Cooperation between Russia and china in banking sector: projects and prospects

Trade and economic cooperation between Russia and China is currently actively expanding, the volume of investments is rapidly increasing, large-scale industrial projects are implemented and cooperation in the banking sector is developing. Chinese and Russian financial systems are establishing ever closer contact, long-term investment programs are being taken and infrastructure in the banking market of the two countries created.

Russian President Vladimir Putin in his “Address to the Federal Assembly of the Russian Federation” on December 12, 2013 made a point of the importance of focused work to improve the investment climate in Russia: “Two years ago together with the business community we began a systematic work to improve business climate in Russia. I would say that the results are good. Therefore, we will launch a national rating of the state of the investment climate in the Russian regions from the next year” [1]. Russian President Vladimir Putin also said that for the further successful development of business it is necessary to achieve its high level of transparency and strict compliance with the law, including banking institutions, effective activity of which depends largely on the successful development of an innovative economy and production. In his article “The Shanghai Cooperation Organization (SCO) - a new model of successful international cooperation”, written on the eve of the 6th meeting of the Council of Heads of SCO states, Russian President Vladimir Putin noted the great potential for economic cooperation between Russia and China, including the banking sector: “It is obvious, that wide range of activities is not limited to the political sphere. We have a rich economic agenda. Economic cooperation is becoming more and more important for the SCO. The region offers great opportunities for effective mutual cooperation, which can significantly raise the living standards of the population and turn Central Asia into one of the most developed regions in the world.

I believe that instruments of regional integration will effectively put into practice natural competitive advantages of the SCO member states. This also applies to energy and resources or traffic, as well as development of traditional and innovative industries, science and technology.

It is obvious that there is a vast field for activities and initiatives for business and banking communities. Not coincidentally, Business Council of the Shanghai Cooperation Organization will hold inaugural meeting during the upcoming summit, which will form the Coordinating Center of the business world of countries participating in the Organization. It is associated with high expectations for the establishment of specific cooperation projects. These efforts must also be supported by the participants of the interbank agreement, formed in Moscow in October last year” [2].

“Friendship, Good-Neighborliness and Cooperation Treaty between China and the Russian Federation”, signed in Moscow on July 16, 2001, is designed for a long term and provides a consistent strengthening and development of the Russian-Chinese intergovernmental diplomatic, cultural, economic and trade relations, which creates favorable conditions for banking cooperation and implementation of major investment projects [3, p.2].

In its policy documents political party “United Russia” emphasizes the importance of developing banking sector for the successful implementation of the project to modernize Russian economy and society, which would provide financial support for business, introduction of technological innovation in the production, research and development, formation of venture capital. In this case, inter-bank cooperation between Russia and China is becoming a significant factor in the development of domestic banking system, contributes to the improvement of investment climate.

In June 2011 a joint Russian-Chinese Investment Fund (RCIF) of $ 4 billion Dollars was founded with the support from the Governments of the Russian Federation and the People's Republic. Its main task is cooperation between the two countries in the implementation of long-term joint investment projects in the technological and infrastructural spheres. The immediate founders were Russian Direct Investment Fund and CIC. Signing of the Memorandum on the establishment of the Russian-Chinese investment fund management company and basic principles of its activities by the Russian President V.V. Putin and President Hu Jintao on June 5, 2012 in Beijing, intensified the process of further investment cooperation between the Russian Federation and China.

The XXV Congress of the Association of Russian Banks (ARB) was held in Moscow on April 2, 2014 in the Pillar Hall of Unions. The main subject of the congress was discussion of the project “On the prospects of the Russian banking system: a view of the banking community.” Presentations were made by the President of ARB Congress G.A. Tosunyan and Chairman of the Bank of Russia E.S. Nabiullina, as well as by many representatives from RF government and banks: leaders and representatives from the Federal Assembly of the Russian Federation, RF Government, ministries and agencies, bankers and financial experts, academicians, members of international financial institutions. It was noted at the ARB Congress, that the country's banking system had become one of the main driving forces of the national economy and the most important factor in its progressive and dynamic development. However Russian banking system meets new challenges as well: modernization of the institutional reforms, improvement of the banking services quality, access to the international financial market [4].

RF banking system at present is at the stage of remodeling transformation, which should result in the creation of efficient financial system that meets international quality standards. Access of the institutional structures of Russian banking sector to the China's financial market is an important indicator of its qualitative and quantitative development, significantly expands investment opportunities [5, p.5].

