News / Asia

    Long-Term Impact of China-Russia Gas Deal Uncertain

    Russia's President Vladimir Putin and China's President Xi Jinping, right, smile during signing ceremony in Shanghai, China, on May 21, 2014.
    Russia's President Vladimir Putin and China's President Xi Jinping, right, smile during signing ceremony in Shanghai, China, on May 21, 2014.
    China and Russia have wrapped up decade-long talks over a natural gas pipeline that will link up resources in Siberia to key coastal Chinese cities. Some analysts say the deal is an important milestone that will open the door to broader cooperation, but the long-term impact is still far from certain.
     
    The expansion of energy ties between China and Russia in recent years and the signing of a 30-year agreement for natural-gas supplies go beyond just the pipeline and helping the Chinese economy, says Lin Boqiang, an energy economist at Xiamen University in Fujian province.
     
    Lin said it is a "milestone for such a massive deal to be wrapped up by the leaders of both countries." He said being able to do that, after years of negotiations,  "significantly raises hopes for the further development of Sino-Russian relations."
     
    Construction, energy deals

    In meetings this week, the leaders of China and Russia signed an extensive joint strategic agreement that touches on more than just oil and gas. The two agreed to explore the joint construction of power plants in Russia to help China meet its energy needs.
     
    They agreed to construct cross-border bridges and improve trade linkages through ports and railways. They are also looking to boost cooperation in a wide range of fields, from nuclear energy to civil aviation and manned space flight.
     
    Still, trade ties between Russia and China are small when compared to Beijing's links with Europe or the United States. Moscow hopes to grow trade to $200 billion a year by 2020, a total that is still less than half of China's current trade volumes with the U.S. or European Union.
     
    Beyond trade

    But boosting ties goes beyond just trade, according to Zhang Lihua, a professor of international relations at Beijing's Tsinghua University.

    She said China could use Russia's support in dealing with Japan and with territorial disputes in the South China Sea.
     
    "Russia, on the other hand, needs China's support with Syria, Ukraine and other issues in the Middle East," Zhang said. The two countries have "shared interests in dealing with regional disputes and in balancing the influence of the United States."
     
    However, relations between Russia and China have not always been smooth and twists and turns in energy deals are not uncommon. Russia is also facing the threat of growing sanctions from the West.
     
    Lin said the threat of sanctions "could have a small impact, but nothing beyond that." That's because "China has a different view" when it comes to sanctions, he noted.
     
    Other gas options

    Russia is not the only country looking to meet China's growing demand for natural gas.
     
    Erica Downs, with the Brookings Institution in Washington D.C., focuses on China's energy sector. She said China doesn't absolutely need the pipeline to meet its energy needs.
     
    "There is a lot of gas out there in the world. There are a lot of gas projects that could be developed and I think the view in China is that there are a lot of countries out there that really want to supply us," she explained.
     
    In addition to gas exports opening up from the United States in 2015 and Canada considering similar moves, there are new sources in Burma and off the east coast of Africa -- and China has its own domestic exploration of shale gas. Analysts say that while China's shale gas resources are not likely to come online until around 2020, they could have an impact on the Russia-China deal.

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    Comment Sorting
    Comments
         
    by: Schneider from: B.R.Deutschland
    May 22, 2014 6:54 PM
    It is too mysterious to understand that the Sino-Russo gas deal has been wrapped up. China is a country that never respects international laws, and Russia is a country that readily breaches international laws.
    In Response

    by: Oum from: International Community
    May 23, 2014 1:51 PM
    In the same way the West refers to the "international community" as themselves.
    In Response

    by: MOD from: CHINA
    May 23, 2014 7:50 AM
    Inernational law is US law

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