Timonina Irina Professor of Economics Russian Presidential Academy of National Economy and Public Administration (RANEPA ) © Timonina 1

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Between Japan and Russia 0, 83 Between Russia and Japan 0,84 1 © Timonina 4

“Archaic” model of mutual complementarily Level of mutual complementarily within inter-company relations Structure of Russian- Japanese trade From Russia to Japan mineral fuel and metals (90%). From Japan to Russia vehicles, general engineering electronics (83%) © Timonina 5

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Agriculture, hunting and forestry (7,5) Production of vehicles and equipment (16,1) Mining and quarrying of energy minerals (13,4) Mining (10,2) © Timonina 7

Survey of JETRO 2015 In ,2% of companies reported an operating profit and forecast that they would improve upon their performance in 2015 Reasons for forecasting an “Increase” in 2015 operating profits at Russian market (multiple answers) © Timonina 8

Survey of JETRO 2015 Those Japanese companies, which decided to locate production facilities in Russia see the following challenges for their operations Challenges in terms of production (manufacturing industries only) (Multiple answers) © Timonina 9

Survey of JETRO 2015 The most dramatic change in estimates in :  78% vs. 48% (in prior year) of respondents cited currency volatility as a high risk for their business  Political instability was mentioned by 79% vs. 48% (in prior year) © Timonina 10

In 2014 Rosneft has invited Japanese partners to participate in 3 projects:  “Far East LNG"  Eastern petrochemical company (petrochemical complex at Primorye territory).  Creation of a shipbuilding cluster in the far East to support offshore oil production. Yamal LNG project : Japanese companies received major subcontracts. Major investors of the projects are independent Russian gas company Novatek (60%), Total, France (20%) and CNPC, China (20%) © Timonina 11

 … the dialogue in the energy area can radically change the level of partnership between Russia and Japan…  “in our case, when we mention the word energy bridge we are speaking not only about the primary energy resources supplies. We take into account oil, oil products, LNG and other resources supplies, counter deliveries of machinery and also assets swap. This is the kind of energy bridge I see many perspectives in, this kind of dialogue can offer possibilities for the development of our corporate cooperation. Such a bridge assumes a fundamental interdependence of energy systems and economies of both countries, de-facto it will form the basis for a strategic partnership between the countries” © Timonina 12

Cooperation between Russia and Japan is developing on “case by case” basis in following spheres:  Infrastructural systems.  Localization of production in certain spheres  R&D  Agriculture. © Timonina 13

Generally, figures, which reflect trade and investment relations between Russia and Japan, are constantly insignificant There is no clear connection between sanctions and the scale of cooperation. For both Russia and Japan the issue of diversification of external economic relations is becoming one of the priorities especially in energy sector © Timonina 14