Positive development of economic and political situation in Russia today, strengthening its international position, expansion of domestic business spheres of influence abroad have identified transition of production sector and banking system to innovative development, integration of Russian banking institutions in the global financial and economic space, which, in particular, was reflected in the “Concept of long-term social and economic development of the Russian Federation for the period till 2020”, according to which “the purpose of development of financial markets and the banking system in the medium and long term perspective is to create an effective globally competitive financial system, able to provide a high level of investment activity in the economy and financial support of innovative activity” [6].

Russia and China are currently going through a stage of economic modernization, which is reflected, in particular, in an innovative change of economic structures, implementing new information technologies, creating an industry of knowledge, forming a new institutional framework for science, industry and business, including banking sector [7, p.123].

Russia's banking system in the near future will determine the main directions of its activities within the framework of the “Concept of Long-Term Social and Economic Development of the Russian Federation for the period till 2020”, according to which Russian economic and financial market should make a qualitative and quantitative leap, providing innovative development of industry and business with financial resources, strengthen the social sector, become an instrument of expansion of the country’s geopolitical influence in the world. In this process great importance is attached to the institutional structures of the Russian banking system abroad, in particular, China [8, p.237]. Inflow of foreign capital into the Russian and Chinese financial sector leads to improved banking technology - innovative financing methods are developing, banking infrastructure is improving, advanced financial instruments are introduced, risk diversification is taking place, and etc. [9, p.180]

Course of openness to the outside world, adopted by the Chinese leadership in the early 1980s, among other things means increasing access of foreign capital in China's economy, initially to the limited territory of free economic areas and a restricted number of industries and businesses, and then - in an increasingly large scale [10, s.339].

Peoples Republic of China - a modern industrial state with great economic and technological potential, the largest in terms of population, is of great interest for the Russian banking system as the financial and economic partner, financial services consumer market, etc. Economic growth and strengthening of Chinese external position in the beginning of the XXI century make it a most promising financial and industrial partner for the Russian Federation [11].

Russian-Chinese investment cooperation is in intensive progress: for example, the total number of Chinese capital investment and innovative projects in the Russian economy in 2010 alone reached 658 million dollars, and the volume of Chinese contract investments totaled 320 million, which exceeded the level of 2005 twice as much; the total value of China's contractual investment reached 977.1 million dollars, which became an index of China - Russian interaction effectiveness in trade, economic and technological spheres [12, p.19].

In December 2006 the PRC banking sector was officially opened to foreign banks, which made it possible to establish branches and subsidiaries of Russian banks in Chinese financial and economic area. In accordance with the Chinese banking legislation, in order to be able to provide customers with a complete package of financial services in national currency units, foreign banks operating in China must be properly registered, have a registered capital not less than 1 billion Yuan and working capital not less than 100 million Yuan. Inflow of foreign investment into a stable Chinese financial market is one of the most important growth factors of the PRC economic potential [13, p.154].

The stability of China's financial market and high investment attractiveness of economy sectors was achieved through purposeful, constructive state regulation, which became an important factor in the country’s successful financial and industrial development during the late 1980s - 2000s [14, p.138]. Currently, China is focusing on building high-tech industries, applying nanotechnology in production, training professionals, improving banking system, in particular, expanding partnership with the credit institutions in other countries [14, p.140].

A coherent innovation policy conducted by the Chinese leaders and business community, creation of effective innovation infrastructure, part of which became the banking system with its high technological characteristics and motion vector in the direction of integration into the world of global financial and economic space, provided the PRC sustainable social and economic progress, including successful development of the regions [15]. Currently a consistent and large-scale development of trade and economic, financial and investment relations is taking place between the Russian Federation and the People's Republic of China. For instance, if in 2011 Chinese investment in Russia amounted to 716 million Dollars, by 2020 the Chinese business plans to increase the total amount of direct foreign investment (DFI) in the Russian Federation up to 12 billion Dollars; given that Chinese investments are concentrated in Russian manufacture and transportation; while the number of planned joint investment projects is steadily growing [16, p.133].

Modern China “keeps playing an organizing role in social and economic development, protecting domestic market, as a business incubator, builder of infrastructure, a regulator of relations between national and foreign capital” [17, p.4]. The role of the state in development and increasing capacity of domestic financial market is growing, which facilitates the flow of foreign investment, including from Russia. Prospects for the development of the PRC securities market include “increasing the role of the stock market in financing of the economy, the free float growth, accelerated development of corporate bond market, the expansion of the institutional investors sector and liberalization of foreign portfolio investment inflows” [18, p.5]. Within 2008-2010 China implemented a number of successive measures to overcome global financial crisis, which made it possible to maintain stability in financial, trade and economic market [19].

