China-Russia Economic & Infrastructure Pact

China-Russia Economic & Infrastructure Pact

Since the mid-2000s, speculation loomed that a tri-lateral group (United States, China, and Russia) would be created. Its suspected goal was to establish a worldwide economic network to compete with the EU (European Union) and other financial markets.

The suspense ended in November 2016 when Donald J. Trump was elected President of the United States of America. Mr. Trump ran his campaign on promises, one of which was to redo the country’s trade practices, with fair trade the goal.

The cards were on the table. President Xi of China was now dealing with an unfamiliar opponent in the U.S.

Although the news that the U.S. president had announced new trade agreements will be renegotiated, President Xi of China continued the Chinese plans to be the Global Economic Power, having strategic agreements with countries along or part of the New Silk Road already in place.

In 2014, Russia agreed to supply China with hundreds of billions of dollars worth of natural gas via a joint venture pipeline to be built. The Siberian pipeline was to begin pumping in four years.

Having deadlines missed and several pipeline leaks, Russia is not unaware of the risk going into more agreements with China. Yet Russia needs a cheaper and reliable pipeline to China and beyond.

China, Russia launch gas pipeline

Written by: Li Yan, editor for China Daily published 2019-12-03 on  reports the following —

Xi, Putin witness opening of massive energy project, hailing significance of cooperation

President Xi Jinping and his Russian counterpart Vladimir Putin witnessed via video link on Monday the opening ceremony of the China-Russia east-route natural gas pipeline, a landmark project that will transport natural gas from eastern Siberia through Northeast China to Shanghai.

The two presidents, Xi in Beijing and Putin in Sochi, Russia, greeted each other, and Xi expressed gratitude toward the workers building the pipeline.

Hailing it as a flagship project for China-Russia energy cooperation, Xi called the pipeline a model for China-Russia integrated communication and win-win cooperation.

Xi mentioned that he and Putin witnessed the signing of the document on the pipeline project in 2014. The construction workers overcame difficulties in freezing weather in the past five years to complete the project, which shows the fine technologies of workers in major countries and the fruitful outcomes of China-Russia cooperation, Xi said

The project’s completion is not only an outcome but also a new starting point for cooperation, Xi said, adding that the two nations should work together to build a safe, green, developing and friendly pipeline, make all efforts to ensure its safe construction and operation and promote the sustainable economic and social development of regions along the route.

Noting that this year marks the 70th anniversary of China-Russia diplomatic relations, Xi said the two countries should make further efforts to build more projects like the pipeline to bring more benefits to the people of both sides.

Putin said that the opening of the pipeline has great significance at a time when the two countries are celebrating the 70th anniversary of diplomatic relations.

In the next 30 years, Russia will supply 1 trillion cubic meters of natural gas to China, which will be helpful in implementing the two presidents’ consensus of advancing Russia-China trade volume to $200 billion in 2024, Putin said.

Russia would like to make joint efforts with China to ensure the smooth implementation of the flagship project, he added.

Under a 30-year agreement between Russian company Gazprom and China National Petroleum Corp signed in May 2014, the China-Russia east-route pipeline project is expected to pump some 38 billion cubic meters of natural gas from Russia to China annually.

That is equal to about 13.6 percent of China’s gas consumption in 2018 of 280.3 billion cubic meters, according to the National Development and Reform Commission.

The pipeline stretches 5,111 kilometers in China and 3,000 km in Russia. Its Chinese section covers six provinces, one autonomous region and two municipalities from Heilongjiang province to Shanghai.

Yana Leksyutina, a professor at the Russian Academy of Sciences, said China has been the largest trade partner for Russia since 2010, and Sino-Russian trade and economic ties have maintained good momentum.

Their cooperation is mainly focused on energy, Leksyutina said, saying some Russian energy megaprojects are being implemented, or are to be launched with Chinese investments, including the Yamal LNG and Arctic LNG 2 liquefied natural gas projects.

She said the first-ever Russian-Chinese gas pipeline has tremendous meaning for both countries, as the volume of Russian energy exports to China is expected to grow rapidly. Russia has high hopes for extending cooperation to other fields, such as agriculture, Arctic development, cross-border e-commerce, and currency settlements.

(Highlights and links added by this writer)

The report above gives insight into the greater Russia – China project.

Oil and Natural Gas are far from the extent of the Chinese plans for this project. Another benefit of the pipeline is that it connects China to its Polar Silk Road and the trans-continental pipeline project across Russia.

In 2017 the top export destination of Russian oil and natural gas was China with $39.1B. Gas exports from Russia to China are projected to increase to 280.3 billion cubic meters by 2018.

