Russia And Greater China

Tuesday, March 26, 2013

RUSSIA ANDGREATER CHINA

Monthly supplement from Rossiyskaya Gazeta (Moscow, Russia) which takes sole responsibility for the contents A product by

Games chiefs are under fire2014 Winter Olympics mired in controversy as a result of delays and escalating costs

Attack helicopter’s chief designer says it was his company’s design

Beijing’s claims disputed

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Band from Vladivostok, led by Ilya Lagutenko (above), surprises the local audience by singing in Chinese.

Mumiy Troll rocks city PAGE 14

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SPECIAL REPORT

RUSSIA AND GREATER CHINA2 Tuesday, March 26, 2013

PICTURE OF THE MONTH TOURISM NUMBERS GAME

Hong Kong will make use of digital and conventional media channels to pro-mote the city in Russia after the num-ber of Russian visitors surged 42 per cent to 186,500.

Anthony Lau, executive director of the Hong Kong Tourism Board (HKTB), told RGC promotional activities will go beyond the Russian capital.

“While Moscow will continue to be the pivot of the HKTB’s promotion in Russia, the HKTB will also extend its promotions to St Petersburg, Siberia and the far east.”

With more flights between Hong Kong and Vladivostok, the HKTB will also monitor the potential of this city.

Other plans include producing a new Hong Kong guidebook with Russia’s largest publisher and working with the Macau Government Tourist Office. The HKTB hopes to promote Hong Kong-Macau itineraries, capitalising on a vi-sa-free arrangement for Russian resi-dents which Macau introduced in October.

Meanwhile, the China-Russia Tour-ism Year kicked off on March 22 as part of an effort to increase the number of Russian tourists to the mainland.

Olympic ambitionsSurge in visitor numbers 16.3BILLION HK$

Russian skiers visit the Alpine Ski Resort in Sochi, which will host the 2014 Winter Olympics.

Wang Qishan, the former vice-premier, and Igor Sechin.

China almost quadrupled its arms pur-chases from Russia last year and now ranks third behind India (HK$56.6 bil-lion) and Iraq (HK$32.6 billion) in terms of arms bought from Russia.

Last year, Beijing contracted HK$16.3 billion worth of Russian arms. Mi-171E helicopters and Al-31F aviation engines accounted for HK$10.1 billion. It is not known what the remaining HK$6.2 bil-lion was used for because of the lack of disclosure. Vasily Kashin, an analyst from the Centre for Analysis of Strate-gies and Technologies, said these con-tracts cover either the supply of spare parts or the modernisation of earlier ac-quisitions, and research and develop-ment for Chinese arms makers.The Peak attracts many tourists.

Sechin seals oil dealR

ussia’s crude oil exports to China are set to spike after the two countries signed an agreement last month.

The deal was struck fol-lowing an Asian tour by Rosneft CEO Igor Sechin, who also visited South Korea and Japan. China, the world’s sec-ond largest economy, is set to become the world’s largest importer of crude oil.

Speaking at a meeting of the Russia-China intergovernmental commission on energy co-operation, Deputy Prime Minister Arkady Dvorkovich suggested Rosneft could sell another nine million tonnes of crude oil annually to China.

Dvorkovich also implied that China might give Rosneft a loan to implement the new agreement. Rosneft had earli-er dismissed a Reuters report that Bei-jing could lend the company US$30 bil-lion in exchange for doubling existing crude supplies. Russia currently sup-plies 15 million tonnes of crude oil an-nually to China along the East Siberia-Pacific Ocean (ESPO) pipeline.

Although ESPO’s capacity could dou-ble in the future, Rosneft may use a swap scheme for the deal with Sinopec. It would supply 7 million tonnes of crude per year to Kazakhstan’s Pavlodar re-finery and Kazakhstan’s KazMunaiGaz state company would despatch a simi-lar volume to China through the Atasu-Alashankou pipeline.

ROUND-UP

DEAL OF THE MONTH

Russia wants to boost oil exports to China because the current volumes are not sufficient to implement several joint projects. In 2010, Rosneft and Sinopec subsidiary PetroChina set up a joint ven-ture to build a refinery in Tianjin.

The US$3 billion facility would have an annual capacity of 10 million tonnes and not only process crude but distrib-ute petrol through a retail network of stations. A spokesman for Dvorkovich said the additional crude that Rosneft plans to supply to China will be meant specifically for the Tianjin project.

Striking oil deals was not the top pri-ority of Sechin’s Asian tour. It was pre-dominantly meant to promote projects in the Russian Arctic region and devel-oping the liquefied natural gas (LNG) industry.

TRADE

HK is ‘ideal platform’ for businessTrade between Hong Kong and Russia is booming, rising 150 per cent over the past five years. Last year, the value of bilateral trade between the two reached HK$23.3 billion compared with HK$15.5 billion in the previous year. Erica Ng, director general of the Hong Kong Eco-nomic and Trade Office in London, which oversees Russia, said the increase fits in with Russia’s growing focus on Asia, particularly China.

“We are your ideal platform,” she said during a visit to Moscow this month. Trade between China and Russia is ex-pected to reach HK$697 billion this year.

Some Russian companies, including aluminium giant Rusal and far east iron ore miner IRC, are listed in Hong Kong. State development bank Vneshekonom-bank also plans to open an office in the city.

The bulk of this trade is linked to raw materials and Hong Kong’s large port facilities, said Ivan Polyakov, head of the Russia-Hong Kong Association of Busi-ness Co-operation, but a visa-free re-gime since 2010 and a spike in Russian tourists to 200,000 last year has laid the groundwork for diversification.

One example is the export of Russian pelts to Hong Kong for the manufac-ture of fur coats, said Stephen Wong, European regional director for the Hong Kong Trade Development Council. With a strong Russian presence, the interna-tional fur fair in Hong Kong last month was “one of the biggest in the world”. Howard Amos, Moscow Times

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RUSSIA AND GREATER CHINA

Jailed tycoon defiantTuesday, March 26, 2013

Property magnate Sergei Polonsky is never far away from controversy - even when he is in Cambodia, writes Olga Senina

He is alleged to have assault-ed Khmer sailors on De-cember 30 last year. He is adamant that his Cambo-dian incarceration is the re-

sult of a plot by his enemies in Moscow. He regularly tells people to “get f****d” on social networks, and he promises that he will continue to change the world for the better.

Russia’s most notorious businessman, Sergei Polonsky, is battling charges in Cambodia that he assaulted the sailors during a night of revelry.

Polonsky asserts that on the night of December 30, his anchored yacht was boarded by unknown people. A fight ensued, for which he ended up behind bars.

In an open letter to the Russian Min-ister of Foreign Affairs, Polonsky writes that at the meeting with the Russian consul, attended by seven others, he learned that, “various sources in Mos-cow paid a lot of money for us to sit in prison for three years”.

Polonsky arrived on Koh Dek Koule Island in September 2012, where the tycoon property developer hoped he would find bliss and serenity while his businesses in Moscow were subjected to raids.

He had been quiet for a while, but recently his LiveJournal blog sparked into life.

A spokesman had previously claimed that the cause of the conflict in Cam-bodia was a misunderstanding. He and some Russian friends were celebrat-ing the new year in style and the fire-works attracted the Cambodian mili-

Sergei Polonsky is a Russian busi-nessman with a penchant for con-troversy. In 2001, Forbes Russia ranked him among the top nine most unusual businessmen in Rus-sia.

Originally from St Peters-burg, this eccentric entrepreneur launched his first construction business in his hometown in 1994. In 2000, he entered Moscow. Be-fore the 2008 financial crisis, he set up Mirax Group, one of Russia’s

largest property developers. By the autumn of 2008, its portfolio included projects involving more than 12 million square metres.

His personal fortune that same year was estimated at HK$9.3 bil-lion. In March 2011, Polonsky announced the closure of the Mirax brand, promising to complete the company’s out-standing projects. His most out-landish project was the Federation Tower in Moscow.

Developing controversy

3 FACTS

ABOUT

POLONSKY

1 In 2004, Polonsky was prepa-ring for a trip into space as a tourist. He underwent training,

although doctors advised that his height and weight “exceeded the es-tablished norms”.

2 In October 2008, he promi-sed to eat his tie if the price of luxury apartments in Mos-

cow did not rise by more than 25 per cent in six months. Having erred slightly in his forecast, he ful-filled his promise three years later, publicly eating a portion of his tie.

3 In 2011, he announced a hun-ger strike against what he described as “the lawless rai-

ders preventing him from comple-ting the Kutuzov Mile project and every week attempting to seize con-trol of it”. Kutuzov Mile is an elite residential complex in Moscow, built by Polonsky’s company.


How can you live and work without trust. Without trust is it possible to build a top global company?

NEWSMAKER

railway station in Moscow. “They just stole it,” Mikhail Dvorkovich, Polonsky’s aide, says while making gesture of helplessness. The customer in the reconstruction project was Info-triumph, a firm owned by Maxim Privezentsev, who runs Mirax. Mirax itself was the inves-tor.

In January 2010, Russian Railways, which owns the sta-tion, terminated the contract with Mirax and returned HK$160 million to Info-tri-u m p h , w h i c h Privezentsev sold.

For Polonsky, the business was part of his own private world order, a piece of his own personal space, says an associate. Polonsky even named his youngest son Mirax. Po-lonsky believes that the scan-dals surrounding Mirax claimed the life of his father, writer Yuri Polonsky. His heart gave out.

The mixing of personal and corporate affairs result-ed in some oddities. He has a hatred of formal attire. In the post-Mirax companies he set up, suits and ties were prohib-ited. Office workers were en-couraged to hone their breath-ing techniques and practise qigong, following the example of their “business guru”, as Po-lonsky styled himself.

He is also credited with being in communion with Orthodox elders, Reiki masters, Sufis and Zen monks.

In fact, the only place that Po-lonsky has never visited is outer space.

tary. Following the failure to produce any documents, the Russians were ar-rested.

The Cambodian authorities have a different version. They say the Russians, who were intoxicated, brandished knives and threatened the crew of a ves-sel returning to the resort town of Sih-anoukville, before locking them in the hold and forcing them to jump over-board and swim to shore.

In January, the crew members with-drew their complaints to the police in exchange for compensation but, under Cambodian law, all serious crimes must undergo a full judicial investigation, be-fore which a verdict can be delivered.