Present stage of development of the world economic system is characterized by increasing and accelerating capital trans-nationalization and internationalization, which is increasingly involving Russian and Chinese financial systems, development of scientific, industrial and business ties, mutual exchange of technology, including in the sphere of banking business.

The policy of attracting foreign investments into PRC national economy is quite effective. China phenomenon is that the ongoing market reforms are not accompanied by any significant changes in the political system. In modern conditions China has a transition economy, acquiring the market form [20]. Foreign direct investments have a significant impact on the process of technology transfer, scientific and technological development of the national high-tech firms in China. [21]. “An important part of China’s foreign policy of openness is attracting foreign direct investments, which are regarded as quite an effective way to obtain foreign financing, technologies, new forms and methods of management” [22, p.5].

China's economic institutional and structural adjustment within 2000-2014, building innovative financial system, made Chinese banking market attractive for foreign investment; Russian banks have also started a special study of China’s financial and economic market for a potential opening branches and subsidiaries of banking institutions there [23].

IX Russian-Chinese Investment Forum took place in Harbin in June 2012. It was attended by many representatives from the Russian and Chinese business elite, involved in the implementation of joint investment projects. Thus, the CIC President Mr. Tsvivey Lowe noted in his speech, that China was interested in developing long-term infrastructure projects in the common border areas; the Chinese companies are also expected to promote cooperation in the export of technologies and innovations in the field of transport equipment and machinery. In March 2013 China Deputy Minister of Foreign Affairs Mr. Cheng Gopin emphasized, that Russian-Chinese relations in cross-border infrastructure integration will soon make new breakthroughs and rise to a higher level. In the same month, CIC CEO Mr. Gao Xiqing signed a “Memorandum on the promotion of investment in the construction of RF Far Eastern Federal District transport infrastructure and in the development of the Far East” with RCIF and RF VTB.

Currently, the China's economy is in the process of internationalization: rising export of goods and services and significant foreign direct investment stimulate innovation process in the country and expand ties between Chinese business and partners in other countries, including the Russian partners working in the banking market [24].

Future development of China's stock market in the context of the XVIII CCP Congress decisions has been studied by the Chairman of the China Securities Monitoring Committee (SMC) Mr. Guo Shuqing, who stressed the need for significant liberalization of the primary market in terms of creating modern market-oriented mechanisms for decision management and business decisions [25, p.155]. The financial market is characterized by development of modern China's institutional framework, considerable adaptability, high-rate information exchange, the presence of skilled professionals in the banking business. [26] This substantially facilitates operations of foreign credit institutions there, including the Russian ones. At the same time, the Chinese banking system performance requires a good command of innovative banking operation methods from the business partners.

A branch of VTB was opened in the financial capital of China - Shanghai on February 26, 2008. This was a major breakthrough for the Russian banks in the Chinese financial market. Major organizational and scientific-analytical work was carried out by the VTB representative who worked in China for several years before opening the branch there.

Currently, Russia and China are leaders in the economic block BRICS. Thus, in 2007 trade turnover between the countries exceeded 48 billion Dollars, and showed an annual increase of over 44%. Russian Prime Minister Dmitry Medvedev, speaking at a press conference in Beijing, said about the plans to significantly increase trade and economic relations with China: “Priority should be given to high-tech industries, such as civil aviation, nuclear energy, space, and nanotechnology.” Russia also plans to actively cooperate with China in the field of banking; as part of these plans Bank VTB and China Construction Bank (China Construction Bank Corporation) signed a “Memorandum of Understanding”. This agreement should contribute to strengthening interaction between the banks in the field of maintenance and financing foreign trade between Russia and China.

Successful business expansion to the international financial markets contributes to the improvement of institutional development of Russian banking system. The President - Chairman of the VTB Management Board Mr. A. Kostin commented on the signing of the Memorandum: “Today a branch office of VTB is operating in Shanghai and Beijing, that is, we have the entire essential infrastructure for the effective maintenance and further development of Russian-Chinese trade operations”. Joint Russian-Chinese projects both operating already and ready for the launch require extensive financial support. Accordingly, opening Russian bank in the China's financial market is natural, and it is a great resource for perspective development. VTB started its operations in China following the Russian companies which had built their business structure and are active in the Chinese financial and economic space. Mr. Alexander Titov noted that: “Given the impressive volume of operations of Russian clients in China and Chinese partners in the Russian Federation, domestic banks have long been overdue in this market” [27, p.5]. According to Mr. Titov, Russian companies need to provide more financial services in China promptly, then in the future the Russian bankers would keep and develop a considerable scope of domestic business in the PRC; otherwise the service operations of Russian companies may go to foreign banks.

