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Xi, Putin launch era of strategic cooperation

2013-04-01
Analysis by Martin Sieff
Xi, Putin meet: Chinese leader Xi Jinping, front left, joins Russian President Vladimir Putin as they enter the Grand Kremlin Palace hall in Moscow. [AFP]

Xi, Putin meet: Chinese leader Xi Jinping, front left, joins Russian President Vladimir Putin as they enter the Grand Kremlin Palace hall in Moscow. [AFP]

The meeting between Chinese President Xi Jinping and his Russian counterpart, Vladimir Putin, in Moscow signals a new era in closer Chinese-Russian cooperation in fields ranging from national security to energy.

The two leaders had a lot to talk about during their March 22 meeting. Russian Television [RT] reported they met in the Kremlin for seven hours.

The timing of the visit heralds a significant message. Moscow was the first capital Xi visited after becoming leader of the world’s most populous nation only a week before.

China’s New Tang Dynasty [NTD] television network said many observers saw Xi’s decision to visit Moscow rather than Washington right after taking power as “a purposeful slight [to the United States] … and the U.S. won’t be on the itinerary."

“The meeting between Xi and Russian leader Vladimir Putin is seen as an answer to the U.S.’s pivot to the Asia-Pacific region,” NTD said.

China’s visit highlights strategic partnership opportunities

Xi made sure his visit had a strategic and military dimension as well as a focus on diplomatic and energy opportunities. On March 23, he held talks with Russian Defense Minister Sergey Shoigu and became the first major “foreign dignitary to visit the center for the operational management of the Russia’s armed forces, where personnel continuously monitor the situation at sea, on the land, in the air and space,” RT said.

Russia Deputy Defense Minister Anatoly Antonov told the ITAR-Tass news agency that Xi agreed with Shoigu in their strategic discussions.

“It was a complete identity of views of the Chinese President and the Russian Defense Minister on issues of international security,” he said. “Common concerns of the two sides on the issues of missile defense were highlighted.”

Over the past decade, Russian-Chinese relations remained friendly and the two countries maintained their close security ties and annual wide-ranging joint military exercises in the Shanghai Cooperation Organization [SCO]. However, the Joint Military Commission between the two nations did not meet for several years as Russia refused to sell China the advanced air supremacy and ground forces weapon systems Beijing wanted to buy.

But in Moscow, Xi made clear those days had gone. He advocated a stronger strategic partnership on the world stage.

“China and Russia should strengthen strategic cooperation in the international arena, we must work together to uphold the principles of the United Nations Charter, as well as to ensure peace and stability in the world,” Xi told students and professors at the Moscow State Institute of International Relations, Russian Television reported on March 24.

Visit followed months of planning

Chinese and Russian negotiators had worked for months in advance to make sure that the visit was a substantive one, preparing the way for the sign-off on critical new energy, trade and political agreements.

Xi and Putin may be a study in contrasts; however, they also share major concerns.

At 59, Xi is only a year younger than Putin. But Xi became general secretary of the Chinese Communist Party for the first time and only became president of his country in mid-March.

Putin, on the other hand, is in his third term as the elected president. He became acting president Dec. 31, 1999, when Boris Yeltsin resigned, then was elected in 2000 and re-elected in 2004. Because of term limits barring three consecutive terms, Putin was ineligible to run for a third consecutive term. He served as prime minister from 2008 to 2012, when he was elected president for a six-year term. He has held effective power in Russia for 14 consecutive years. Putin is Russia’s longest serving leader since Leonid Brezhnev [1964-82] and the third-longest serving since the Bolshevik Revolution [after Brezhnev and Josef Stalin].

Energy issues top discussions

Both Putin and Xi are concerned with energy issues. Under Putin, Russia became the world’s largest combined exporter of oil and natural gas. China has an enormous hunger for both.

Until recently, energy cooperation between the two countries has lagged for a range of financial and technical reasons. But Xi and Putin both indicated that they are determined to expand the partnership and build new pipelines and related infrastructure to greatly expand Russian energy exports to the Middle Kingdom.

Russia’s biggest oil producer OAO Rosneft, which has close Kremlin ties, agreed to dramatically expand its annual oil sales to China in the range of 45 million to 50 million metric tons [49.6 million to 55.1 million tons]. The trade represents a growth of 300 percent from current levels.

Rosneft, which Bloomberg Businessweek described as “the world’s biggest traded oil producer by output,” will receive a development loan of $2 billion from the China Development Bank Corp. The loan will be secured by 25 years of oil supplies to China at the expanded levels, under the agreement signed on March 22 in Moscow. Rosneft also gave the China National Petroleum Corp. [CNPC] access to Russia’s oil reserves below the Arctic Ocean. The deal was signed by Rosneft CEO Igor Sechin and CNPC General Manager Zhou Jiping.

Rosneft will start by increasing its oil supplies to China by 800,000 metric tons [881,800 tons] this year, Bloomberg Businessweek quoted Sechin as saying.

Under the new agreement, Russia may export up to 31 million tons of oil a year, or more than 620,000 barrels per day through three routes, more than doubling current annual level of 15 million tons. Russia already has built an oil pipeline to China from its East Siberia-Pacific Ocean pipeline and can also ship it through Kazakhstan. Putin told Russia’s ITAR-Tass news agency that the two leaders agreed on the need to “shape a new, more just world order.”

Channel News Asia reported that during President Xi’s visit, Russian Deputy Prime Minister Dmitry Rogozin and his Chinese counterpart Wang Yang signed another far-ranging series of energy deals. They include a $2 billion [USD] agreement between the Russian energy company En+ Group and China’s largest coal company, the Shenhua Group to mine new coal resources in Russia’s Far East. China is opening a new coal-fueled power plant every week on average to try to keep up with its soaring national demand for electricity.

Putin said bilateral trade had more than doubled in five years and reached $87.5 billion last year.

However, Reuters news agency cautioned that the trade increase was still only 20 percent of the value of Russia’s trade with the European Union, and also far less than China’s trade with the United States.

Russia and China still have a long way to go before they can dream of creating a trading block comparable to either North American Free Trade Agreement [NAFTA] or the European Union. But the two countries’ growing strategic cooperation may have consequences on the world stage far sooner.

 

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