In his “confession”, Polonsky acknowl-edged that the collapse of his Russian business last year was because he had “trusted the toadies around me who swore their allegiance and vowed to be honest”. He continued: “Yes, I believed them. How can you live and work with-out trust? Without trust is it possible to build a top global company?”

As such, Polonsky’s agreements cost him the HK$302 million he had in-vested in the reconstruction of Kursk

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RUSSIA AND GREATER CHINATuesday, March 26, 20134

A new dawn for BRICS South Africa invites five African Union members to group summit in Durban, writes M K Bhadrakumar

South Africa opened a new chapter in BRICS history by inviting five members of the African Union to the group’s March meeting, which also

brings to light a number of strong ini-tiatives such as the establishment of an exclusive development bank and de-fence co-operation.

BRICS is the grouping of emerging economies, Brazil, Russia, India and China, with South Africa joining as the newest member in 2010.

India hosted the summit last year and missed out on the opportunity to invite members from the South Asian Asso-ciation of Regional Co-operation.

South Africa, though, has taken a bold

TRADE

step by inviting African Union mem-bers to the meeting in Durban today and tomorrow as the group seeks to strengthen its influence over various re-gions and markets.

South Africa has also invited Egyp-tian President Mohammed Mursi, a move that may be even more significant as it raises the possibility of giving Egypt a permanent seat at the BRICS table.

One of the key issues to be discussed is the setting up of a BRICS development bank. The group agrees that it would need time to set up such a bank, but South Africa is optimistic that the Dur-ban summit will result in a firm deci-sion, and has already started pushing the idea of basing the bank in South Africa.

most fascinating idea that the South African hosts have come up with is holding a “defence seminar” on the sidelines of the Durban summit. South Africa’s defence co-operation with Bra-zil and Russia has gained appreciable ground and South Africa can expect full-throttle support from Moscow for revving up the BRICS process.

An expert study released in Moscow recently puts forth far reaching recom-mendations, such as setting up a per-manent BRICS secretariat, offering to host the BRICS development bank, cre-ating a HK$1.86 trillion crisis fund, strengthening joint work in the secu-rity area and more. The report was commissioned by the Russian govern-

ment with a view to counter the ten-dencies in the West to view the BRICS as a rival.

Africa is becoming a playground of big power rivalries.

The BRICS’ high-profile arrival in Africa is bound to arouse disquiet in Western capitals. In South Africa itself there is a strong lobby that seeks to dis-credit the BRICS process.

The fact that China looms as a large economic presence in Africa and is of-fering an alternative partnership for development to states in the region up-sets the West, which has been domi-nating the continent as its exclusive preserve to source raw materials and as a market for exports.

Country targets Asia-Pacific for food exports Viktor Kuzmin

Russia is looking to increase grain ex-ports to the Asia-Pacific as the country bids to regain its status as a key player on the global food market.

By 2015 the export capacity of Rus-sia’s grain terminals in the Far East is set to reach 6.5 million tonnes and the Asia-Pacific is emerging as a key mar-ket for Russian farmers.

“This is an attractive segment for Rus-sian companies,” says Pavel Skurikhin, president of Russia’s National Grain Pro-ducers’ Union.

Food security is becoming a major global issue with many countries in Southeast Asia aiming to establish them-

selves as centres for sustainable food resources.

Russia is also hoping to join the fray and take advantage of rapid population growth and changing food consump-tion patterns in the Asia-Pacific that has increased the demand for feed grain and oil crops, including wheat, barley, corn and soya bean.

Russian exporters made their first at-tempt to crack the Asian market, apart from China, where imports are strictly regulated, in 2010, when they held a large conference and convinced Asian buyers that Russian grain was just as good as American or Australian.

However, later that year a severe drought struck Russia, and the govern-ment imposed an embargo on grain ex-

ports. As a result, several large deals with major Japanese importers, which es-sentially set the tone for the entire re-gional market, fell through.

Virtually every country in Southeast Asia and Japan imports grain. But the market is very demanding.

Japanese trading houses have creat-ed a highly developed logistics infra-structure with their own network of grain elevators; they also finance deliv-eries and cover risks. That makes the market more expensive, says Arkadiy Zlochevskiy, head of the Russian Grain Union.

The Agriculture Ministry expects Rus-sia’s grain production this year to climb by almost a third to at least 95 million tonnes.Russia is eyeing the Asia-Pacific for its grain exports.

Leaders of the BRICS grouping are hoping to set up a development bank, which China favours.

According to a Xinhua report, China would favour the idea. South Africa has also put forward an idea to set up an exclusive BRICS “think tank” and has entrusted the Human Sciences Re-search Council to act as an “incuba-tor” for the initiative. But, perhaps the


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Moscow targets IT as key sector for growthElena Shipilova

RGC speaks to deputy Telecommuni-cations and Mass Communications minister Mark Shmulevich about Rus-sia’s potential as a global software ex-porter.

Russia plans to increase its IT exports, so that they rival the defence industry. How and when can this be done?

Software development is emerging as a key sector among Russian exports to the world. In the decade leading up to the end of last year, Russia’s annual software exports rose to HK$31 billion from HK$1.5 billion.

Arms exports remains the main driv-er, with HK$116.2 billion worth of weapons sold last year. However, the software sector can expect to close in on defence over the next few years given its rapid rate of expansion.

Exports are also growing thanks to outsourcing to Russia, and that’s what small companies do. When it comes to software products, we have had some

Mark Shmulevich was born on July 18, 1982, in Moscow. He graduated from the Moscow Institute of Physics and Technology. From 2009 to 2012, he was head of business development at Russian Space Systems, which de-veloped satellite navigation system GLONASS. In 2010, he founded Rus-navgeoset, a Russian-US joint satellite navigation venture. In 2011-2012, he was director for development at the Russian Quantum Center, set up under the Skolkovo Foundation. Last year, he was made deputy Telecommunications and Mass Communications minister.

MARK SHMULEVICHsuccessful projects, too. Well-known Ecwid, Prognoz and Diasoft were all start-ups, but they have found their niches. The only question is whether they are interested in staying in Rus-sia or shifting their business to neigh-bouring countries or the United States, where the business environment is often more favourable.

How can we encourage them to stay?

Two [areas] are critical to the devel-opment of the IT sector: a favourable tax regime and availability of skilled staff.

Do you agree that sometimes Russian programmers can succeed where Chi-nese, Indian or Americans have failed?

Our graduates are excellent engineers, but there is a terrible shortage of them. At present, less than 1 per cent of the Russian workforce is employed in IT, compared with 4 per cent in the Unit-ed States and over 3 per cent in Europe.

The ministry has a considerable challenge to address, namely, how to

make this profession more popular. We had a roundtable conference on the personnel problem at the 10th Kras-noyarsk Economic Forum in Siberia not long ago. We are already putting in practice some of the provisions from the conference. One of these is ... pro-gramming competitions.

There is an American video on You-Tube showing the founders of Micro-soft, Facebook and Twitter explain-ing why it is important to learn coding. Will Russia have anything of this kind?

We won’t copy the American idea, but such things are required. Videos are

just one method. Our task is to turn IT specialists into a symbol. To this end, we should have TV shows, talk to students about career prospects, meet with suc-cessful IT personalities and, possibly, shoot a TV series about programmers.

When you were working on the devel-opment plan for the sector, were you building on the experience of countries that have succeeded in IT?

Unfortunately, you can’t take some-one else’s model and apply it to Russia. We have some important peculiarities and pitfalls. But we are keeping an eye on developments in other countries. India is liberalising its regulations on cur-rency options, so we are looking at how this could apply to Russia. Options are not yet an effective motivation tool in Russia. We are also building on other countries’ experience in copyright pro-tection. The fact that we are lagging be-hind gives us an advantage in, say, pat-ent wars. When it comes to infrastructure, we are exchanging experiences in the creation of technoparks with Singapore and Israel. We still have a lot to do.

Beijing’s claims disputedKamov’s chief designer reveals attack helicopter was his design, writes Gleb Fedorov

China’s new attack helicopter, the WZ-10, unveiled at Air-show China 2012 in Zhuhai, was based on a design by the Russian company Kamov, con-

tradicting reports that it was an entirely Chinese designed and built weapon.

The news was only revealed this month at the Heli-Expo exhibition in Las Vegas, United States, by Kamov’s chief designer, Sergey Mikheev. “For ob-vious reasons we have kept this infor-mation secret until now,” Mikheev said.

Previously, it was thought that the WZ-10 was the first attack helicopter that China had designed and built from scratch. The prototype was built by Chi-na’s Changhe Aircraft Industries Cor-poration (CAIC).

The schematic design of the WZ-10 was produced by Kamov based on the requirements and specifications of the Chinese customer, and not based on any Soviet designs.

“They [China] gave us the target mass of the helicopter, and we discussed the desired performance and specifications,” Mikheev said. “Then we signed the con-tract and our company fulfilled it.”

Mikheev, who was involved in the de-velopment of Russia’s legendary Ka-50 Black Shark and Ka-52 “Alligator” at-tack helicopters, said that Kamov’s role in the WZ-10 programme was limited to producing the schematic design.

Specialists attending Heli-Expo de-scribed the news as a bombshell. Rus-

ARMS

sian experts believe work on that con-tract must have begun in the mid-1990s and that the deal was probably signed by state-owned Rosvooruzheniye, the predecessor of Russian arms export qua-si-monopoly holder Rosoboronexport.

Mikheev refused to be drawn on tech-

nical details about the new Chinese hel-icopter, saying that CAIC had built all the prototypes and conducted all the flight tests.

Although CAIC had previously claimed the WZ-10 was China’s first domestically designed and built attack

Russian companies are increasingly taking on more weapons design contracts, such as the one for China’s WZ-10.

helicopter, there were reports the Chi-nese company had commissioned Eu-rocopter, a Franco-German concern, to design the five-blade main rotor and four-blade tail rotor, and that the heli-copter’s gearbox was designed by Ita-ly’s AgustaWestland.

The WZ-10 programme began in the mid-1990s. The first prototype took flight in April 2003. The helicopter’s entry into service with the Chinese forces was ex-pected in 2008-2009, but the programme fell behind schedule.