Among others the VTB customers in China include companies that purchase high-tech equipment. Since 2002 VTB has been implementing structured import financing transactions for Chinese equipment, which allowed a number of Russian companies to acquire the necessary equipment. Among them: “Amur River Shipping Company”, “Far East Shipping Company”, subsidiaries of cellular service provider “MegaFon” and others. Russian industrial companies deliver high-tech engineering products, primarily military equipment, to China. VTB Group regular customers include such major exporters of the Russian defense industry as “Rosoboronexport” and “Sukhoi”. VTB has partnered with “Atomstroyexport”, taking part in financing the construction a number of nuclear power plants in China, including Taiwan.

Rapid development of China's economy contributes to the vigorous growth of credit institutions infrastructure, foreign investment: increasing number of foreign banks branches and subsidiaries is operating in China. [28]

VTB in China also handles a number of transactions for Russian oil and gas companies, including “Stroytransgaz” and “Itera”. VTB partners in China are also local companies working in the field of Information Technology and Communications. In particular, VTB cooperates with the world-famous Chinese corporation “Huawei” telecommunications group, which is working with the leading operators of fixed-line telephony and mobile communications in Russia. VTB customers in China are a well-known developers, such as “Shanghai Construction Corporation”, the “First Chinese Construction Corporation” and

Shenyang Heavy Machinery Plant. VTB also pays attention to local forms of bilateral trade and economic cooperation, including cross-border trade.

Consequently, the VTB customers, to whom the bank provides a comprehensive service, include representatives of both large and medium-sized businesses. “VTB Branch in China intends to actively carry out operations in the field of foreign trade financing, as this service is in demand among Chinese and Russian companies. VTB will provide Chinese customers comprehensive financial services, rendering support to enterprises in arranging business operations in the Russian market”, - says the head of the branch Mr. Philip Ko. According to the manager, VTB subsidiary in Shanghai plans to take a leading position in serving RF foreign trade turnover with China over the next three to five years [27, p.6]. VTB proved to be the leader among Russian banks seeking to expand into the Chinese market. VTB representative office was operating in Beijing in 1989 already, and its specialists did serious information and analytical work, the purpose of which was an in-depth study of Chinese banking system and financial and economic market: “We have studied the country's financial market, regulatory requirements, identified the location of the bank in the market, pre-formed a customer base on which we will focus”- pointed out the banker [27, p.7]. At the same time, the arrival of Russian banks in the Chinese financial market is being kept down by the PRC banking legislation: in accordance with the rules of the Chinese regulator, foreign bank can open a branch in the country only following successful operation as a representative for at least two years. Therefore, it is quite challenging for many Russian banks to enter into the Chinese financial market quickly: they need serious preparatory work.

Russian Agency for the Insurance of Export Credit and Investment, a subsidiary of Vnesheconombank, is expanding business cooperation with Chinese partners, principally with the Sinosure Corporation; in June 2012 they signed documents establishing the foundations and objectives of economic and financial cooperation. The work in PRC financial market requires a thorough and in-depth study of its specificity. For example, “China financial charter” requires writing all financial reports and even part of the bank's internal documents in Chinese, and in accordance with the local accounting rules for the submission of documents, to several PRC departments at once. These requirements of the Chinese state financial agencies significantly complicate the activities of foreign companies in China’s financial market: bank branches should have a staff of professional financiers familiar with the specifics of China's banking system and a good knowledge of the Chinese language, which is very difficult to find. Therefore, training specialists for the Chinese market in the field of banking business is one of the most important tasks that need to be consistently worked out by Russian banking community. However, as noted by Alexander Titov, VTB managed to solve this problem: the branch employs two Chinese specialists with excellent knowledge of Russian, while corporate services branch is headed by Irina Kuligina - Specialist from Khabarovsk VTB branch, who is fluent in Chinese and has experience in working with PRC companies and financial institutions. Branch is headed by a native of China, Singapore citizen Mr. Ko Dzit Kian (Philip Ko). The fact that VTB preferred Chinese specialist to Russian managers Mr. Titov accounts for the interests of the bank and its customers: “Mr. Philip Ko’s vast experience in the region, his knowledge and contacts, allow the branch to develop quite effectively” [27, p.8]. At the same time, Chinese financial authorities have provided systemic support to Russian banking specialists, advising them of the specifics of the Chinese banking business principles. Mr.Titov pointed out: “Despite of the rigid requirements for opening branches, put forward by the regulator, the Chinese authorities have provided active assistance to the Russians. All agencies, involved in the process, not only work efficiently and without unnecessary formalities, but also voluntarily provide VTB in-depth counsel on all matters.”

