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Russia » Economics

Russian bear and Chinese dragon shake paws

24.04.2014
 
Russian bear and Chinese dragon shake paws. 52647.jpeg
AP photo

The Russian-Chinese cooperation has been gaining momentum in light of Western sanctions against Russia. China supported Russia, when Western countries launched an anti-Russian campaign. Now, the U.S. may come across a powerful competitor in the face of a union between such large countries as China and Russia.

A couple of days ago, citing a source in diplomatic circles, Russian mass media reported that U.S. authorities failed to persuade the Chinese leadership to impose sanctions against Russia, even though US officials did their best to try. The attempts of the Obama administration to convince the Chinese leadership of the need to put pressure on Russia failed to succeed, although the talks reportedly started in the beginning of March. Meanwhile, the talks on gas supplies between Russia and China came to the final stage.

The only question that remains unsolved is the basic price for gas. For China, switching to natural gas is a highly serious problem, as the use of coal took the country to an environmental catastrophe. The whole world remembers the photos and footage of Beijing shrouded in suffocating smog. For Russia, searching for new markets is also a very important issue, especially in light of recent events and the strong determination of the EU to minimize energy dependence on Russia.

The gas contract is to be signed in May, when Russian President Vladimir Putin comes to visit Beijing. Experts do not rule out a possibility that Gazprom would agree to grant gas production access for Chinese companies, at least symbolically. Actually, the Chinese are much more interested in this aspect than in the price issue. For the time being, though, economists can only speculate on the outcome of the negotiations between Russia and China.

"Russia is a major supplier of energy resources and hydrocarbons to China, so for China, cooperation with Russia is essential. On the one hand, China needs to expand oil and gas shipments. On the other hand, China seeks cheaper prices for the Russian products, - Professor and Chairman of the Department for Oriental Studied of the Higher School for Economics, Alexei Maslov said. - in this case, China will now obtain a trump card, given gas problems in the western direction. China's another interest is about developing even closer strategic cooperation with Russia in the defense industry. China needs to significantly enhance its armed forces. It is no coincidence that soon after the West introduced sanctions against Russia, China proposed to buy a large batch of Russian Superjet aircraft, although there was no official confirmation to that. In general, however, China is obviously interested in expanding the technological cooperation with Russia."

Russia, however, is interested in attracting investment to the Far East, where it is planned to develop industrial parks. Should Chinese investors pay attention to the Far East region of Russia, it will be possible to solve the employment problem in this remote region. As Alexei Maslov said, industrial parks do not require a large number of people, but they do need well-educated population and good organization of such special economic zones.

"We in the Far East need investment, of course, the Chinese could do it, but they spend their money very carefully. They need to know exactly what they will get from this, - Ph.D., Chief Scientific Officer at the Institute of Far Eastern Studies, Ludmila Boni said. - Of course, they would like to use their work force, and we do not have a lot of that workforce there. If we had good laws that would regulate all this normally, it would be very good to use the investment and workforce to develop our economic potential in the Far East. However, it does not work yet on our end."

As for the cooperation in the field of defense, it is unlikely that the Russian military-industrial complex needs that. Russia's prime goal here is to show itself as a country capable of acting on both western and eastern directions.

"If Russia is completely cut off from all imports, new equipment and so on, we will be able to take something in China, and they will be happy to give it to us. They already have it all. With regard to agriculture, China is interested in that too - the Chinese do not have enough arable land. Therefore, China is interested in expanding its economic potential by leasing and developing the land of adjacent states. I know that in the Far East they rent large plots of arable land. They already rent more than 420 thousand hectares from Russia. This is what they are interested in," Ludmila Boni said.

Thus, one can see that the potential for cooperation between the two countries is quite broad. Once the two countries come to an agreement on the gas issue, they will give it all a start.

Maria Snytkova

Pravda.Ru

Read the original in Russian


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