Russian experts have described the changing nature of Chinese weapons imports from Russia. Previously, the Chinese mostly bought finished weap-ons systems. China now prefers to use Russian companies as suppliers of crit-ical components. “Mikheev has revealed another large weapons R&D [research and development] project the Russian defence industry has completed for the Chinese,” says Vasiliy Kashin, an expert with the Centre for Analysis of Strate-gies and Technologies. “Other projects include the L-15 combat trainer, the FC-1 fighter jet, the HQ-16 surface-to-air missile, the PL-12 air-to-air missile.”


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Xi’s visit set to improve bilateral relationsSergei Luzyanin

Aleksandr Gabuyev

Despite similar political interests, economic rela-tions between Russia and China are characterised by a high degree of mutual mistrust. There may be changes under way, however.

In his first state visit to Russia, China’s new Pres-ident and General Secretary of the Central Com-mittee of the Communist Party, Xi Jinping, sug-gested a possible solution.

His predecessor Hu Jintao’s first visit to Russia in 2003 was to attend a summit of the Shanghai Co-operation Organisation in Moscow. Xi’s visit has an independent bilateral agenda, underscor-ing a new zenith in the political partnership be-tween Moscow and Beijing.

Xi described China and Russia as “construc-tive forces” in maintaining the “international stra-tegic balance”.

Strengthening the Russian vector could also point to Beijing’s desire to send a signal to Wash-ington that not everything is measured in terms of commercial contracts. It is possible that the Chi-nese leadership is making it known to Washing-ton and Moscow that, despite the close econom-ic and financial ties and obligations binding China and the United States, its strategic priorities in re-spect to Russia could be even more vital.

Moreover, the Russian-Chinese partnership is

Investing in the future

OPINION

In his first visit abroad as the new President, General Secretary of the Chinese Commu-nist Party Xi Jinping was in Moscow on March 22.

It is significant that Russia was the first foreign country the Chinese leader visited after his election at the annual session of the Nation-al People’s Congress.

Given rising tensions with the United States and many of its neighbours, Beijing sees it as important to maintain friendly relations with Moscow at a time when the economic links be-tween the two countries are also in need of some bolstering.

In recent years, Moscow and Beijing have been actively stepping up their political co-op-eration. They have created the Shanghai Co-op-eration Organisation; they have been voting in unison at the UN, counterbalancing the three other permanent members of the Security Council; and they have been opposing US mis-sile defence plans.

However, when it comes to trade, relations between the world’s second- and sixth-largest economies (by nominal GDP) are far from real-ising their potential.

According to China’s General Administration of Customs, last year’s trade between Russia and China grew by 11.2 per cent to reach HK$697 billion. At the same time, the growth rate in trade (42.7 per cent in 2011) dropped nearly fourfold. The leaders of the two countries have set the task of bringing trade to HK$775 billion by 2015 and HK$1.5 trillion by 2020.

In order to hit these targets, progress needs to be made in several areas.

First, trade cannot reach HK$1.5 trillion with-out China buying Russian gas. A memorandum to that effect was signed between Gazprom and

... the visit by the head of the world’s second largest economy is especially important for Russia ... with a view to strengthen bilateral relations...

China National Petroleum Corporation (CNPC) back in 2006. Two pipelines with a capacity of 68 billion cubic metres, were supposed to be launched last year. However, because of price disagreements, this project is only alive on paper.

In the meantime, this year offers new oppor-tunities. Gas prices in Europe are falling, while prices for liquefied natural gas (LNG) that China imports are on the rise.

The prices should even up soon, which would make sales to Europe and China equally profitable for Gazprom, while for China it would make no difference as to whom it buys energy

resources from – except for the strategic reliabil-ity of pipelines over the vulnerability of deliver-ies by sea. At the same time, the two countries need to boost their oil trade. The president of Russia’s major state oil company Rosneft is ready to give CNPC, CNOOC and Sinopec ac-cess to offshore oil projects on Russian territory and to increase oil supplies to China via Ka-zakhstan.

This might dispel the uneasy feeling still re-maining after the price dispute between Rosneft, Transneft and CNPC over the Skovorodino-Da-qing pipeline that was resolved early last year

after HK$23.3 billion in losses for the Russians. Moscow and Beijing also need to revise the large-scale programme of economic co-operation be-tween regions of the Russian far east and north-east China signed back in 2009, which has also remained largely on paper. The Russian leader-ship should decide whether to allow Chinese in-vestors into Siberia and the Russian far east, and what the rules of the game should be.

The two countries must step up their mutual investment activities.

Last year, China was the fourth-largest foreign investor into Russia, in terms of accumulated investment with HK$215.5billion, after Cyprus, Luxembourg and the Netherlands, which large-ly represent money from offshore Russian com-panies. The mechanisms the two countries have set up to increase investment have not been working. A HK$31 billion joint fund established in 2012 by China Capital Investment Corpora-tion and the Russian Direct Investment Fund with a managing company in Hong Kong has not yet invested a single cent.

Alexander Gabuyev is a correspondent at Kom-mersant

becoming a weighty response to America’s return to Asia without threatening to turn it into an alli-ance or a military-political union.

In a sense, leaders of both countries have sought to teach US President Barack Obama a lesson of

the personal friendship of Xi and Russian Presi-dent Vladimir Putin.

After Moscow, the two leaders will meet again at the BRICS summit in Durban, South Africa. The establishment of a BRICS community is a real and important step to create a more equitable world.

Global and regional security is clearly top of the bilateral agenda for both countries.

North Korea’s short-sighted nuclear tests have, wittingly or unwittingly, affected Russia and Chi-na’s strategic positions in the Asia-Pacific region. Make no mistake, the expansion of the US mis-sile-defence programme in Asia is not directed at North Korea but at its two giant neighbours.

The situation is compounded by the fact that the region lacks a comprehensive system of secu-rity. The cold war structure of US defence treaties and military bases still dominates.

The key issues of trade and energy co-opera-tion have some way to go before they catch up with the political initiative. But the start of prom-ising negotiations on the production and sale of liquefied natural gas (LNG), and the construction of oil refineries in Tianjin and Russia, suggest hy-drocarbon co-operation is deepening.

China could prove to be a major asset in the development of Siberia and the Russian far east.

Recently, however, certain experts in Russia have arrived at the conclusion that Chinese business is more interested in turning Russia into a “feed-

stock appendage”. Incidentally, on the potential collaboration with Russian companies, certain sections of China’s business community have fo-cused on unilateral benefits. Whether by accident or design, this strengthened feelings of distrust and suspicion in Russia.

After a series of meetings and sessions with party and business leaders, Xi made a very important suggestion. He drew his colleagues’ attention to the need for a shift in emphasis from “unilateral advantage” to “mutual benefit”.

Xi’s “mutual benefit” approach could solve the thorny issue of trust, which is the perennial cor-nerstone of relations in the economic and politi-cal sphere.

If the problem is resolved, and Russian busi-ness begins to believe in the mutual benefit sce-nario, the qualitative expansion of Chinese invest-ment in the Russian economy, including hi-tech and energy, will grow exponentially.

This could well become the key bullet point in the economic dialogue between the two coun-tries.

respect and farsightedness. One must remember that Obama did not deem it necessary to visit Rus-sia after his first or second election. The reasons vary, but chief among them is America’s under-estimation of Russia’s role.

Against this backdrop, the visit by the head of the world’s second largest economy is especially important for Russia, both as a kind of moral com-pensation for America’s diplomatic moves and with a view to strengthen bilateral relations, and

Sergei Luzyanin is deputy director of the Insti-tute of Far Eastern Studies under the Russian Academy of Sciences and professor of the Mos-cow State Institute of International Relations (MGIMO) under the Ministry of Foreign Affairs. He has a PhD in History.

NIYAZ KARIM

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Nation offers new concept

Russia’s new Foreign Policy Concept has finally been released. The latest ver-sion doesn’t contain anything revolu-tionary, but gives insights into how the Russian establishment sees the world.

For the first time, the concept does not men-tion the cold war. Twenty years after the cold war, it is clear Russia’s problems have little con-nection to that time.

The updated concept mentions “the decreas-ing danger of large-scale war, including nuclear war”.

This is important, and shows Russia is strug-gling to shed its 20th-century, big-war mindset. Russia needs a new approach to national de-fence and foreign relations.

The concept points out that “the only reliable insurance against possible shocks is compli-ance with the universal principle of equal and indivisible security as applied to the Euro-At-lantic, Eurasia and Asia-Pacific regions”.

This is a departure from the popular Russian myth that isolation can be good for develop-ment. It simply isn’t possible in the modern world.

An important section of the concept deals with the “civilisational dimension” of global competition and the “rivalry of values and de-velopment models within the framework of the universal principles of democracy and the mar-ket economy”.

An important aspect of the rivalry between the United States and China, which is taking on in-creasing significance in East Asia, is the potential for naval confrontation.

The face-off is already on the agenda of many international conferences and seminars, and is a topic of parliamentary debate and media dis-cussion. All too often, the impression created is that “China is to blame for everything”. The data point to a build-up of its surface and submarine fleet, the coastline deployment of precision mis-siles and the development of tools to track mar-itime targets and disable enemy command-and-control systems. According to US experts, the main objective is to “deny access” to the US navy in various regions of the Pacific Ocean.

The wording is technical in nature, but re-

This is nothing new, but it has new resonance. Hyper pragmatism in Russian politics is giving way to a search for a new ideology and values.

The concept acknowledges the need for this: “The growing importance of civilisational iden-tity is the flip side of globalisation.”

It is notable that the Arab Spring is interpret-ed in the concept as the “striving of nations to return to their civilisational roots”, and “a politi-cal and socio-economic renewal of society pro-ceeding under the banner of strengthening tra-ditional Islamic values”.

Given the widespread belief that develop-ments in the Middle East and North Africa were the result of a clever United States strategy, or another conspiracy, this new interpretation comes across as adequate, even daring.

The new concept introduces the term “soft power”, which has gained popularity in the West

since the 1990s, but not in Russia. Russia’s Presi-dent Vladimir Putin used the term in one of his pre-election articles, a year ago, and has since referred to it as a vital element of foreign policy.

However, the Russian interpretation of “soft power” emphasises the country’s role in coun-ter-propaganda, whereas Europe and the US understand “soft power” as an attractive socio-political model that can be applied in other countries.

But the fact that Moscow has taken note of “soft power” at all is a step in the right direction. Until recently, Russia preferred to rely solely on hard power.