In December 2012 the Savings Bank of Russia and China Development Bank signed a cooperation agreement, according to which both countries’ leading state-owned banks were expected to allocate approximately $ 2 billion Dollars in funding major long-term investment projects, promote the development of crossborder infrastructure and collaborative commerce.

In the context of extending financial and economic cooperation with the Chinese banking organizations, VTB signed a memorandum of understanding with several leading financial institutions in China: Bank of China, China Construction Bank, Industrial and Commercial Bank of China, Bank of Communications, Agricultural Bank of China, CITIC Group as well as China Export Credit Insurance Corporation Sinosure and Nationwide processing company issuing banks cards China UnionPay Co. At the same time, VTB signed a package of agreements with a number of banks in the PRC, which should provide long-term financing of the Russian-Chinese export-import transactions (for the period up to 10 years), the aggregate amount of approximately $ 2 billion Dollars.

VTB implements policy of increasing technical and technological cooperation with the banking system of the People's Republic of China. As Deputy Director - Head of VTB Foreign Financial Institutions Department Mr. Alexander Miliukov pointed out: “VTB activity in the Chinese direction applies to the card products - now with VTB the China Union Pay settlement system cardholders in Russia can receive the same services as VISA, MasterCard, American Express or Diners Club cardholders” [29, p.2]. Acceptance of China UnionPay cards by VTB Bank in Russia has become an essential step in extending Russian-Chinese economic and financial cooperation, element of the world financial system globalization. VTB has created a promising precedent for the Russian banking system: It was made possible to get cash through China UnionPay plastic cards, a national payment system of another state, from ATMs in the territory of the Russian Federation, to pay for goods and services, make bank transfers, etc. Chinese bankers acted shrewdly, making China UnionPay card compatible with VISA and MasterCard international payment systems, which allows accepting them at the same terminals, significantly improving the user’s comfort. China UnionPay Company was established in 2002; 80 financial institutions in China became its shareholders; major stake is owned by five largest national banks.

Chinese banks are pursuing a policy of hyperactive development of foreign financial markets. Expansion of UnionPay cards became one of the means of increasing China’s economic influence: Chinese bankers offer foreign banks to enter the system as issuers and become the issuers of such cards. Currently, banks in South Korea, Hong Kong and Singapore are engaged in the emission of China UnionPay cards; the negotiations are underway with the credit organizations from the USA, the UK and some other countries; cooperation with Citibank is organized. Chinese bankers are showing particular interest in the Russian financial market as one with great potential for development.

In November 2005 VTB President - Chairman of the Board Mr. Andrei Kostin signed a Memorandum of Understanding with China UnionPay, which laid the foundation for future long-term positive relationship. In the spring of 2008 representatives from VTB and its processing center “Multicard” paid a friendly and business visit to China UnionPay headquarters in Shanghai, in particular, the Central hall of China UnionPay processing center, whose work is organized at a high technological level.

In July 2006 VTB management signed Partnership Agreement with “China UnionPay”, under which the Russian bank undertook to organize acceptance of Chinese cards not only by VTB ATMs and its group structures, but by sales and service network across Russia as well.

In 2006 VTB and “Multicard” experts engaged in introducing China UnionPay to Russian financial market, adjusted the necessary procedures and connected it to ATMs in Moscow and the Far East. As a result of VTB and “Multicard” specialists’ purposeful activities all VTB Group ATMs in the Russian Federation (Industry and Construction Bank and VTB 24) managed to receive cash in rubles and dollars on China UnionPay cards at the beginning of 2007. At present Russia has more than 3 thousand VTB Group ATMs, active connection of dealers and service centers through POS-terminals is carried out. Bank of China, Agricultural Bank of China, China Construction Bank, Industrial and Commercial Bank of China are leaders in the production of China UnionPay plastic cards. VTB, MDM Bank and “Vostochniy Most Ltd.” have offices in Beijing.

