Russian Finance Minister, Aleksey Kudrin, has hosted in Moscow his Chinese counterpart for talks on cooperation in the financial sector.

Russia and China face similar financial challenges and risks, said the Russian minister. According to him, Russia's strong balance of payments is the result of high oil prices and huge capital inflows which has boosted the country's gold reserves by more than $US 100 BLN in the first half of this year.

Coupled with an over-supply of foreign investment, inflationary risks remain high, warned Mr Kudrin. He said that although the measures used by both governments have much in common, there are some key differences.

“Inflation in China is 1.5- 3%, while in Russia it is over 8%, it means China's government is so far managing the same tasks better. Nevertheless, we are using similar methods to estimate the risks and regulate the economy. We're economic neighbours and have much in common, which can be used for the benefit of both countries,” stated Mr Kudrin.