Russia is now much closer to China than the U.S., the head of Russia's sovereign wealth fund told CNBC Tuesday, with a strategic partnership between Russian firms and Alibaba the latest example of their strengthening ties.

"Frankly we do much more with China generally, we believe in integration, we believe in working together, President Xi (Jinping) and President (Vladimir) Putin are positive about this transaction," Kirill Dmitriev, the chief executive of the Russian Direct Investment Fund (RDIF), said at the Eastern Economic Forum in Vladivostok, Russia.

"So yes, of course Russia and China are much closer now than Russia and the U.S." He put the schism with the U.S. down to "geopolitical difficulties" and said, "we believe we need to overcome this and do more great joint projects together, even with the U.S."

Dmitriev's comments come hours after a strategic partnership between Russia's sovereign wealth fund and Chinese e-commerce giant Alibaba was announced. The deal will allow both sides to make the most of each others' customers and products, Dmitriev said.

"Alibaba is $410 billion company and it's a great partner for us because it's the first time in the world that we have a merger between e-commerce, social network and telecom operator, all taking e-commerce forward. But not only this, artificial intelligence, logistic infrastructure (too)," he said, speaking to CNBC's Geoff Cutmore.