Moscow Considering China as Economical Choice Against West

Russian President Vladimir Putin visit to China, apart from bilateral political and economic content, has a high international symbolic, given the deterioration in relations between Moscow and the West motivated by deep disagreements over Ukraine. The policy of Brussels, after the crisis in Ukraine, to reduce energy dependence on Russia has made this country rush to redirect their exports to East oil.

Russia moves “consistently towards the formation of a strategic energy partnership” with China, as Putin said in an interview to the media. The diversification of energy exports, espoused by Putin, requires large investments and long term, as the transport infrastructure pipelines Russia is centered in the West.

As a country, China is the largest trading partner of Russia, though bilateral trade is far below the Russian trade with the whole of the EU. The Russian – Chinese trade volume was around 90,000 million in 2013 and Moscow plans to increase it to 100,000 million in 2015. Besides Russia aspires to be “strong technological and industrial partnerships” with Beijing, as Putin said. While in China, signed 40 documents on economic cooperation, including an agreement to supply Russian gas is planned, according to Minister of Economic Development, Alexei Uliukáyev in Tsindao, in East China. He was referring to a contract to supply 38,000 million cubic meters of gas to China for 30 years, a document that takes years negotiated by lack of agreement on price. According to Gazprom sources cited by the newspaper Izvestia, no agreement on a price of $ 250-380 per thousand cubic meters, equivalent to the European average price. Izvestia warned, however, that the head of Gazprom, Alexei Miller had yet to finish closing the figure on Monday with his colleagues in the National Petroleum Company (CNPC).

Russia is interested in cheap Chinese loans for the construction of transport infrastructure and exploitation of new deposits. According to the head of the Bank for Foreign Economic Affairs (VEB) Vladimir Dmitriev is planned to sign an agreement to build a major terminal for liquefied gas in the Yamal Peninsula. In addition to Miller, accompanying Putin Igor Sechin, Rosneft president of the oil company. This state company wants CNPC and Sinopec to participate in the exploitation of deposits in Russia, both on land and on the coast, and also participates in the construction of refineries. Putin said that Russia makes a draft oil supplies to China through the pipeline Skovorodino – I dipped worth more than 60,000 million dollars and also mentioned plans in the field of civil aviation, which has agreed to build jointly wide-body aircraft and where there are plans to make a helicopter.

China and Russia should “strengthen financial cooperation and protect oscillations rates of major world currencies,” said Putin, who invited China to take a leading position in the development of Siberia and the Far East, and installed in economic zones with special tax advantages that are created in regions under a law that is currently being developed.

The great turning point towards the East is more a show than a reality. “Russia can find financial resources in China, but not the high-tech needs,” said Vladimir Ryzhkov, a former vice chairman of the State Duma (lower house of parliament) of Russia and China connoisseur. “If the West increases sanctions against Russia, Moscow may have trouble producing war materials currently exported and in which Western technology is used, which China does not have.” For reasons like this, Moscow can not give up its relations with the West.” There is a process of mirroring, but only to a point. Europe is free from dependence on oil, but can not fully and Russia is free from technological dependence of Europe, but neither can fully because interdependence is one of the characteristics of this global world, “says the expert.

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Posted by Shakira Subhani on May 21 2014. Filed under Opinion. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.