Moscow, Beijing outline cooperation plans for Russian Far East

Representatives of the Far Eastern region of Russia and Chinese business circles at the Boao Forum for Asia have identified at least two areas for cooperation in the coming years - real estate on Russky Island in Vladivostok, as well as blockchain technology, CEO of the Far East Development Fund Alexei Chekunkov told.

"Our most important goal of arrival at the Boao Forum for Asia was to sign an agreement with the Silk Road Center and China Communication Construction Corporation on the development of real estate cluster on Russky Island," he said.

According to the concept of the development of the Island, approved by the Russian government, by 2022 a grand complex will be built there for holding forums and exhibitions, a medical center, residential, sports and tourist areas will be established. To implement this plan, which covers an area of 500 hectares, the authorities are going to attract about $2.2 bln.

According to Chekunkov, in Russia many people consider such project to be extremely ambitious, but the Fund, like Chinese partners, is confident in its return on investment, profitability and success. "I am convinced that if we create the right site, all the conditions in Vladivostok would be in place so that people come there," he noted.

"Naturally, this will be a magnet for business. Unfortunately, there really are no class ‘A’ offices in Vladivostok - it will be a precedent in the city," he added. "Many people believe that there should not be any housing on the Island, however we believe that for harmony, as rental premises, for international companies, for professors of the Far Eastern Federal University, it should be there," Chekunkov said.

Chekunkov noted that the project implementation would take about 10 years. Chinese companies will take up to 70% of investments. "When the business plan turns into a feasibility study, it is possible that China Communication Construction Corporation will act as an investor, of course, they will take banks and funds with them," he said, adding that in the future, this company will compete in the distribution of investment objects.

According to Chekunkov, blockchain technology was also discussed with Chinese partners at the forum. "Last year we have prepared Voskhod electronic trading platform. We are talking about projects, the first of which was the launch of electronic diamonds D1, but for now in the absence of regulation in a situation where there was no unambiguous interpretation of existing rules, trading did not start," he added. Chekunkov added, that this project will increase the demand for Russian cut diamonds and will give a big boost to the entire industry.

Chekunkov added that at the current stage there is an exchange of information - so far, diamonds have been used mainly in the jewelry industry, however, according to his concept, diamonds would be used as an investment object like gold reserves in central banks. It is expected that this will allow a wide range of investors to acquire rights to the relevant assets, using modern blockchain technology.