Perhaps predictably, Gazprom and the Chinese government failed to resolve the major question surrounding President Vladimir Putin’s visit to Beijing this week: the price China will pay for Russian gas deliveries.
Still, progress toward other significant deals indicate an awareness of the Russian government that it needs to diversify its economy from natural resources, while independently of the visit, a proposed agreement on gas facility construction points to other interactions between Chinese consumers and the Russian gas monopoly Gazprom.
The state visit was only one aspect to Putin’s trip, as in its wake came a gathering of the Shanghai Cooperation Organization, which saw officials from Tadzhikistan, Uzbekistan, Kazakhstan, Kyrgyzstan, and observer states joining Russian and Chinese leaders for discussions on counterterrorism, drug control and security in central Asia.
Writing in the Zhenmin Jibao newspaper on Tuesday in advance of the visit, Putin outlined his view of Russia’s relationship with China, RIA Novosti reported. He cited the “strategic character” of energy cooperation between the two countries as “changing the whole configuration of the global energy market.”
In the context of the World Gas Congress in Malaysia, however, the International Energy Agency released a report on Tuesday that raises questions over Russia’s dominance of the world gas market, pointing to exploitation of untapped shale gas reserves as possibly leading to the United States overtaking Russia by 2017, Reuters reported.
The same report indicates that China’s demand will have doubled between 2011 and 2017, which additionally complicates the relationship between it and Russia, especially if the United States begins to export gas, despite its own high demand.
“Russia has mixed feelings when it comes to commercial relations with China,” said Lilit Gevorgyan, an analyst at IHS Global Insight, Jane’s Information Group, in a note on Wednesday. “Aside from oil and gas, China is interested in other mineral and natural resources, but there is little in terms of technological transfers or cooperation between the two.”
Skolkovo agreement
Technological cooperation will be necessary, Putin wrote, in order for the countries to reach the goal of $200 billion in turnover by 2020, from 2011’s $83.5 billion. In a sign of progress in this area, Viktor Vekselberg, president of the Skolkovo Foundation, signed an agreement on Tuesday with Guo Hong, the director general of the Chinese high-tech center Zhongguancun, also known as Z-Park.
“This agreement marks a transition to full-scale collaboration in high technologies between Russia and China,” Vekselberg wrote in the English-language China Daily. “Our cooperation in the scientific sphere has a long history that dates back to Soviet times, which is why Russian partners are confident that both nations can benefit from our collaboration in the field of innovation.”
The agreement was a result of talks between Putin and Chinese President Hu Jintao, Kommersant reported, and Vekselberg said that Skolkovo will be participating at a high-tech exhibition in Harbin on June 14.
Apart from the high-tech agreement reached between Skolkovo and Z-Park, initial moves were made towards other non-energy deals. The Chinese firms Dalian Wanda and China Oceanwide Holdings signaled readiness to invest $3 billion in the North Caucasus through the company North Caucasus Resorts, RIA Novosti reported, and, fulfilling an agreement during Chinese Vice Premier Li Keqiang’s visit to Moscow in late April, the Russian Direct Investment Fund and the Chinese Investment Corporation initiated a $4 billion bilateral fund on Tuesday.
Regional security
Putin’s foreign policy aide, Yury Ushakov, said on Tuesday that the geopolitical focus of the meetings would be on ensuring Chinese and Russian coordination within international bodies such as the UN and the G20, RIA Novosti reported.
In his preview of the visit, Putin proposed a direction for discussions that would take place not only with Chinese officials, but in the meetings of the SCO that concluded on Thursday, writing that “we consider counterproductive any attempts of third countries to undertake any unilateral actions in the region of responsibility of the SCO,” RIA Novosti reported.
Significantly, Afghan President Hamid Karzai attended the organization’s meeting in Beijing, which resulted in Afghanistan being granted observer status ahead of the withdrawal of foreign troops from the country in 2014, putting it in the same group as India, Iran, Mongolia and Pakistan. Other agreements made at the meeting’s conclusion were intentions to expand the member states’ military, security and counternarcotics cooperation into Internet security and strategies for mutual economic development, RIA Novosti reported.
Source: themoscownews.com