With Russia’s deteriorating economic picture, Russian President Vladimir Putin traveled to China to meet with President Xi Jinping in a charm offensive designed to bolster Russia’s international profile.
Russia has been suffering an economic slump since mid-2014 due to EU and US sanctions and a slump in oil prices. The country has been hit hard with the oil price collapse as Russia is the world’s biggest oil producer. Oil and gas accounted for 43 percent of the country’s state revenues in 2015. Russia’s GDP shrank by a massive 3.7 percent in 2015 and is anticipated to decrease by 1.8 percent this year.
Last Saturday’s official state visit tackled economic, security, and geopolitical issues.
With already 2 years worth of sanctions, the trip comes after an agreement by the EU to extend its sanctions for another 6 months in relation to Moscow’s annexation of Crimea. Washington has also maintained its sanctions in the country since May.
Putin’s primary focus will likely be an increased investment in China to lessen Russia’s economic slump. Stratfor’s senior Eurasia analyst Lauren Goodrich said that Russia’s military industry is an asset which China can foster. President Xi on the other hand is likely to focus on steady energy relations with Russia who is now China’s largest oil supplier, surpassing Saudi Arabia in March.
Putin, however, said in a meeting with investors and members of the Russian Direct Investment Fund on June 16th that the period of recession is almost over and that the economy is enjoying all the necessary conditions for growth. He added that Russia’s macroeconomic situation is stable and the level of inflation has decreased.
