Warmer ties for Russia, China with big gas deals

Russian Prime Minister Vladimir Putin on Wednesday wrapped up a three-day visit to the Chinese capital, during which Russia signed dozens of commercial pacts worth US$3.5 billion and set the framework for a separate, multibillion-dollar agreement to build two natural gas pipelines to China from gas fields in Russia's Far East.

Together, those pipelines would be capable of supplying China with 68 billion cubic meters (2.4 trillion cubic feet) of natural gas annually, representing a whopping 85 percent of the gas China currently consumes.

Once the energy partners agree on a final price and the pipelines are built, China could become Russia's single biggest customer for natural gas.

The agreement highlights the determination of both nations to diversify their economies and seek new customers and vendors. It also reflects a political desire by both to steer a course independent of Western powers and especially the United States.

But many experts say the deal doesn't necessarily signal that China and Russia are preparing to forge a major new strategic alliance.

“I don't buy this idea that China is Russia's future,” said Chris Weafer, chief analyst at the Moscow-based Uralsib bank. “The key relationship always has been and will be Europe.”

Lilit Gevorgyan, an analyst for London-based IHS Global Insight, said the Sino-Russian relationship, though closer in recent years, remains primarily based on economic needs.

“Of course the size of the deal will increase the importance of the relationship, but I wouldn't say that it's deliberately designed to shift the attention of Russia's foreign strategic goals from West to East,” she said.

“Russia is reeling from the recession's impact. It's cash-strapped. Siberia has a very scarce population and lots of natural resources -- something that's reversed in China. So it's only a logical marriage of two economic powers,” she said.

Russia and China have a long history of mutual suspicion and tensions, and 50 years ago they split bitterly over interpretations of Communist ideology. In recent years, their relationship has warmed but they remain divided by geography, culture and a preference in both capitals for acting independently.

China has historically looked inward, although that is changing, while Russia has turned to Europe, with which it shares long-standing economic and cultural ties.

Still, Russia is the world's biggest energy producer and neighboring China is the world's second-largest energy consumer after the United States. Both see themselves as rivals to Washington and all three are permanent members of the U.N. Security Council. Political forces are clearly driving Beijing and Moscow closer.

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