect could be used in our country ... (and) could also help to establish a global financial centre in Moscow," Medvedev said.

The Kremlin chief arrived late Saturday leading a business delegation as he seeks to diversify his country's economy beyond oil and gas and entice more foreign capital in what he has called a "very bad" domestic investment climate.

Tsang described the first two listings of Russian firms on Hong Kong's stock exchange -- United Company RUSAL, the world's top aluminium producer, and IRC, an iron ore subsidiary of miner Petropavlovsk, both floated on the bourse last year -- as a "breakthrough".

"Russian firms can use Hong Kong as a stable and efficient platform to settle ... trade in renminbi," he added, citing a bond issue in the Chinese currency by Russian bank VTB this year, another first.

Tsang said that bilateral trade grew by a "remarkable" 63 percent last year.

Yuri Soloviev, president of VTB Capital -- the investment banking arm of Russian state bank VTB -- said Russian firms were planning to list "billions of dollars (in stocks) this year" on the Hong Kong Stock Exchange.

"This is one of the most liquid markets globally, and therefore the companies we are representing here will be sufficiently capitalised (as a result of listing)," he told reporters on the sidelines of Medvedev's visit.

He did not name specific companies but said that energy, commodity, transportation and consumer market firms were eyeing Hong Kong listings.

A former British colony which was returned to China in 1997, Hong Kong has for years been ranked the world's freest place to do business.

Medvedev will seek to persuade Hong Kong-based investors to take part in the development of a high-tech hub outside Moscow which the Kremlin chief sees as Russia's answer to Silicon Valley, the Kremlin said ahead of the visit.

He also announced last month that Russia would set up a $10 billion fund in partnership with private equity firms to attract investment.

Medvedev arrived from the southern Chinese island province of Hainan, where he met with leaders of top emerging economies China, India, Brazil and South Africa.

Russia has in recent years sought to align itself more closely with China as it seeks to unlock new energy markets in Asia. This is Medvedev's third visit to the country since he became president in 2008.

© 2011 AFP

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