Russia, to ensure the furtherance of its own trade policy, created the Eurasian Economic Union (EAEU).

Eurasian Economic Union

In August 2015, the Eurasian Economic Union consisted of the nations of Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia.

Israel is set to sign a free-trade agreement with the Russia-led EAEU in the near future, according to officials in Moscow and Jerusalem.

Iran is also in advanced talks about creating a free trade zone with the EAEU. However, each country would sign its own free-trade agreement (FTA) with the union, which would mean that Jerusalem would not be able to trade freely with Tehran, or other states signing similar agreements.

The caveat of the agreements of trade between Iran and Israel with the Russia-led EAEU, assures that those trade agreements would be set for a later date. However, Iran and Israel would be more beneficial to China as destinations on the One Belt One Road (OBOR) trade route.

The agreements among this group also represent a military force that could have devastating consequences.

On December 27, 2019, to bolster its power China, Russia, and Iran started naval war-games in the Gulf of Oman.

This revelation has world powers monitoring the war-games closely.

The U.S. Navy patrols the same area the war-games are being held causing a heightening of tensions in the area.

The Gulf of Oman is one of the largest sea routes to the oil-rich countries in the region with 30% of the global oil supply passing through the gulf.

The Strait of Hormuz is a strait in a narrow sea-lane between the Persian Gulf and the Gulf of Oman. Any interruption of oil tankers using this sea-route could slow or stop oil deliveries worldwide.

Although China and Iran have had joint naval exercises in the past, this is the first time that Russia joined the group for these naval exercises to show the world the three countries can ally if needed in future actions in the region.

Naval war-games in the Gulf of Oman is not just a show of force in the region. They also establish that the Chinese New Maritime Silk Road will extend to countries bordering the Persian Gulf.

At this point, China, Russia, and Iran have shown the cohesiveness of the trio as a military force worth watching in the future.

With China now encompassing the world, what role does Israel play in the latest agreement of the four countries?

Israel is surrounded by countries that are anti-Semitic and with Iran’s proclamation that Israel should be wiped off the Earth, it appears that this foursome could be built on shaky ground.

However, Israel does have advanced weapons and technology that China is interested in obtaining.

A majority of advanced weaponry and technology in Israel have come from the United States, Israel’s best trading partner and ally.

Regardless of the U.S. – Israel Alliance, China has been very interested in Israel not only for the OBOR but as a source to obtain U.S. weapons and technology.

One such sale was reported in 1993 by the Independent

Israel Accused of Selling U.S. Secrets to China

ISRAEL has sold at least dollars 2bn ( pounds 1.3bn) to dollars 3bn of hi-tech military equipment to China, seriously undermining US efforts to limit the sale of advanced weapons to the Chinese. A Senate report due out later this week says the Israeli exports include military technology developed by the US, and which Washington expressly forbids from being exported to China.

Officials accompanying Israel’s Prime Minister, Yitzhak Rabin, on a visit to China confirmed that Israel had done deals but would not elaborate. The CIA told the committee the Chinese were seeking from Israel technologies that Western firms were unwilling to provide.

Those sold by Israel are said by specialists to include technology for the Python – the Israeli version of the US Sparrow air-to-air missile – and technology developed for the US-financed Lavi jet, which the Israelis cancelled some years ago.

The US is also concerned that Israel may have passed on technology for the Arrow anti-missile missile, a joint US-Israel project, which is based on the Patriot missile used in the Gulf war.

The Israeli Defense Ministry director-general, David Ivri, accompanying Mr. Rabin in China, said in response to the Senate report: ‘There are security relations (between Israel and China) but I cannot relate either to numbers or the substance of deals themselves.’ Morton Miller, a former state department analyst, said the real figure for sale of Israeli arms to China was between dollars 8bn and dollars 10bn.

James Woolsey, the director of the CIA, told the Senate Committee on Governmental Affairs: ‘Peking probably hopes to tap Israeli expertise for co-operative development of military technologies – such as advanced tank power plants and airborne radar systems – that the Chinese would have difficulty in producing on their own.’ He said the Chinese wanted to interest the Israelis in using Chinese facilities for launching satellites.

China and Israel have had formal ties only since January 1992 but secret military deals go back much further. They include the upgrading of the Chinese tank force and avionics. Chinese Eastwind ballistic missiles sold to Saudi Arabia against Israeli objections were improved by Israeli technicians.

The CIA says Israeli defense firms are opening offices in Peking and other Chinese cities to promote their products.

This agreement is only one of many secret deals Israel has made with China over the years while the U.S. still sends billions of dollars to Israel in financial aid and billions for defense systems.

One item worth mentioning is the following:

Why would this post be of importance?

~ More reports on China’s quest as they arise.


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