Question: How did the talks go? Do you think that the Russian-Chinese relationship will be successful following the change of leadership in China? Have there been any contacts? What do you, as the co-chairman of the intergovernmental commission, think about the future of our bilateral relations?

Dmitry Rogozin: Shortly before the arrival of the high-ranking Chinese delegation, the supreme leadership of the country, elected at the recent congress of the Communist Party of China, including Mr Xi Jinping, made a statement saying that China’s new development strategy will focus on realising the so-called Chinese dream, which provides for creating a society of prosperity and reclaiming the status of a great power. We should take this into account. Therefore, we proceed from the belief that a new impetus to the development of the already strong and well developed Chinese economy would greatly facilitate the strengthening of bilateral relations. In fact, Russia and China are not only large, neighbouring great powers, but also countries that have a clear understanding that global policy in the 21st century will be made in the Asia-Pacific region. A combination of Russian and Chinese interests and the possibility to combine them in the areas where they coincide will be very important for Russia, because it has set the course for a full-scale economic presence in the Russian Far East. It is extremely important for us to ensure a balanced development of the country. President Vladimir Putin emphasised this at his recent meeting with government officials responsible for the socio-economic and political development of the Far East and the Trans-Baikal Territory. This is why we are trying to integrate all these processes. During our discussion yesterday, prior to the prime ministers’ meeting, we analysed all projects through the prism of our interests in the Far East and the vast Trans-Baikal Territory, trying to determine Russia’s interests and adopt a clear-cut view on its prospects in the entire Asia and Pacific Region.

Yesterday my colleagues, deputy prime ministers Arkady Dvorkovich and Olga Golodets, held talks with our Chinese partners. We reviewed the issues related to the new impetus in the development of our high-tech cooperation. In part, we have achieved considerable progress in our nuclear energy cooperation – we have agreed to hold additional consultations on expanding Russia’s nuclear presence after the first concrete arrives on the sites of energy unit 3 and unit 4 of the Tianwan Nuclear Power Station. We will hold additional consultations to expand Russia’s presence at other facilities. I’m referring to the third and fourth stages in its construction, notably energy units 5, 6 and 8. We have our own ambitions there. We have something to offer our partners. We consider Russian nuclear energy technology to be very sophisticated and safe. Many years ago we had the Chernobyl tragedy, but we have drawn the right lessons from it. This is why we can now offer our partners and neighbours the safest technology on Earth. This is the first point.

Now the second point. We also discussed other projects, including those in the nuclear sphere. Thus, we discussed cooperation under the programmes of the Rosatom State Corporation to build floating nuclear thermal power stations. Naturally, considering certain export control restrictions on all countries we are cooperating with in this sphere, we will be prepared to work on turnkey projects.

As for other projects, I can say that we have launched in Moscow a large-scale project to build a long-haul wide-body aircraft. Russia has the technology for it and could compete with Boeing and Airbus in this sphere. We can produce it, but the problem is that we won’t be able to make full use of these aircraft on our domestic market even despite having many time zones. After all, the Russian population is not very large or mobile. We could only use these aircraft at home if we are able to use them on the Chinese air traffic market. Yesterday we discussed this and agreed to start working on this major project in more detail in the next few days. This project does not overlap with independent aircraft-building programmes in Russia and China. Before, we talked about it as if it were our Lord’s Prayer, our hallmark, though nothing was done in practice. Now the Russian and Chinese governments have instructed their aircraft-building companies to start working on this project.

I’d like to make one more important note. We have practically resolved the issue of what was owed to the People’s Republic of China by the former Soviet Union and hence the Russian Federation. The debt was about 450 million Swiss francs. This issue was blocked several years ago because… Although we agreed on paying China back with Kamov helicopters, there was a problem with one institute, the Budker Institute, which provided China with its services and commodities back. Its debt was not written off and, as a result, the institute found itself in a difficult position. Moreover, the entire process of improving bilateral financial relations was frozen. Yesterday we came to terms on resolving this issue before the end of December.

Question: Are you saying that the debt will be written off?

Dmitry Rogozin: Yes, it will be written off from this institute and the issue of helicopter supplies to China will be resolved.

Question: What is the approximate debt?

Dmitry Rogozin: 441 million Swiss francs.

Question: How much did the institute owe?

Dmitry Rogozin: It owed 1.5 million francs – about 1.5 million. I believe that this issue would have been a chronic headache for our finance ministries, but we have finally solved the problem. This is important.

