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Cover Stories Series 2012> Outlining the SCO's Future> Archive
UPDATED: June 4, 2012 NO. 23 JUNE 7, 2012
Hello, Again
Vladimir Putin makes his first state visit to China since his re-election
By Ding Ying

Energy cooperation

China and Russia are going to conduct a new round of negotiations on Russia transporting its natural gas through pipelines to China, which is an important part of the two countries' trade and economic ties.

According to the agreement the two sides signed in October 2009, Russia is going to transfer 70 billion cubic meters of natural gas to China via two pipelines every year for 30 years beginning in 2014. But the two sides have yet to agree on the price. Russia insists China buy the natural gas at $300 to $400 per 1,000 cubic meters, the price at which it sells natural gas to European countries. China believes the price should be $200 per 1,000 cubic meters, which is the price it pays for gas from nations in Central Asia and the Middle East.

Chinese and Russian experts said since the project could greatly benefit the two countries, they should deal with it more patiently. They also said China and Russia need to find new ways to boost their economic cooperation along with their changed domestic situations.

Guan said the prospect of energy cooperation will be "infinite." But currently, their consuming abilities are very different. Statistics show that Russia's per-capita GDP in 2011 was about $13,236, while China's was only $5,432, because of its huge population. "If the Russian natural gas price exceeds Chinese people's ability to pay, there will be no need to rush into an agreement," he stressed.

Lukin agreed that since the cooperation should be mutually beneficial, the natural gas price should be decided on a level that can satisfy both sides. Besides, even if an agreement cannot be reached, it will not influence the other areas of cooperation.

Sergey Luzyanin, Deputy Director of the Institute of Far Eastern Studies at the Russian Academy of Sciences, said China and Russia might be able to discover a new cooperative method of energy cooperation with the involvement of a third country, such as a Central Asian nation.

Challenges ahead

China and Russia have formed a stable and active relationship. Observers pointed out that the two countries need to pay more attention to their economic cooperation and strengthen cooperation on security issues that challenge regional and global stability.

Shi said since the two countries are both at a crucial moment of economic transformation, they need to develop a new cooperative method. In 2011, trade between the two countries reached $79.24 billion. China imported $40.34 billion from Russia, mainly energy and natural resource-related products, and exported $38.91 billion to Russia, mainly machinery as well as electronic and hi-tech products.

"An influential power like Russia will not be content to be only a raw material provider for a long time," Shi said. He said the two sides need to strengthen cooperation in technology to guarantee the healthy and stable development of economic relations. China is also at a crossroad of economic transformation, and such cooperation will benefit both sides on their modernization, he said. He suggested cooperation between information, transportation and even military enterprises should be encouraged.

Putin and Hu are also expected to discuss international security issues, including the Asia-Pacific region and Syria.

Western countries expelled Syrian diplomats in late May after a massacre of over 100 civilians in a Syrian village. Luzyanin said China and Russia's stances on the Syria issue are similar. In spite of other countries' positions, some of which might be inconsistent with facts, China and Russia should stick to UN agreements on Syria, said Luzyanin.

"If the Syria issue goes out of control, the consequences will be much worse than those in today's Iraq," he warned. He explained that given Syria's special position in the Middle East, the country's situation will influence the whole region and beyond.

Shi said China and Russia should conduct more cooperation in the Asia-Pacific region. The United States has announced a plan to deploy an anti-missile system in the Asia-Pacific region. "Such a plan can only make the regional situation more complicated. China and Russia certainly will not accept the plan," he said.

Email us at: dingying@bjreview.com

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