Photos from the meeting between Vladimir Putin and Wen Jiabao made this week during the visit of Russia’s Prime Minister to China, reminded the China-Soviet alliance at the dawn of the Cold War, writes Austin Ramzy. However, the signed agreements on the export of Russia’s natural gas showed that it is now most strongly binds the two countries economies.
Each party will extract their profits from energy transactions. Russia’s energy companies will be fastened in China, which in the next five years will become the largest energy consumer in the world, and Beijing will get a reliable and familiar source of resources.
China using its international reserves, now in a recession when prices for oil and gas fell actively acquires materials. So, in August, he signed a contract for $ 41 billion with Australia for the supply of liquefied natural gas for over 20 years. Last month, China’s oil state company CNOOC entered into negotiations with Nigeria on the acquisition of one-sixth of the oil reserves of that African country. This week, from Guinea, it was reported that the ruling junta has struck a deal to develop mineral resources in the amount of $ 7 billion with an unnamed Chinese company.
However, despite the support of the governments of Russia and China, the parties have yet specify exactly how Gazprom will sell natural gas China’s CNPC. In particular, there is still no clarity as to be financed the construction of expensive transmission infrastructure. If the issue can be resolved, then in 2014 Russia will supply to China some 70 billion cubic meters a year. This is equivalent to 90% of the consumption of China in 2008, but it is expected that the demand of the country for energy will grow rapidly over the next two decades. Now in China 70% of electricity produced from low-grade coal, and only 3% – from the cleaner natural gas.
As the author concludes, now China is considering all possible options for the acquisition of oil and gas. Seeing the rapid growth in commodity prices in the past year, Beijing is now trying to sign as many deals as prices are stable. As for the old alliance, Time wrote that former allies in the Cold War might not have lost the desire to counter U.S. influence, but now Moscow and Beijing over economic considerations associated XXI century.