I would like to say a few words about the agreements that were signed yesterday. We will also provide you with information about a series of business initiatives. Today, my Chinese colleague and I opened the Russian-Chinese Economic Forum at the International Trade Centre. Yesterday, after our commission's session on preparing regular prime minister meetings, we attended the signing of agreements between Russia’s Sberbank and China’s Development Bank and Agricultural Bank. This is also significant because China will now start advancing funds for major investment projects on developing regional and interstate cooperation. Yesterday, this system was streamlined by the signing of the agreements.

For the most part, our Chinese partners met with the new Government of Russia today, as we bid farewell to the people whom we have known over the past decade. We know who will succeed them. We know who these individuals are, whom the media have dubbed the “dream team”. The new Chinese leadership's dream is to implement this new strategy. It is important for us to understand and to integrate this strategy into the strategies and the plans of the Russian economy – particularly into the vital areas of the Far East and the Trans-Baikal Region.

Question: Mr Rogozin, may I ask you a question please? With regard to the joint aircraft project, who was involved from the Russian and the Chinese sides? Is there at least an understanding of where it will be assembled and what parts will be supplied by China? The number of seats maybe?

Dmitry Rogozin: These calculations should be made based on market needs. So far, this project has merely been discussed – no one has sat down and crunched the numbers. This aircraft may have varying seating capacities, but, we should focus on a wide-body aircraft, i.e. a large-capacity, heavy-duty transport aircraft. In fact, this aircraft could become a competitor to such major manufacturers as Boeing and Airbus. You know what we are talking about, so you can use your imagination.

There are exotic, fantastic ideas proposed by Russian aircraft manufacturers that are prepared to design an aircraft seating 1,000 passengers, for example. I believe that would be an unnecessarily large plane. Things should be based on market demand. Clearly, we, Russians, can take up anything you throw our way with our ability to think big and take on the most unlikely projects. Our ambitions are clear – Russian spacecraft have always been plying the universe and what not. However, life has changed, and market demand has become the most important criterion.

The proposal is ready. Most likely, the United Aircraft Corporation, namely, the Ilyushin Design Bureau, will be in charge of this project from the Russian side.

Question: I see. Do you know – I digress – if the contract between the Ministry of Defence and Iveco to construct armoured vehicles in Russia has been terminated?

Dmitry Rogozin: No, it hasn’t. First, we went fairly far with the contract, and second, I'm going to Italy next week where I will meet with my colleagues from the Italian government. Our delegation will include Deputy Defence Minister for Armaments Yury Borisov, with whom I worked in the Military and Industrial Commission. True, we want to give a different spin to our contract with Iveco. What we need is not a CKD assembly where we screw on a bumper and called it the Russian-made Rys vehicle. That would be the wrong thing to do. From now on, such contracts will be signed not by the Ministry of Defence, but by the defence industry because the point of buying foreign-made military or dual-use technology is to improve the Russian industry. Thus, the industry should localise production at its own manufacturing facilities, and then see if it is profitable. Specifically, the KAMAZ lorry manufacturer will cooperate with Iveco under the contract. During the Italian trip next week, we will identify the level of localisation with the Italian side. In other words, we want to understand if this vehicle will really improve our technical skills.

Question: Mr Rogozin, several coal agreements have been announced. Have they also been signed?

Dmitry Rogozin: No, not for coal. Yesterday, Mr Dvorkovich (Arkady Dvorkovich, Deputy Prime Minister) reached verbal arrangements with regard to signing such agreements. They were announced at the meeting of the prime ministers today. They will most likely be signed in the near future.

Question: Has military and technological cooperation with China been discussed? We had an intellectual property dispute with them concerning aircraft and some other equipment. An off-the-topic question, if you will – who will lead the Russian DARPA (Advanced Research Foundation)?

Dmitry Rogozin: We have a special commission on military and technical cooperation with China. It is headed by Minister of Defence Sergei Shoigu. He was in China in the second half of November and made a very good impression on his Chinese colleagues. We do not see any major problems in our military and technical relations with China. We have resolved the problem and we are very close to resolving the issue of supplying Su-27 and Su-35 aircraft to China. In a word, we are making headway in this area. China let us know that they are fully cognizant of our message about respecting the intellectual property of Russian manufacturers. Thus, this agreement will be put together and signed in the near future because without it we cannot start the deliveries. We have discussed this. Unfortunately, even NATO occasionally violates our intellectual property rights. I have mentioned this many times – the Kalashnikov brand is used in Eastern Europe, but they are not paying us royalties to do so. Thus, we will work with the EU to resolve this issue as well. We agreed with the Chinese that we could supply them this equipment provided they respect our intellectual property rights. With regard to the well-known incidents we had in the 1990s, well, let them be.

