China and Russia are doubling down when it comes to collaborating on strategic investments.
The Russian Direct Investment Fund and China Development Bank on July 4 signed a memorandum of understanding backing a 68 billion renminbi ($10 billion) China-Russia RMB Investment Cooperation Fund.
A news release on the joint fund said it will invest in key strategic initiatives being pursued by both countries: China's One Belt-One Road initiative, aimed at forging a more perfect economic union among China, Central Asia, Russia and Europe; and the Eurasian Economic Union initiative being pursued by Russia and a handful of its neighbors.
The RDIF said in the news release that it will use a previously established cooperative investment vehicle — the Russia-China Investment Fund it launched in June 2012 with China Investment Corp. — to make investments for the new fund.
A spokesman for the Russian Direct Investment Fund said with the new fund denominated in renminbi, Chinese investors will have greater opportunities to invest in promising sectors of the Russian economy.
"It will also provide opportunities for Chinese partners to work with the China Development Bank and RCIF and take advantage of the infrastructure that has already been set up by RCIF to implement and manage Russian-Chinese investments."
The announcement provided no details on the respective contributions each side will make toward the $10 billion total. "We will be finalizing further details of the joint fund management structure shortly," the spokesman said.