Echoing Putin, the authors of the concept write about the “unlawful” use of soft power, re-ferring to Western NGOs, which the Russian president sees as a foreign tool used to destabi-lise Russia.

Another new element that Russia used to dis-regard is information security. Given the pre-sent situation, the new concept urges “expand-ing the legal framework of international

co-operation to better protect the rights and le-gitimate interests of Russian children abroad”.

It also indicates that Russia is willing to work to improve relations with Georgia.

European countries of primary importance to Russia are Germany, France, Italy and the Neth-erlands, and Britain, with which Russia has had troubled relations.

The authors write: “Russia would like to use the potential of mutual co-operation with Great Britain.”

The concept also mentions a new interest of the Russian leader: Antarctica.

The hierarchy of Russia’s priorities has not changed. As before, the post-Soviet space is the top priority, to be dealt with through the Eura-sian Economic Union. Asia still comes after the CIS, Europe and America in Russia’s foreign policy priorities.

OPINION

Fydor Lukyanov

Growing rivalry in East Asia raises the stakesVictor Sumsky

plete with latent resentment. After all, the every-day “access” of the internet has inculcated us into believing that the very concept is a sacred human right. So if US sailors need “access” to waters adjacent to a certain territory, then how can it be denied? After all, for more than half a century, naval bases, patrols and intelligence gathering in the proximity of China’s coast have been natural to the Americans. The US, and its faithful allies, wield great force – in the shape of six aircraft-carrier groups – as a guarantee of po-litical stability and economic prosperity across East Asia and to secure international lanes of communication. Even the mere suggestion that “forward deployment” could, in the eyes of the Chinese or someone else, appear to be an act of open aggression, and expansionism is deeply offensive to the American psyche.

In Washington’s official interpretation, the principle of freedom of navigation requires that

the 360km economic zones of all coastal na-tions be open to foreign military vessels.

The US justifies its right to “access” the Chi-nese coast on this very proposition. US diplomats assert that their country’s administration would not object to Chinese warships in the exclusive economic zone of the US – omitting to point out that China is not yet able to mount such an expe-dition. But if China’s naval capabilities – and con-trol of the seas – continue to grow, will we see such an incursion in future? If so, expect the US to promptly revise its policy of acquiescence.

What’s worse, the problems outlined above impact much more than US-China relations. The level of military and political tension is ris-ing throughout East Asia. The question that lin-gers is whether the rivalry between the two powers undermines regional stability, without which the continued growth and integration of East Asian economies would founder?

Russia, which harbours plans to exploit the economic potential of Siberia and its far east in close co-operation with its Asian neighbours, has something to mull over. In particular, the fact that any escalation between the US and China is not in Russia’s national interest, and does not chime with its modernisation programme.

It is reassuring that other countries in the re-gion share these sentiments, so there is hope for multilateral dialogue on Asian security under-pinned by joint action. As Russia’s resurgence continues, its contribution will be even more vital – economically, politically and militarily. In this context, the modernisation of the Russian armed forces, including the Pacific Fleet, comes not a moment too soon.

Victor Sumsky is the director of the Asean Cent-er at the Moscow State Institute of Internation-al Relations.

Fydor Lukyanov is Russian editor at a global af-fairs magazine. The article appeared in RIA Novosti.

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Some of the Games facilities are a long way behind schedule.Organisers in the firing lineSochi Olympics faces race against time to get everything finished for 2014 showpiece, writes Ilya Trisvyatskiy

2.01BILLION HK$ - cost for ski jumping facility

These projects have devastated the natural habitats of rare species of plants and animals

Construction of facilities is be-hind schedule, costs are soar-ing, the environment is being damaged and some are start-ing to question whether Rus-

sia should have been given the right to stage such a big event in the first place. Even Russian President Vladimir Putin is unhappy.

With less than a year to go before the opening ceremony of the 2014 Winter Olympics in Sochi begin on February 7, organisers are facing mounting crit-icism.

Journalists, politicians, human rights groups and economists in Russia and abroad have all waded in.

In early February, Putin travelled to Sochi to inspect the Olympic venues and criticised the organisers. He was angered by the fact that the Russkiye Gorki ski jumping facility was 18 months behind schedule. Worse, Deputy Prime Minister Dmitry Kozak said costs for the facility had soared from HK$310 mil-lion to HK$2.1 billion.

Akhmed Bilalov, vice-president of the Russian Olympic Committee, was blamed for the huge overrun. He has since resigned.

Olympic preparations have also drawn criticism from environmental-ists. They say construction in and around Sochi has irreparably damaged the environment.

“These projects have devastated the natural habitats of rare species of plants and animals in the Sochi National Park,” says the Russian office of the World Wildlife Fund.

Rights groups have also voiced con-cerns. Human Rights Watch said mi-grants were not being paid on time and that employers were holding back part of their wages.

Such criticisms are the rule rather than the exception in the build-up to most modern Games of the past gen-eration. Nevertheless, in almost every single case, organisers managed to get their act together and ensure decent standards at the planet’s biggest sport-ing event.

The 2004 summer Olympics in Ath-ens provided an example. Four years ahead of the event, the International Olympic Committee (IOC) expressed concerns that facilities had fallen be-hind schedule. Greece was forced to set up a new organising committee. Just months before the Games, venues were unfinished. The stadium which hosted the opening and closing ceremonies opened just two months ahead of the Games. Yet, the Games proceeded with-out a hitch.

Complaints were voiced ahead of the

2008 Olympics in Beijing. Politicians and NGOs around the world criticised the choice of host, accusing Beijing of serious human rights violations. Two separate resolutions were introduced in the United States Congress calling for an official boycott over the human rights situation in China.

The Beijing Olympics was later laud-ed as arguably the best Games ever in terms of organisation, quality of facili-ties and the memorable opening and closing ceremonies.

As for the previous Winter Olympics, ahead of the 2006 Games in Turin, Italy, the organising committee faced the prospect of being shut down because

Akhmed Bilalov stepped down as vice-president of ROC.

Most coaches, journalists and spectators agree that the Turin Olympics was poorly organised

of a lack of financing. During the Games itself there were serious problems with transport. It took athletes and journal-ists four to five hours to reach the Olym-pic venues from the city, changing sev-eral trains or buses along the way. The narrow main road between the city and the venues was constantly clogged.

“As an athlete, I have nothing to com-plain about – but most of the coaches, journalists and spectators I have spo-ken to agree that the Turin Olympics

The snow leopard is one of three 2014 Sochi Olympics mascots.

was very poorly organised,” says Pavel Rostovtsev, who won silver in the bi-athlon in Turin. He said most of the complaints were about housing and transport. “Many believe that of the pre-vious five winter Olympics, Turin was the worst,” Rostovtsev says.

The 2010 Winter Olympics in Van-couver made the worst possible start. Nodar Kumaritashvili, a Georgian luger, crashed during a trainig run on the opening day. He was thrown off his luge and over the sidewall of the track, smashing head-first into a concrete sup-port pillar. He died an hour later with-out regaining consciousness. The open-ing ceremony began with a minute’s silence.

In Russia, the Olympics have long been a sensitive matter. Many still re-member the Western-led boycott of the 1980 Games in Moscow and are wary of the merits of further criticism. The Western media often give prominence to calls to use this event to extract con-cessions from Moscow in other areas.

Several IOC members say that the most impressive aspect of the prepara-tions for the 2014 Games was the strong emphasis on security measures. Only a few doubt that the organising com-mittee will overcome the difficulties.

“We did not choose Sochi because it is a Russian city,” says IOC president Jacques Rogge. “We chose it because it was the best choice.”

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Exotic delights to savour

What can visitors eat in Krasnaya Pol-yana? Among the effective dishes to fight hunger pangs are venison hot pot, wild-hog ribs or bear stew. You can sam-ple these exotic delights at the Vodolei restaurant in Estosadok village (at 36 Olympic Street), housed in a mysteri-ous cavern-like room with illuminated stalactites.

Czar Trout is another local delicacy. You can try the fish, prepared on a grill with fragrant herbs, at the Patskha Achishkho in Krasnaya Polyana (1 Achishkhovskaya Street). The restau-rant is set away from the main street, but this is part of its charm. Listening to the sounds of the mountain lake is more pleasant than listening to screech-ing tyres.

The alpine café 1144 is a local cult favourite. Located at Rosa Khutor X-treme Park in Estosadok village (sec-ond-tier cable car), the 1144 refers to the cafe’s elevation. You need to ride a cable car to get there and it was made famous by President Vladimir Putin, who once ate pancakes with honey at the cafe.

There is no shortage of summer en-tertainment in Krasnaya Polyana.

You can go rafting on the “Rage” (the locals’ name for the Mzymta River). If you want to go careering down near -vertical slopes full of overgrown shrubs in an off-road vehicle, then you can give “jeeping” a try. If you prefer a more re-laxed pace, then you can take a walk to

Daniyl Kolomiychuk

the Khmelevsky Lakes and see the fas-cinating tritons that live there. You can also give crossbow shooting a go.

The list goes on. Russian tradition dictates that in winter, the thing to do is visit the local bath house, or banya. Indeed, they have bathing down to an art in Krasnaya Polyana.

At the Four Peaks bath house (10 Es-tosadok), a honey, salt or forest-herb rubdown awaits you. At Timeskal (94 Zapovednaya Street), the steam room has been replaced by a unique, “black” mud hut, while at Kharakuge (also 94 Zapovednaya Street) you are pushed into a two-tonne water tank hung over a fire.

If you are after souvenirs, the old ba-bushkas will be selling traditional crafts, warm, woolly goat-fur socks for HK$152 and sweet honey.

Krasnaya Polyana has something for everyone.

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Visitors can enjoy a winter wonderland during Games

SOCHI

Sochi’s nearby resort area of Krasnaya Polyana has been transformed into a modern venue for the Winter Olympics.

How to get there from Hong Kong

There are no direct flights between Sochi and Hong Kong. The most convenient route in terms of dura-tion and the number of changes is through Moscow’s Sheremetyevo Airport. Aeroflot is the only air-line that flies the Hong Kong-Mos-cow-Sochi route. It takes 16 hours on average, including the stopover in the Russian capital. But there is a viable alternative through S7, another Russian airline that has formed an alliance with Cathay Pa-cific. And ahead of Sochi 2014, Russian Railways has built a line connecting Sochi Airport to Kras-naya Polyana.

