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China will boost ties with Russia in military tech, energy and space, top envoy says

China will continue to deepen cooperation with Russia on military technology, energy and space, according to its top envoy in Moscow, amid speculation that Beijing might help its neighbour evade sanctions over the war in Ukraine.

In an interview with Russian state news agency Tass, Zhang Hanhui said energy had been the "most important, fruitful and extensive area of pragmatic cooperation between Russia and China". He said such cooperation would be strengthened but - as Europe tries to reduce its dependence on Russian fuel - Zhang stopped short of promising to buy more oil and gas from Russia.

Zhang said there were difficulties in bilateral trade with Russia but the two sides would enhance settlements in their national currencies to ensure stable trade that they hoped would reach US$200 billion by 2024.

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Zhang Hanhui, China's ambassador to Russia. Photo: Weibo alt=Zhang Hanhui, China's ambassador to Russia. Photo: Weibo>

"The US and Western sanctions against Russia are indeed causing some problems for Sino-Russia practical cooperation, and the two countries should strengthen communication and coordination to solve the difficulties caused by sanctions to both sides in trade settlement and logistics," Zhang said, when asked if there were ways to bypass the sanctions on Russia.

"China will continue to support the further expansion of local currency settlements in bilateral trade, investment and credit, and give full play to the role of infrastructure organisations and financial institutions in both countries, including the Russian renminbi business clearing bank, to serve and ensure the steady development of bilateral trade," Zhang was quoted as saying in the interview on Thursday.

His remarks came after Vladimir Dzhabarov, the first deputy chairman of the Russian upper house's foreign affairs committee, last month suggested Russia was willing to use the yuan in its trade with China, raising speculation that Beijing may try to help Moscow get around sanctions through a dedollarised financial payment system.

In the interview, Zhang denied there was any plan to abandon the US dollar but said the two countries would "adopt practical and flexible forms of cooperation" in trade settlement according to "actual demands and realities".

He said the Chinese and Russian central banks would discuss the use of their own national payment systems in the two countries.

Last month, China's monthly imports of Russian products, including energy, hit a record high. The value of imports from Russia was US$8.89 billion in April, up 56.6 per cent from a year earlier and 13.3 per cent above March, according to South China Morning Post calculations based on data from the General Administration of Customs.

China's "no limits" partnership with Russia has been under close scrutiny since Moscow invaded Ukraine in February, with Beijing refusing to condemn Moscow and opposing sanctions as it walks a diplomatic tightrope between its ally and the West.

There are concerns in the West that an isolated Russia could try to step up technology cooperation with China, particularly in sensitive areas such as military and space.

Asked during the Tass interview if military tech cooperation would become a priority after the war in Ukraine, Zhang said cooperation between China and Russia was in line with their core interests and not targeted at third parties.

He would not be drawn on the progress of a new missile attack warning system that Moscow is helping Beijing to build.

"China attaches great importance to cooperation in this field and will work together with the Russian side to promote military-technical cooperation between the two countries to a higher level and a broader field," he said.

Zhang also described as "extensive and fruitful" the cooperation on lunar and deep space exploration, human space flight, satellite navigation, earth observation, space technology and applications.

And as Western tech companies pull out of Russia, the Chinese ambassador defended hi-tech cooperation between the two countries, which he said should not be "affected by other factors".

"It is proved that Russia and China have great potential and broad prospects for cooperation in science and technology innovation," he said.

"Cooperation in the field of science and technology ... is free from interference by other factors and is carried out independently," he said, adding that both sides would "continue to promote cooperation in this field in the spirit of mutual benefit".

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.