(Yicai Global) Sept. 12 -- China-Russia financial cooperation is proceeding smoothly, but not fast enough, and more efficient financing from capital markets is necessary for the businesses and projects the countries are working on together, said former People's Bank of China Governor Zhou Xiaochuan at the Eastern Economic Forum in Vladivostok, Russia today.

Moscow-headquartered aluminum giant United Company RUSAL listed in Hong Kong last year, and the Shenzhen-Hong Kong and Shanghai-Hong Kong Stock connects have also opened, and thus Chinese investors can now invest in RUSAL's stock. Chinese investors have traded on the Moscow Exchange, but made slow progress. Many foreign sovereign debt instruments and corporate bonds have issued in the Shanghai market, but though negotiations between China and Russia have been ongoing for three years in this area, none have been forthcoming with the utmost dispatch that is needed, Zhou said.

China has closer cooperation with Russia with Shanghai-based Chinese financial services company  UnionPay, and has made great strides in the payment area, but much remains to do. Faster progress in the vital areas of e-payment and digital payment is still possible, Zhou said.    

"Yuan and rubles can be transmitted to commercial banks and enterprises to gain support from local liquidity for payment, according to the Local Swap Agreement between the People's Bank of China and the Central Bank of Russia. We can thereby achieve faster progress in this regard," Zhou said.

The private savings ratio and private funds are good in Russia, Central Asian countries and Association of Southeast Asian Nations and other countries and areas relevant to the One Belt, One Road, so good use should be made of these private funds to overcome the problem of insufficient investment, Zhou believes.  

He deems most Belt and Road projects commercially viable. The countries involved should bolster communication and cooperation between financial institutions and use stocks and bonds as financing vehicles. Their governments must do well in three areas in future. First, they must effectively firm up cooperation between financial institutions and attract non-governmental funds to participate in Belt and Road construction. Second, they should promote the use of currency of the country where a project is located for direct financing and settlement. Third, they must to pay attention to reasonable pricing and management efficiency after project completion, reduce unnecessary costs and improve rates of return.

The 4th Eastern Economic Forum runs from yesterday to Sept. 13.

Editor: Ben Armour