The upcoming Winter Olympics has transformed Sochi’s nearby resort area of Krasnaya Polyana.

Hard to reach, the region now attracts visitors with sophisticated cable cars, five-star hotels and traditional Russian saunas. From skiing to crossbow shoot-ing, there is plenty to do here, even be-fore the Games start.

Two decades ago, a trip to Krasnaya Polyana was a challenging and peril-ous quest. Options for getting there were severely limited. You could throw your things into a flimsy helicopter and hope for the best, or spend three-and-a-half terror-stricken hours negotiating the winding mountain roads while staring into the abyss.

Admittedly, the road to Akhshtyrsky Canyon is more or less trouble-free. Still, once you hit the Royal Road – a pathway carved through rock by Turk-ish prisoners – any pretence of calm vanishes.

On the right is a near vertical drop, at the bottom of which lies the mangled corpses of Ladas and UAZ cars in the muddy waters of the Mzymta River. On the left is a bombardment of rock fragments, falling like bread crumbs on to the roof of whatever vehicle you are travelling in. And leaving the work to professionals does not make things easier.

If you are making the trip by bus, tour guides would regularly prod passengers with the obligatory joke: “The driver’s just as scared as we all are; that’s why he’s driving with his eyes closed.”

These days, a trip to the mountains is a pleasurable and uncomplicated af-fair. The menacing roads are a thing of the past. Neatly cut tunnels have re-duced the travel time to nearby Sochi to 30 minutes. More comfort and ease is expected by the time the Olympic Games arrive, thanks to a monorail from the airport to the old heliport.

With less than a year to go, Krasnaya Polyana looks less like a land that time forgot. Leafy pathways have turned into highways. Bushes have been hacked away to make room for cable-car stops, which are perched on top of tripods that seem straight out of a sci-fi novel. Quaint bungalows have given way to modern chalets with floor-to-ceiling windows.

Why do people go to Krasnaya Pol-yana? The answer is pretty straightfor-ward — they come for the snow.

Russia has its fair share of snow, but only here can the proximity to the sea turn your holiday into a kind of surreal, roller-coaster ride.

You can go for a swim in the sea and, an hour later, your skis are crunching fresh, marzipan-textured snow.

Sombre foresters and the occasional meteorologist have been replaced by trendy young Eastern Europeans.

Daniyl Kolomiychuk The Sochi Olympics have been split into a coastal cluster and a mountain cluster. The mountain cluster is one of the oldest places in Krasnaya Polyana – a “Plymouth Rock” of sorts, on which the first wave of migrants crashed.

Like all coastal areas, Krasnaya Pol-yana was originally populated by new-comers. In the 19th century, descend-ants of Moldovans, Pontic Greeks and Estonians found shelter here.

The mountain cluster includes the Olympic biathlon and ski complexes, the bobsleigh track, the ski centre, the ski-jump complex, as well as the snow-board park and the freestyle centre.

Almost all of the facilities are ready for competition. Even with a year to go before the opening of the Games, there are plenty of places to have a great time.

A sophisticated cable-car network is strung across Psekhako Ridge,

where you can travel like a prince in a closed carriage with tinted windows.

If your tastes are more modest, then you can be

whisked away on a plastic chair, legs dan-gling in the open air.

If you plan on ski-ing, then you had better be sure of your abilities before you have a go – there are

your standard green slopes for beginners

and black slopes for ad-vanced skiers.


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Firm fuelled by power demand

Russia is capable of doing everything, from building nuclear power plants to providing financing.

Rosatom enjoys a boost in orders despite the Fukushima nuclear disaster, writes Andrei Reznichenko

ENERGYDespite fears that the acci-dent at Japan’s Fukushima nuclear power plant in March 2011 would slow down the global growth rate

of the nuclear sector, the Russian state-owned nuclear monopoly Rosatom ended last year on an optimistic note.

Its portfolio of orders was nearly HK$147.2 billion higher than in 2011, the company’s representatives said dur-ing the Asia Nuclear Business Platform in Hong Kong last month.

The Fukushima disaster has spurred competition on the nuclear energy mar-ket, with the main criterion for custom-ers now being safety and durability.

The fiercest competition has been in the fastest-growing and most earth-quake-prone part of the world, Asia-Pacific, where reactors have to meet rigorous standards.

The task of building a nuclear infra-structure from scratch is particularly relevant for countries now developing a nuclear power industry, because the infrastructure to ensure the operation and regulation of a nuclear programme is the basis for a peaceful nuclear sec-tor.

Rosatom is a key player, with the company specialising in nuclear infra-structures customised for specific countries.

“Russia is capable of doing every-thing, from building nuclear power

plants to providing financing to trans-ferring technology, training staff, pro-viding legal support and creating the necessary nuclear infrastructure,” Ru-satom overseas vice-president Yuri Sokolov told Russia and Greater China. “We are already successfully co-oper-ating with Vietnam, China, India and Bangladesh and are ready to expand the geography.”

In Hong Kong, Russia presented a new approach to international co-op-eration on small reactors and nuclear medicine.

Russia used the forum to unveil some new designs, including the fast neutron modular reactor SVBR-100. Russian submarines use similar reac-tors. Low-power reactors are one of the most promising areas in modern nu-clear energy.

“The SVBR-100 project ... is based on a technology that has enjoyed over 80 reactor years of accident-free op-eration in nuclear propulsion systems,” says Sergey Boyarkin, an executive vice-presidential adviser at Rusatom Over-seas, a subsidiary of Rosatom.

Several European nuclear compa-nies have already joined the project. Research and development on the pro-ject and the design for the reactor and the test power unit are due for com-pletion by the end of next year and the power start-up set for 2017.

The SVBR-100 may become the

world’s first commercial medium-pow-er reactor and take up 10 to 15 per cent of the global market for small and me-dium power nuclear reactors.

“Fast reactors will help us answer one of the most pressing questions in atomic power generation: what is to be done with spent fuel from operat-ing nuclear power plants. Russia has extensive experience with fast neutron reactors.

“Not only in terms of design but also in terms of test operation of these re-actors that could become a reliable source of energy for centuries to come,” says Professor Leonid Bolshov, head of the Nuclear Safety Institute at the Russian Academy of Sciences.

Rosatom also presented its latest achievements in radiation technology, covering three main areas: nuclear medicine, ecology and radiation ster-ilisation, including plans for Russian-made equipment for radionuclide di-agnostics and radiation therapy; projects for building high-tech indus-trial facilities – radiation centres and plants for the sterilisation of medical waste.

Asia’s growth opens new doorsThe development of Asian economies is often seen as a miracle in Russia. Most countries in the region have experienced explosive economic growth in the past few decades, developing new business and financial ties with Russia. Finan-cial market development also contin-ues. Many global investors have in-creased their asset allocations to Asia, particularly within fixed income mar-kets, encouraged by a favourable mac-roeconomic backdrop and the stability and strength in the underlying sover-eign finances of many Asian countries.

Over the past 15 years, Asia’s role in the Russian economy has changed re-markably, especially that of China. “China has become the largest trading partner of Russia,” Damian Chunilal, CEO Asia for VTB Capital says.

“This is mainly through the circula-tion of goods, services and ideas. How-ever, this has yet to be supported by the flow of capital and FDI in a way that has been seen between Russia and West-ern countries.” VTB Capital believes trade and finance flows between Rus-sia and Asia will increase. “The firm is well-positioned to participate in these flows and support clients”, Chunilal says. In particular Chinese investors, are showing great interest in Russia.

VTB Capital, the investment busi-ness of VTB Group, the second largest bank in Russia, has been in Asia since 2008. The company, representing glob-al markets and global banking busi-nesses in the region, has offices in Sin-gapore and Hong Kong. In that time, VTB Capital has grown into the lead-ing investment bank in Russia and the Commonwealth of Independent States (CIS), according to Dealogic, Bloomb-erg and Thomson Reuters. Last year, VTB Capital became the first Russian bank to enter the top-20 advisors on global mergers and acquisitions in the Dealogic rankings.

VTB Capital is expanding its activi-ties in Asia has been active in inter-mediating capital flows between Asia and Russia.

Chunilal says sizeable Russian-Asia trade flows will provide a major boost for the development of the cross bor-der financial services market between Asia and Russia. As a result, VTB Cap-ital is strengthening its Asia team. Sev-eral appointments have been made in the Hong Kong and Singapore offices in the past six months and plans are afoot to expand corporate and inves-tor coverage in Asia generally and on-shore and offshore in China specifi-cally.

However, one must not be compla-cent. Asian economies still remain vul-nerable to potential volatility in cross-border capital f lows given the inter-connectedness of trade and cap-ital flows.

As we saw in 2008, a sharp fall in ex-ports to other developed markets, a re-versal of foreign investment flows into Asia and restriction of credit supply as a result of rapid foreign bank delever-aging can severely impact short term economic growth. Within Asia the spe-cific economic situation differs with some economies arguably needing to rebalance from investment-led to con-sumption-led growth. Loan growth re-mains high in some countries and it remains to be seen whether this has been at the cost of some deterioration in asset quality.

COMMENT

ELENA SHIPILOVARGC BUSINESS EDITOR

Region’s role in Russian economics has changed remarkably, especially that of China

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Global economic developments re-main challenging. As recent events have demonstrated, the eurozone cri-sis remains unresolved and ongoing public and private sector debt delev-eraging in the West plus the impact of bank recapitalization may result in a sustained period of lower growth. Moreover, sovereign debt problems are not confined to the eurozone – both the US and the UK face challenges over the longer-term in moving fiscal poli-cy on to a more sustainable basis.

Nevertheless, the longer-term pic-ture for Asian economies and its finan-cial markets is positive. The lessons from the 1998 crisis have been learnt and sovereign and private sector bal-ance sheets and for the most part strong. Asia as a region has some de-gree of immunity and a greater flexi-bility to respond to any future econom-ic or financial crisis. We expect to continue to see the region enjoy above average sustainable economic growth over the longer term. We also expect trade and financial market flows be-tween Russia and the rest of the Asia Pacific region continue to grow rapid-ly in the years ahead and regional co-operation increase as a result.