With regard to the Advanced Research Foundation, the issue is being addressed. The Military and Industrial Commission put forward the candidacies for Prime Minister Dmitry Medvedev's consideration. Afterwards, the President will receive proposals with regard to placing seven Government representatives on the foundation’s board of trustees. Accordingly, the President will put forward seven of his own representatives. That’s 14. The fifteenth member of the board will be a general director agreed upon by the Kremlin and the House of Government. We are looking for a high-profile energetic person who is well-versed on scientific matters, and has, as I've already said, a healthy dose of sensible risk-taking ability.

Question: Will we know the name before the end of 2012?

Dmitry Rogozin: I’m sure that we’ll know the name before the end of next week.

Question: Mr Rogozin, I have a car question for you. Is it true that you will start driving a Tigr soon? If so, when?

Dmitry Rogozin: A person in charge of defence in the government has to behave accordingly. I hope that this does not look ridiculous because, really, if we set the task of making a technology transfer and using dual-purpose technology for the Russian defence industry, we have to see for ourselves which military equipment can also be used by civilians. I researched the Tigr, which is assembled in the Nizhny Novgorod Region, from a military point of view. This is a good vehicle with sound localisation prospects, which we have just talked about... That is, the Rys... These two vehicles will give a boost to our technology. So, I want to see for myself if this will work for me in everyday life. Of course, it will be stripped of its military equipment, excessive armour, and so on. It will run on a Russian-made diesel engine. I want to see how it handles urban traffic. I hope that you’ll like it.

Question: Are any other ministers going to follow your lead? Like the Minister of Transport?

Question: Or Defence?

Dmitry Rogozin: No. One thing is clear, though. In the future – and I hope not in the so distant future – Russian officials will start driving vehicles that have been assembled in Russia, preferably Russian brands. I think that this has to be done. Take a look at France, for example, which has always manufactured compact vehicles, yet made a limousine for their president. This is the way to go. The government cannot afford to advertise foreign brands. We just don’t have the moral right to do so. So, I'll try it first, and if it works for me, then I’ll share my experience with my colleagues in the government. If these vehicles become truly popular on the civilian market – not those bulky war machines, but lighter options, such as SUVs and so on – then we can start their serial production. Personally, I would be very pleased to see that because the stability of the defence industry will be achieved not only through sustained defence orders, but also through the technology transfer. Thus, it may be necessary to use some power and to switch this production to civilian tracks. Sadly, I’ll have to pay out of pocket for this vehicle because the government does not allocate money for such purchases yet.

Question: Is it expensive?

Question: How much is it?

Dmitry Rogozin: About 20% cheaper than a European-made SUV. If we begin serial production, then it will be 35%-40% cheaper. I’m not sure about the exact price. It will depend on the trim. It’s not going to be anything fancy.

Question: When will we see it?

Dmitry Rogozin: I believe that the first one will be ready sometime in the spring.

Question: Moving back to Russia-China relations. Certain aggravations have taken place in the past six months. Do you think that they will affect the larger plans for the Russian-Chinese relationship? Was this topic discussed during the negotiations?

Dmitry Rogozin: Of course, whenever there’s a meeting on such a level, the Prime Minister discusses not only the material part of the cooperation, but political issues as well. The fact that the Chairman of the Chinese State Council went to Sochi today to meet with President Putin demonstrates that alongside our Chinese colleagues, we are discussing global issues and issues of cooperation between Russia and China at the UN Security Council and other international venues. I'm also going there to take part in this work. So, we have trust-based relationships with China, and we see eye-to-eye on many issues. That’s the way it should be because it’s very important for Russia to participate in groups, such as BRICS, where China is a major player, the Shanghai Cooperation Organisation, and other venues where we form long-term agreements with China. Thus, we are interested in China pursuing an independent policy. Russia will support this because we have always been interested in creating a multi-polar world where everyone is not only upholding his own interests, but also understands that everyone else's national interests should be taken into consideration to ensure global security and stability.