Since economic activity in the PRC, related to the receipt of income, is banned to the majority of foreign banks representative offices, authority of the representative office to conclude contracts is limited to the permitted scope of its activities, specified in the Certificate of Registration (Registration Certificate). Representative offices of foreign credit institutions are not entitled to enter into contracts to which they are the party receiving income or engaged in direct economic activity (receiving payments at its address or for transfer to the parent company, services, sale of goods, etc.) [30]. Foreign missions have the right to enter into other economic agreements, the subject of which is not a direct economic activity, such as: agreements to ensure the continuing operation of the representative office, for example, lease agreement, car lease and / or purchase, office premises repairs and cleaning, apartment lease for employees, cellular or wire telephony and Internet access payment; agreements permitting foreign missions to carry out information and communication tasks set by the parent company, such as contracts for marketing research, organization of presentations, exhibitions, participation in conferences, forums and other events; labor services agreements with the PRC service organizations; accounting and legal services contracts, etc. [30]

Russian and Chinese banking systems passed reformation stage, which made them more effective both in applying new technologies and in training expert financial professionals, managers, businessmen, familiar with the specifics of their business partners’ economic market [31].

Chinese financial and economic partners show great interest in the Russian banking capital in their own country; in turn they seek to enter the Russian financial market, believing it to have a long-term perspective for the banking and economic cooperation. Moreover, the resource of mutual benefits from such partnerships is enormous: both Russian and Chinese financial markets have great potential for the development. Russian-Chinese banking cooperation is based on pragmatic interest, the demands of modern financial and economic situation. Chinese authorities give preference to foreign banks at a reasonable level, taking into account their national business interests and financial priorities.

In advancing on Chinese financial market VTB Group intends to rely on its competitive advantages and rich experience in establishing banking operations, thoroughly studying Chinese banking business specifics. Business communications between Russian and Chinese business communities, heads of the state administrative structures, financial experts, and others are rapidly developing today.

A “Round-table meeting on current banking and investment cooperation issues between Russia and China” was held on May 20, 2011 at the Russian Cultural Center in Beijing. It was organized by the Embassy of the Russian Federation in China, Trade Representation of the Russian Federation in China, “RosSotrudnichestvo” and reputable Chinese edition “Economics and Finance”. [32] Russian trade representative in China Mr. S.S. Tsyplakov introduced the participants to the achievements of Russian-Chinese trade, economic and financial cooperation, highlighted the process of implementing bilateral intergovernmental agreements on linked settlements in national currencies and creating appropriate mechanisms in the field of business and management.

The speakers at the round-table were: Tsai Haotsze, representative of the Department of Foreign Investment of China State Committee for Reforms and Development, I.A. Shkonda, Head of JSC VTB branch in Shanghai, Ren Guangming, a spokesman for Hong Kong Stock Exchange in Beijing, Liu Tszeyun, Deputy Director of the Department of International Banking Transactions Mr. P.A. Selivanov, VEB representative in Beijing and others. During the lively discussion business circles representatives from both countries shared experiences, exchanged their views and made suggestions. According to comments given by the participants, the round-table proved to be very useful for a better understanding of many topical issues of bilateral economic and banking cooperation, establishing useful contacts, working out plans for the future.

The round-table was attended by representatives from more than 20 Russian and Chinese banks, companies and organizations, whose work is directly related to financial and investment activities, introduction of nanotechnologies in industry and etc.

Thus, this suggests, that current Russian-Chinese trade, economic, technological, financial and investment relations are an example of stability, efficiency and good neighborly relations. Within a short period of time two of the largest states in the world were able to achieve significant results through effective inter-bank cooperation in such complex areas of cooperation as economic and technological, scientific information and investment.

Russian and Chinese banking systems are developing on the basis of modernization, consistently extend the scope of activities, becoming a part of global financial system. At the same time the sphere of their cooperation is expanding, the number of investment projects is increasing; institutional bank structures in both countries financial markets are created, eventually becoming a stimulus for innovative industrial development.

Russian and Chinese banking systems are becoming increasingly compatible, financial experts and bank employees explore banking business specifics of their counterparts, professionals able to work in specific financial and economic conditions in Russia and China are being trained, there is a mutual influence of innovative banking technologies.

Banking and investment cooperation between Russia and China has great potential for development in the XXI century, its growth potential is huge. Longterm investment programs that contribute to sustainable economic growth, introduction of latest technological innovations, to improving methods of banking, diversification of banking business, integration of national banking systems in the international financial area of globalizing economy.