11


Girls put their best look forward

Irina Ford, Natalya Nemchinova

The international advertising agency DDB Russia once worked on a cam-paign for a cream by RoC skincare that aired in several markets. The commer-cial, showing a woman looking at her-self in the mirror, smiling at the results of her cream, won acclaim in France, but was a failure in Russia, scoring low on believability and likeability.

When the DDB team introduced a man looking at the woman in admira-tion, the attitudes of Russians changed markedly.

DDB’s experience is an example of what beauty experts consider the key difference between Russian and West-ern women. Ads directed at European women emphasise that a product can make the user feel comfortable in her skin; they often show women wearing comfortable clothes and light make-up that underlines natural beauty.

But Russian women are thought to

The reason Russian women dress the way they do is because of their background

want to look their best 24/7, preferring to see women in ads with the kind of make-up and attractive clothes they see on the streets in Moscow.

Natalya Tsel, a linguist from St Pe-tersburg who studied in the United States, says many Russian women find it hard to comprehend Americans’ love for casual style.

“How do American women dress and apply make-up? They’d use the words ‘comfortable’ and ‘practical’, but we’d say ‘careless’ and ‘dull’,” Tsel says.

Stylist Natalya Tan explains the dif-ference: “The reason Russian women dress the way they do is because of their background.

“Our art, our national costume and architecture build on the heritage of the Scythians, Mongols and Byzantines. Look at the Orthodox churches, their luscious paintings and the shining domes. This is the cultural code that defines our taste.”

Studies show Russian women spend generously on cosmetics. Indeed, Eu-romonitor notes they devote a higher proportion of their income to cosmet-ics than European women.

Women in Spain, Portugal and Greece spend about HK$1,010 on cosmetics a year; French women spend HK$2,000; Swiss women HK$1,800; and British women HK$1,500.

A Russian woman spends about HK$700 a year, but that is still consid-ered high, given that monthly salaries averaged HK$5,900 last year, compared with HK$21,000 in Spain and HK$19,500 in Greece.

The beauty industry in Russia is thought to be among those with the most potential for profitability.

Ageing gracefullyNot all retirees want to stay home and babysit, writes Natalia Yamnitskaya

LIFESTYLE

Olga Kuznetsova glides across the floor of a dance studio in an elegant dress and heels. At 55, she is the picture of poise and grace, even though,

age-wise, she qualifies as a babushka, the Russian word for grandmother.

Despite her recent retirement from work, Kuznetsova refuses to retire from life. She looks at it as a chance to do something she has long dreamed of: learning to dance the tango.

And she is not deterred by being the oldest in her group. Kuznetsova’s new routine involves meeting friends after class, and she is planning a trip to Eu-rope with them next month.

“I raised a child, worked three jobs, and now just want to live for myself,” she said.

While such activities might be com-mon for retired women in other parts of the world, in Russia they are a nov-elty. The traditional image of Russian grannies is of old ladies sitting on bench-es outside apartment buildings, watch-ing their grandchildren play nearby as they discuss the latest news and gossip.

But exposure to globetrotting retir-ees – in person and through movies and magazines – has given Russian women new ideas of what to do after escaping the daily grind. Today, retirement can mean a new sport or hobby, chatting online or helping families and society.

“My mother is 62 years old, and she is by no means a babushka,” said Yulia Bushueva, managing director of Arbat Capital’s New Kremlin Fund. “She re-tired a couple of years ago, started driv-ing, and is now thinking about courses in photography and English.”

Others are using technology for a new take on old hobbies.

“My grandmother downloads com-puterised embroidery patterns and uses

Grandmothers take centre stage Paying for retirement

The Buranovskiye Babushki (The Grandmothers from Buranovo), a folk collective with an average age of 75, showed the world that grow-ing old doesn’t have to mean slowing down when they represented Russia in last year’s Eurovision song con-

test. The group, from the Republic of Udmurtia in the Urals region, dance in traditional birch-bark shoes and rehashed hits by Russian and foreign performers in the Udmurt language. They took second place with their rousing song Party for Everybody.

them in a special sewing machine,” says student Yulia Vedinina. “If she doesn’t understand something, she takes a video tutorial on Skype.”

Body-and-soul courses aimed at older people are popping up everywhere in Moscow. A dance school for seniors re-cently opened at the All-Russia Exhibi-tion Centre (VVTs) in northern Mos-cow. And the Mitino social service centre in the Moscow region now hosts an amateur puppet theatre. Under the Age of Happiness project, set up by

Fitness classes are among the many new activities older women are embracing.

Vladimir Yakovlev, founder of the busi-ness daily Kommersant, seminars are held on how to live, eat and stay busy, regardless of age and social stereotypes.

And this more active type of retire-ment is not only on the rise in Moscow and St Petersburg. Gertruda Pankrushi-na, a former anaesthesiologist from No-vosibirsk, enrolled in a computer course at the age of 70.

“It wasn’t easy, but I got through it ... I now Skype my grandchildren, write e-mails, and get recipes online,” she said.

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Dominating the skyline is the Kazan Kremlin, which is an ancient fortress.

Kazan’s appeal to visitors is its mix of cultures.

Future lies in the past


Like Sochi, Kazan has no direct air links with Hong Kong. The city is on the banks of the River Volga, and a 90-minute flight from Moscow.

The shortest routes go through Moscow’s Sheremetyevo Internation-al Airport.

Only one airline offers the Hong Kong-Moscow-Kazan route and that is Aeroflot. S7 and Cathay Pacific al-so fly to Moscow. A trip to Kazan can be easily arranged during a stay in Moscow.

Instead of hopping between air-ports, you could take an evening train from Moscow to Kazan.

Kazan is the best place to discover the connection between Europe and Asia, writes Toby Fisher

TRAVEL

When Kazan celebrated its 1,000th anniversary in 2005, it marked the start of a transformation for the city, as it earned recogni-

tion as the “Third Capital of Russia” and became a tourist haven for Russians and foreigners.

The Kazan mayor’s office patented the brand name “Third Capital of Rus-sia” for the nominal sum of HK$10,100 and secured this honorary position after Moscow and St Petersburg.

Its raised status also helped to attract some major events. From July 6-17, Kazan will host the 2013 World Student Olympics, or Universiade.

The city has changed so much since the anniversary that old guidebooks are now useless. The best way to discover this rising metropolis is to simply go there. Even for Russians, visiting Kazan is like going to another country.

The city was built on the River Volga, about 965km east of Moscow. Kazan is the capital of the Republic of Tatarstan – whose population is almost evenly split between the Muslim Tatar and Or-thodox Russian communities. Kazan’s appeal is rooted in this mix of cultures, which is reflected in the architecture and cultural offerings.

Dominating the skyline is the Kazan Kremlin, an ancient fortress. There is a large mosque and a Russian Ortho-dox cathedral. Next to the mosque, the Annunciation Cathedral is revered by Orthodox believers as the home of the icon of Our Lady of Kazan, one of the holiest in Russian Orthodoxy, built from 1554-62.

In addition to religious sites, the Krem-lin also features the Söyembikä Tower,

which leans on its side. English-lan-guage tours are available.

The River Kazanka joins the Volga at Kazan and offers a good view of the city’s modern face, including the Millenni-um Bridge, built in 2005 for the 1,000th anniversary celebrations.

Heading back from the river, you can see its Russian heritage in all its glory. Tatarstan became part of Russia dur-ing the reign of Ivan IV (the Terrible), whose forces put the city under siege in 1552.

The Kazan Theatre of Opera and Bal-let dominates Liberty Square, and clos-er to the city centre is Kazan Federal University, near Bauman Street, a long pedestrian walk at the heart of the city.

Here the souvenir shops alternate with restaurants, many offering Turk-ish cuisine – a testament to the ethnic ties between Tatar and Turkish cultures. You’ll also find traditional Tatar dishes – the honey-coated fried dough known as chak-chak, served with tea, comes highly recommended.

Across the Bulak canal is Kazan’s cen-tral market, which shouldn’t be missed.

Where to go what to eat in the city

The Al-Marjani Mosque, which is the oldest mosque in Tatarstan, is a must for visitors.

You will receive a warm welcome and be taken on a short tour that is free of charge. Don’t forget to take your shoes off when you enter the mosque.

If you want to grab a bite to eat, drink some tasty tea and stock up on souvenirs, you need to pop into the Ebivol gallery, near Ulitsa Parizh-skoy Kommuny (Paris Commune Street). Here you can buy pictures by Kazan artists. There is also a tea

shop and the Altyn Ay workshop, which specialises in Islamic and Ta-tar clothes. These range in price from HK$201 for a belt or purse to HK$1,030 or more for a Tatar cos-tume.

If you are looking for edible souve-nirs, go to one of the many shops in the Bahetle chain. At Bahetle, you can buy real Tatar groceries used in Tatar cuisine, and small souvenirs for the home. The prices will be a little high-er than in ordinary supermarkets, but so will the quality. There are also Ba-hetle supermarkets in Moscow.

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Facts about Antarctica

Bellingshausen Station holds The Church of the Holy Trinity,

the only permanently staffed Eastern Orthodox church in

Antarctica.

TRAVEL

Tourists can enjoy fishing, look at penguins, get married and run marathons, writes Daria Gonzalez

Oasis at ice station George

For centuries, the existence of a south-ern continent was a moot topic. The world thought it was joined by land to southern hemisphere countries and maps even linked this so-called conti-nent to Australia or South America.

Only in January 1820 did a Russian scientific expedition, headed by Fabian von Bellingshausen and Mikhail Laza-rev, prove that Antarctica was not con-nected to any other continent. Their ex-pedition on the Vostok and Mir sloops, which bequeathed their names to two research stations, skirted the continent between the 60th and 70th parallels. The first humans to set foot on the Ant-arctic ice were, in all probability, the crew of the American vessel Cecilia.

Under the International Antarctic Treaty, signed on December 1, 1959, no country can claim Antarctica. Only scientific activity is permitted. There are 28 countries party to the treaty and doz-ens with observer status.

The region is home to some 45 re-search stations, seven Russian. Antarc-tica has no permanent population. De-pending on the season, the number of

One way to reach Antarctica is by sea, from Argentina.

people living there ranges from 4,000 to 1,000 in winter.

Antarctica has been assigned the in-ternet domain .aq and the dialing code +672.

In the 1980s, Antarctica was declared a nuclear-free zone.

