From November 5 to 10, the 14th international business conference, "Russia and China: Expectations, Risks, Perspectives," was held in Shanghai and Beijing. The conference took a key position in the string of the "Year of Russia" events organized in China. The forum received support from the Foreign Ministry, Economy Ministry, the Russian Business Council of the Shanghai Cooperation Organization and the Russian Chamber of Commerce and Industry.

The crucial question of whether China is "friend or foe" was on the agenda. How do we expand into the Chinese market and what should the Chinese do in order to develop the Russian one? Conference participants agreed with Ernst&Young's managing partner Karl Johansson when he said that what is about to take place between China and Russia over the next decade would have a considerable impact on the rest of the world. However, Russian business is far from thinking that Russian-Chinese relations are ideal; we restrain from taking the plunge and embracing our Eastern neighbor with open arms and open hearts. "I believe that our European-Asian studies specialists are very probably grossly mistaken about breaking off all business relations with the West and encouraging further rapprochement with China," General Director of BashKhim Sergei Chernikov said. "I'm positive that most business communities can't accept China as an ideological point of reference. Moreover, in practical terms, we have more than a couple of clouds on our common horizon. We're heading their way in good faith and a smile on our face but all we get is prohibitive taxes as big as the Great Wall of China."

Nevertheless, conference members called attention to the fact that Russia can make the most of the experience China has gained so far in various fields. President of OPORA Russia Sergei Borisov believes the government's attitude towards small business in China to be a model Russian authorities should follow: it accounts for over 70 percent of the Chinese GDP, versus 13-15 percent of the Russian gross domestic product. The President of Barkli construction company Leonid Kazinets noted that Chinese companies are very thoughtful about labor management and boast excellent productivity, as well as technology validation. According to Kazinets, these particular features make China one of the most fearsome competitors in the world, enabling it to permeate any sector in any country.

The discussion took place at the chic Shanghai Grand Hyatt Hotel, where around 300 conference participants were put up by RBC. On the guest list were the Deputy Chairwoman of the Bank of Russia Tatiana Paramonova, Vice Speaker of the State Duma Sergei Baburin, State Duma Member Sergei Glaziev, Vice Speaker of the Federation Council Dmitry Mezentsev, Senators Vladimir Gusev and Igor Rogachev, the President of the Foundation for support of legislative initiatives Grigory Tomchin, the President of MICEX Alexander Potyomkin, the Chairman of YUKOS's Board of Directors Viktor Gerashchenko, General Director of PIOglobal Asset Management Andrei Uspensky, as well as other well known politicians, businessmen, and public figures. It was not only the Ministers and businessmen who carefully prepared their speeches: "I have never written an eight-page report before," Russian pop singer Anita Tsoi confided. "I'm drawing some parallels between Russia and China, comparing them culturally, socially, economically and politically in my paper."

At the opening of the business forum in Shanghai, RBC's General Director Yury Rovensky mentioned that "China has secured a special place in Russian business plans". Small-scale "suitcase" trading is now a thing of the past, as trade between the two countries has been growing steadily by 30 percent annually over the last seven years. Being the leading business information provider, RBC is actively involved in the process of the countries' mutual rapprochement: "we're making an effort to create new opportunities and find common ground between the two nations." Before the conference's kick-off, a reception was arranged, followed by a fabulous concert where the group Mumiy Troll performed as a special treat. In the Empire-style Okura Garden Hotel restaurant, Ilya Lagutenko, the lead singer of Mumiy Troll, performed in the vocal style 'Vadim Kozin meets Alexander Vertinsky' as he presented his new program "Salonnye Vstrechi". Hennessy served as the official sponsor of the conference, warming the cockles of the guests' hearts and creating just the right ambiance at the dinner party before the opening of the forum and at the gala dinner at the Okura Garden Hotel. Participants of the "Simplicity in Luxury" round-table on The Emperor's Orchid ship, drew inspiration from the expensive drink as they discussed glamour and luxury, glass in hand.

The official closing of the Year of Russia in China concluded with about two dozen agreements. Among them was a collaborative Russian-Chinese space exploration program for 2007-2009, with the Moon development program receiving particular emphasis. The combination of China's financial means and Russia's technology can open the door to colonizing the natural satellite and moving even farther beyond to Mars. Back on the Earth, however, the Chinese are keen to process raw materials on Russian soil. In order to accomplish this, Chinese specialists need unhindered access to Russia, import duties relief for equipment and economic advantages for the Russian-Chinese technology and research park.

Russia has its own priorities, as it is interested in totally restructuring its existing trading system with China, an ongoing topic of conversation at the conference. According to Foreign Minister Andrei Kondakov, raw materials account for 35 percent of Russian exports to China. Meanwhile, engineering exports have plummeted from 20 percent only a few years ago to its current level at 2-3 percent.

The ways and means of tipping the balance were discussed at topical sessions dedicated to financial markets, transport, the fuel and industry complex, engineering and other sectors. With this in mind, Deputy Prime Minister Alexander Zhukov noted that Russia was intent to cut lumber exports to China. Instead, there are plans to build two large wood mills on Russian territory with Chinese money, but it is not simply a matter of Chinese investment in Russia. Russian companies are looking to expand into the Celestial Empire, too. According to the Deputy Director for Corporative Development Department of Vneshtorgbank, Yekatherina Petelina, as of 2008, VTB will be set to open its first branch in Shanghai.

In Deputy Prime Minister Alexander Zhukov's opinion, the Russian-Chinese economic cooperation is certain to have immense prospects overall. He called attention to the task of doubling trade to $60bn by 2010, noting that it was "quite feasible". As for Chinese investment in Russia, it can be expected to reach $12bn by 2020 versus $1bn today, according to the Deputy PM.