UPDATE 1-Russia to study U.S. hi-tech, turn ‘reset’ to trade

* Kremlin meets Silicon Valley on U.S. tour
* President Medvedev on modernisation drive

* Countries hope to use diplomatic ‘reset’ to boost trade

(Adds Medvedev remarks)
By Guy Faulconbridge

MOSCOW, June 22 (BestGrowthStock) – Russian President Dmitry
Medvedev travels to the United States on Tuesday for a visit
both countries hope will help translate sunnier political ties
into increased trade and concrete business cooperation.

Medvedev heads straight to California and will spend
Wednesday soaking up the atmosphere in Silicon Valley, part of
his drive to reduce Russia’s dependence on natural resources by
encouraging U.S.-style technology and innovation.

By visiting the cradle of California hi-tech, Medvedev will
follow in the footsteps of curious Soviet leaders and tsars who
have tried to drag Russia forward by inspecting and trying to
imitate the industrial wonders of the West.

President Barack Obama has engaged the Kremlin in a “reset”
of relations, which had deteriorated in recent years.

The new warmth between the Cold War rivals has already led
to nuclear arms cuts and cooperation over Iran and Afghanistan.
Now the aim is to leverage the improved diplomatic climate to
boost business and trade.

“The more positive political dialogue must without a doubt
be accompanied by and be nurtured by real processes in the
economic sphere,” Medvedev’s chief foreign policy adviser,
Sergei Prikhodko, told reporters on Monday.

The United States accounts for less than 4 percent of
Russia’s foreign trade, compared to about 50 percent for the
European Union, which depends on piped-in Russian natural gas.

The White House said Obama was pleased Medvedev would start
his trip in Silicon Valley, where he could “review the unique
set of factors that has fostered this important centre of
technological advancement and entrepreneurship.”

Wary at first of U.S. talk of a “reset”, Russian officials
have warmed to Obama’s concessions after rows which dominated
the presidency of George W. Bush. They are pleased Washington
scolds Russia less often on human rights and democracy.

The Kremlin urgently needs to diversify the economy after
the global crisis exposed Russia’s frailty. Gross domestic
product (GDP) plunged 7.9 percent last year.

Medvedev will hold talks with Obama in Washington on June 24
and officials in Moscow said the Kremlin chief is likely to push
for final U.S. approval of Russia’s 16-year-old marathon bid to
join the World Trade Organisation.

Russia, the largest economy outside the global trade body,
has often accused Washington of holding up its accession.


Moscow officials are keen to present the trip as a symbolic
gesture: Russia looking westwards to reform rather than inwards
or eastwards, to China.

Medvedev, who is expected to make the rounds of Twitter,
Cisco Systems and Apple Inc (Read more about Apple stock future.). while in California, wants to
nurture innovation at home by creating a high-tech hub outside
Moscow with tax breaks and special rules.

He said Russia could learn lessons about modernization from
the experience of Silicon Valley.

“This experience is not definitive, but it is quite
interesting,” Medvedev told his presidential Security Council on
Tuesday before departing, state-run RIA and Itar-Tass reported.

The visit is also expected to bring deals in more
traditional industries, including one to buy up to 65 planes
from Boeing.

A U.S. diplomat said the Boeing deal should show sceptics
that Obama’s Russia “reset” — seen by critics as overly
conciliatory — is creating jobs for Americans.

The leaders of the world’s two largest nuclear powers are
also likely to discuss “further steps” to cut their arsenals of
atomic weapons after the April signing of a successor to the
1991 Strategic Arms Reduction Treaty (START), Prikhodko said.

Russian leaders through the centuries have gone West to
inspect technologies they hoped would jolt their often corrupt
and backward elites out of technological isolation.

Tsar Peter the Great is credited with dragging Russia from
the backwaters to the mainstream of European civilisation after
a tour of Holland and England. When he got back to Russia he
ordered courtiers to cut off their beards to look more European.

In Soviet times, Nikita Khrushchev’s tumultuous tour of the
United States in 1959 included a visit to IBM. Khrushchev was
more impressed by IBM’s self-service cafeteria than the
computers and ordered officials to copy the design.

“Modernisation is the key word,” the last Soviet President
Mikhail Gorbachev told Reuters in an interview this month.

“If you remember, perestroika started when we understood how
far behind we had fallen. Russia is right now facing some very
serious challenges … above all about the level of technology.”

Investment Research

(Additional reporting by Denis Dyomkin, Melissa Akin and
Steve Gutterman; writing by Guy Faulconbridge; editing by Peter
Graff and Noah Barkin)

UPDATE 1-Russia to study U.S. hi-tech, turn ‘reset’ to trade