If Antarctica didn’t have its ice cover it would be an archipelago like the islands of French Polyne-sia: a few volcanic peaks rising above the water, underwater rocks

and wide straits.King George Island (or Waterloo Is-

land) would form a small part of this Antarctic archipelago. Most of the is-land is ice dotted with small “oases” of volcanic rock.

Not only is King George Island the closest point between Antarctica and the other continents, it is also the most multinational island in this latitude. The population consists of research station staff from Argentina, Brazil, Po-land, Russia, China, Uruguay, Peru, Chile and South Korea.

The Antarctic doesn’t belong to anyone. There are no authori-ties, no borders and no fences. Visitors can catch a range of Antarctic fish and they can look at whales, penguins and seals at close quarters. In sum-mer’s sub-zero temperatures, people swim in the sea and sunbathe in light reflected from the ice.

Compared to the largely unpop-ulated wastes of the Arctic, King George Island is a megalopolis. The Frei base and the Chilean polar village are separated from the Russian Bell-ingshausen station by a stream, and you can reach the appropriately named “Great Wall” Chinese base in less than an hour by snowmobile.

When scientists first came to the Rus-sian station in 1968, 11 people stayed there for the winter. Now, 23 people spend the winter there each year.

Because of the mild climate (minus 6.8 degrees Celsius is the average tem-perature in the coldest month of Au-gust rising to minus 1.1 degrees dur-ing the warmth of February), Russian scientists call it a “resort.”

For tourists who like extremes, King George is a paradise. There are frequent charter ships full of people dreaming of seeing penguins and catching fish next to whales and seals. One of the three stationary hotels on Antarctica belongs to the Bellingshausen research station.

“It’s a simple set-up: two beds, lino-leum on the floor, a table and chair, walls lined with wood. But if you’ve decided to go to the South Pole, you don’t need any more than that – just the essentials,” reads the blog of one Antarctic tourist.

Travellers stay at Bellingshausen by arrangement with the Russian scien-tists who are happy to put them up, if only because they bring fresh vegeta-bles.

In addition to the tourists, the is-land’s scientists are entertained by par-ticipants in the annual Antarctic Mar-

Antarctica is not easily accessible. There are two ways to get there:

by air or by sea. Flights to Antarctica take off from

Chile’s Punta Arenas Airport, with a preliminary landing at Teniente R. Marsh Airport on one of the Antarc-tic islands.

These flights serve research sta-tions, including Russia’s Belling-shausen and China’s Changcheng.

The second option is by sea from the Argentine town of Ushuaia, where you can catch one of the

cruise ships that ply the route to the southern continent.

To get from Hong Kong to Ush-uaia requires at least two trans-fers.

The first depends on the airline, and could be in Sydney, Toronto, Doha or Istanbul.

The second is very often in Bue-nos Aires, Argentina, from where

Aerolineas Argentinas operates lo-cal flights to Ushuaia.

Russia’s research stations are ser-viced by flights from Punta Arenas and by sea on board the Akademik

Fedorov.


a t h o n . The first of these races was held in 1995. In 2012, 145 people ran through 42km of uneven, hilly ground.

The Antarctic’s first Orthodox church – The Church of the Holy Trinity – was built at the Russian base. Since its com-pletion in 2004, priests have been re-placed each year on the same sched-ule as the station staff. Some of them have been here more than once. Fa-ther Kallistrat has done two tours.

“At Epiphany we blessed the water in the lake and then sprinkled the whole station with holy water,” said Fa-ther Kallistrat.

The church now has a permanent priest, Father Grigory, who has spent 20 years in polar regions.

The stream that di-vides the Chilean and Russian sta-tions is known as “the Jordan”.

The first wedding in the Antarctic took place in this church in 2007: Ange-lina Zhuldybina, daughter of a Rus-sian polar re-searcher, mar-ried Chilean Eduardo Alia-g a I l a b a c a , who works at the Chilean base.

Fabian von Bellingshausen proved Antarctica to be a continent.

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Mumiy Troll rocks the cityTop band from Vladivostok surprises the local audience by singing in Chinese, writes Shirley Lau

CONCERT

Group has strong Asian following

Hong Kong’s incredibly varied scene is the perfect place for band

The band shot to fame in 1997, with their first album, Morskaya. Since then, Mumiy Troll have recorded a range of albums and developed a strong following in Japan, Europe and China.

“I grew up in Vladivostok, which is much closer to Asia than the West,” says frontman Ilya Lagutenko. That’s partly why the band staged a concert in Shanghai.

“The last time we went there, it was seven years ago. At the time, there was no place where you could hear proper rock ‘n’ roll music ... to-day, Shanghai is much more exciting.”

Independent radio show host Calvin Wong believes Hongkongers are usu-ally keen to see a well-known act in order to stay on top of the trends. Marco Bresciani, producer at Chan-nel V, is intrigued by how the outside world views Asia, however.

“I’d be interested to see how Mumiy Troll will perform in terms of sales and airplay,” he says.

Bresciani isn’t sure what kind of place the band would have in Hong Kong. Channel V airs a number of videos from acts around the world.

“That they use a bit of Chinese in their songs plays in their favour”, he says. “But I can imagine they will re-main a niche act over here.”

The local indie scene might offer Mumiy Troll have performed worldwide, from Japan to Greenland.

a more embracing prospect. Arthur Urquiola, a local musician, event or-ganiser and independent record la-bel founder, says Hong Kong offers the perfect ground for something different.

“Hong Kong’s a very international city and the scene here is incredibly varied, and acts that play together aren’t linked by genre”, Urquiola says. “Sometimes you’ll get strange combinations of electronica, folk and hardcore acts on the same bill – and it works.”

Urquiola sees another side of Mimiy Troll. “Personally, I’m im-pressed that they’re passionate about causes like animal welfare ... [and] raising awareness,” he says.

At the age of six, Ilya Laguten-ko was learning Putonghua at an old Chinese-language school in Vladivostok.

It was the late 1970s and sending children to a Chinese school was as fashionable as feudalism in the Soviet Union, but Lagutenko’s mother liked the school because it was only three minutes’ walk from their home. Lagutenko had no idea at the time that what he learned would come in handy in Hong Kong, three decades later.

Earlier this month at the Kowloon Bay International Trade and Exhibition Centre, Russia’s most successful band, Mumiy Troll, played their first gig in Hong Kong. After a few Russian songs, the band’s lead singer, none other than Lagutenko, amazed and amused the audience when he launched into Wo Dengzhe Ni Huilai (Waiting For You), an old Chinese song made famous in the 1940s by Bai Guang.

Lagutenko sang with a slight accent, but that didn’t stop some 450 concert-goers from applauding. More cheers ensued when he switched to the band’s English-language hits. Guitarist Yuri Tsaler, drummer Oleg Pungin and bass-ist Eugene “Sdwig” Zvidionny were not in the least bothered about Lagutenko stealing the show, as he always does.

The March 13 concert was part of the first-anniversary celebrations of the Rus-sia and Greater China (RGC) project in Hong Kong. In March 2012, the first Rus-sia and Greater China supplement ap-peared in the South China Morning Post. It has since grown into online portal rbth.asia.

“I heard that Mumiy Troll was com-ing to Asia to play in Shanghai and knew immediately that we desperately need-ed them here in Hong Kong,” said RGC’s Asia bureau chief, Mark Zavadskiy. “It took more than two months of hard work and negotiations to bring the band in, but it was worth the effort.

“Just look at this crowd,” he added, pointing to the throng at the Music Zone Hall at the exhibition centre.

The crowd was international: Russian men clad in navy striped tops embla-zoned with the name “Mumiy Troll”, perfectly coiffed Russian girls, expatri-ates of various nationalities and a mot-ley crew of local music lovers. There were no seats in the music hall, which contributed to the vibrant atmosphere and allowed the crowd to dance with out inhibitions.

“I rarely go to a concert in Hong Kong. I’d been to one and I was told: ‘Sir, please be seated.’ I was like: ‘What? Sitting in a concert?’ This one was good. It of-fered something different,” said Italian

concert-goer Marcello Dini. Formed in the early 1980s in Vladivostok, Mumiy Troll has gone from being what the So-viet authorities deemed a “socially dan-gerous” band on par with the Sex Pis-tols to a weighty musical entity in Russia with a growing international presence.

Voted “Best Band of the Millennium” in Russia, the self-proclaimed “rocka-pops” group is known for their melod-ic hard rock music and Lagutenko’s de-liberately androgynous performance style. While many still struggle to pro-nounce the band name (Moo-me Tro), audiences around world have seen the four musicians live on stage, from Japan and Kazakhstan to Greenland.

They are now setting their sights on the lucrative United States market, with an English-language album released some months ago. Yet, Asia is no less important.

A Russian whose formative years straddled the Soviet and post-Soviet eras, Lagutenko is used to change. When the Soviet Union collapsed in 1991, he was an exchange student in Dalian. Upon hearing the news during a back-packing trip near Guilin, he called the Russian embassy, inquiring what to do, but eventually decided to stay put while watching the changes unfold.

“Everything happened so quickly. I

was too young to grasp the situation. But it was a most memorable experi-ence ... I’m lucky to have lived in a time of big changes,” he said.

Today, slow-paced Vladivostok is not a place to look for drama, but life for Lagutenko and his bandmates is no less exciting.

They are working on creating a Vlad-ivostok music festival in August that will feature young musicians from all over

Asia, including Hong Kong, Korea and Singapore. “The Russian music scene is now very international, but Asia isn’t aware of that, just as people in Russia don’t know much about Asian music,” Lagutenko said. “This festival will hope-fully bring some changes.”

Mumiy Troll is now setting its sights on the lucrative United States market

Ilya Lagutenko turns up the volume at Mumiy Troll’s concert.

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Spectacular treat for HKPriceless eggs from tsar era and other items worth HK$7.75 billion on display, writes Brian Yeung

The ‘Fabergé Legacy of Imperial Russia’ exhibition will be in Hong Kong until April 29. Photo: Xinhua

The House of Fabergé made the Easter Eggs for the Russian royal family.

CULTURE

Masterpieces sold for millionsAn expert, Géza von Habsburg, once described the Fabergé Eggs as “the most expensive things that the im-perial family bought from Fabergé”. Ten years after the October revo-lution, Joseph Stalin sold many of them. Between 1930 and 1933, 14 im-perial eggs left Russia. The last sale of a Fabergé Egg was in 2007.

A Fabergé clock was sold to a Rus-sian bidder for HK$143.4 million, a record high. The Coronation Egg, presented by Tsar Nicholas II to his wife in 1897, was the second last egg sold at auction to Victor Vekselberg, chairman of Renova Group, in 2004. The final price was not disclosed, but the egg was estimated to be worth as much as HK$186 million.

These pieces of art will stay until eternity

Historic gifts made especially for the imperial courtThe Fabergé Easter Eggs are the signa-ture works of the jewellery firm House of Fabergé, founded in the Russian Em-pire in 1842. Made of precious metals or hard stones, the Easter Eggs were cre-ated for the imperial Russian court from 1885 to 1917.

Most were presented as Easter gifts in accordance with Russian tradition to exchange Easter eggs to mark the most important holiday in the Russian Or-thodox calendar.

Among the 200 items on display in Hong Kong are four Fabergé Easter Eggs

given to Alexander III and his son Nich-olas II, the last two Romanov dynasty tsars.

The Memory of Azov Easter Egg, the oldest egg in the exhibition, has a min-iature replica of the Imperial Russian Navy cruiser Pamiat Azova inside. It was presented by Alexander III to his wife Maria Feodorovna in 1891 and made to commemorate a trip by his son Nich-olas and Grand Duke George to the Rus-sian Far East. They also visited Hong Kong and Japan. Nicholas was injured in an assassination attempt during the

journey. The Trans-Siberian Train East-er Egg was presented by Nicholas II to his wife Alexandra in 1900. There is a miniature Trans-Siberian train inside the egg, which reveals Alexander III’s dream of connecting the European and Asian parts of the country. The Trans-Siberian railway was almost completed the same year and the egg was made to commemorate the project.

The Moscow Kremlin Easter Egg was a gift by Nicholas II to his wife in 1906. The egg was created in memory of Nich-olas II’s visit to Moscow with Alexandra

Fabergé Easter Eggs, the most spectacular work ever created by the House of Fabergé for the Russian court, and anoth-er 200 pieces of jewellery and

adornments worth HK$7.75 billion, are now in Hong Kong.

The pieces are on display at the Hong Kong Heritage Museum until April 29 and are expected to attract 150,000 vis-itors.

The House of Fabergé made more than 50 of its famous Easter Eggs from 1885 to 1917 for the Russian royal fam-ily. Only 42 of them have survived. The rest disappeared after the October rev-olution in 1917.

Russian art has been under-represent-ed in the Hong Kong art scene. The Fabergé Legacy of Imperial Russia exhi-bition is the largest display of Russian artefacts in Hong Kong, says Secretary for Home Affairs Tsang Tak-sing.

The exhibition is divided into three parts: History of Fabergé, A Glimpse of Imperial Russia and Representation of Beauty.

Peter Carl Fabergé, the Russian jew-eller best known for his Easter Eggs, served as the imperial supplier for Tsar Alexander III and his son Tsar Nicho-las II. The Fabergé eggs are famous be-cause of their sophisticated design and depth of history behind them.

As Victor Garanin, director of Mos-cow’s Fersman Mineralogical Museum, puts it: “They [Fabergé Easter Eggs] re-mind you that everything is temporary. We are temporary, but these pieces of art will stay until eternity.”

Made of gold, sliver, onyx and glass, the Moscow Kremlin Easter Egg imi-tated the architecture of the Cathedral of the Assumption, the oldest church in the Kremlin.

Inside the gold turret-and-wall struc-ture there is a music box that plays two traditional Easter festival hymns com-posed by AD Kastalsky (1856-1926).

Following the same pattern, there is a miniature replica of the Imperial Rus-sian Navy cruiser Pamiat Azova inside The Memory of Azov Easter Egg and a miniature Trans-Siberian train inside The Trans-Siberian Train Easter Egg.

Tatiana Muntyan, curator of the Mos-cow Kremlin Museums, says the spirit of Fabergé Egg is the surprise inside.

Aside from Fabergé Easter Eggs, the exhibition in Hong Kong features art works with an oriental touch.

The Pine-tree and Wisteria Flowers, for example, were made from gold, sil-ver, emeralds, nephrite, onyx marble and noble serpentine.

Though strikingly simple, these Fabergé flowers are very realistic and appear to be inspired by the Japanese art of flower arranging.

A Tea and Coffee Service with nine items, produced by the AM Postnikov Factory, is another display with an ori-ental touch.

Showing an image of the Kremlin on the bank of the Moscow River, this tra-ditional handcrafted niello silver tea and

coffee service was a gift presented to the wife of former Hong Kong governor Arthur Kennedy during Tsar Alexander II’s trip to Asia and the Far East in 1871 and 1872.

Hong Kong and Russia have enjoyed limited large-scale cultural co-opera-tion in the past.

Olga Dmitrieva, deputy director for promotion of educational programmes of the Moscow Kremlin Museums, de-scribes “Fabergé Legacy of Imperial Russia” as a very good start.

Tsang says that the government signed a Memorandum of Understand-ing on Cultural Co-operation with Rus-sia in 2011, and this exhibition marked the beginning of large-scale cultural col-laboration between Russia and Hong Kong.

in 1903. The egg was presented three years after the trip because of the Rus-so-Japanese war (1904-1905). The de-sign inside the egg is a music box that plays two traditional hymns.

The unfinished Constellation Tsarev-ich Easter Egg was the last egg made by the House of Fabergé.

It was in three pieces before it was restored. It was intended to commem-orate crown prince Alexei, the royal fam-ily’s hope for succession. It remained unfinished because of the October rev-olution in 1917.

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CITY

The Sedov, the world’s largest sailing ship, moors

at Ocean Terminal on its visit to Hong Kong.Sea icon

thrills locals

City gives warm welcome to world’s largest sailing ship, writes Brian Yeung

On an ordinary morning on February 22, the iconic Rus-sian sailing ship Sedov, the world’s largest of its class in operation, arrived in Vic-

toria Harbour and immediately cap-tivated Hongkongers.

To celebrate the 1,150th anniversa-ry of Russian statehood in the historic city of Velikey Novgorod, the 92-year-old Russian sailing ship embarked on a 13-month journey around the world. Before visiting Hong Kong, it docked in Manila, Vladivostok and Busan.

It will stop at 10 more ports before returning to St Petersburg. The ship moored at Ocean Terminal, where more than 21,000 visitors boarded her in three days.

Alan Chu and Mary Lee, who won the My Russian Cruise contest by Rus-sia and Greater China, met Captain Nikolay Zorchenko and spent the night of February 23 on board. They had vis-ited Moscow in 2005 and became en-amoured with Russia, which Chu de-scribed as a “big country” that combines “good and bad”, “old and modern”.

In a meet-and-greet session, Zorch-enko offered the couple traditional snacks, along with Russian tea and chocolates.

“I am impressed not only by the cap-tain’s hospitality, but also by the fact that he could point out the influence

of Chiang Kai-shek in 20th-century Chi-nese history,” Chu said. “Russia and China had gone through many ups and downs. In the last 20 years, I see they have found a way to show mutual re-spect and to develop a better future.”

In the evening, Chu and myself, as a representative of Russia and Greater China, joined a late night chat with the crew. Because they had no internet ac-cess while at sea, my smart phone with an electronic translator and network-ing apps helped break the ice.

Sailor Lyokha Bortnyuk told me how much he enjoyed the world tour, al-though he obviously wanted to stay in touch with friends and family on VKon-takte, the Russian social networking site.

Styopa Grekov, another sailor, had a bite of chocolate, looked at the pho-tograph of his girlfriend on the wall and said, “for the anniversary with my girl in Murmansk”.

Grekov studied in the School of Navy at Murmansk University, and this first world tour was part of his study pro-gramme. Before going to bed, he showed us pictures of his friends and the home he missed.

At 7am on February 24, with two days left in Hong Kong, the crew cleaned the deck. That reminded me of what Zorchenko told the Russian Geograph-ical Society: “The most important abil-ity of a sailor is the ability to live in a team.”

Regardless of how much Grekov

Gallery leads promotion of nation’s artBrian Yeung

Growing up in Moscow, Anastassia Katafygiotis started learning her art at the age of five. Her works are in demand from collectors in Europe, Asia and North America, and she has founded Anastassia’s Art House – Russian Art Academy and Red Square Gallery, one of two Russian galleries in Hong Kong.

Reflecting her fascination with col-ours, the paintings on show at the gal-lery are often vibrant, energetic and ka-leidoscopic. The Happy Valley branch hosted an exhibition, Awaiting Spring, featuring young artists Irina Kotova, who embodies the Russian folk-art tradition with a modern touch, and Anna Bere-zovskava, whose paintings are known for her beautiful fantasies and meticu-lous details.

What makes the gallery unique are the art classes, which put a strong em-phasis on the foundations for the learn-ing of traditional Russian art.

“Strong foundations should always come first to empower creativity. Aca-demic knowledge and creativity are the prerequisites in forming a personal and unique painting style,” the artist says.

Having gone through an eventful journey from unknown student to a prestigious artist, Katafygiotis is partic-ularly enthusiastic about young Rus-sian artists. Every year, she travels across Russia and meets as many young art-ists as she can.

“There are many talented art students in Russia ... only a few of them can be-come a successful artist,” she says.

Asked about her vision for Russian Art Academy and Red Square Gallery, she smiles with passion and enthusi-asm: “We are committed to building a community around Russian art,” Katafy-giotis says. “We want to empower peo-ple who are passionate about art to reach beyond and discover their inner selves and true limitless potential. We are here to offer the people in Hong Kong the ultimate art experience.”

Students learn their creative po-tential at Anastassia’s Art House.

Captain Nikolay Zorchenko greets visitors aboard the Sedov.

misses his girlfriend or Bortnyuk’s cu-riosity about posts on social network-ing sites, their duties are their priority. Standing on the deck of the Sedov, I watched the waves and felt the wind. The Pacific breakers never stopped the Sedov’s aspiration to travel the world.

Despite the many sailors and guests on board, the captain was always gen-erous and welcoming. As time goes by, the ship may get old, but the Russian soul, like its survival instinct, hospita-ble character and spirit of adventure, never gets old. Experienced sailors say the oceans always reveal something unexpected.

Slide Show atwww.rbth.asia/45349

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