06/22/2016, 15.50
RUSSIA – CHINA
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Vladimir Putin in Beijing to discuss energy, transport and trade

by Nina Achmatova

Russia’s president will meet his Chinese counterpart next Saturday. Although the meeting’s agenda has not yet been made public, some 30 deals are expected to be signed. China would like to share in Rosneft’s privatisation.

Moscow (AsiaNews) – Russian President Vladimir Putin is set to visit China starting next Saturday, at the invitation of his Chinese counterpart, President Xi Jinping, the Kremlin announced. However, few details about the visit have been made public.

The two have enjoyed a close relationship since Chinese President Xi Jinping chose Russia for his first foreign visit after he became president in 2013.

Since then, the two leaders have met on a regular basis. For Russia, China has also become important to offset Western sanctions.

The Foreign Ministries of the two countries said that the two leaders will discuss bilateral economic cooperation and trade in multilateral organisations, such as the Shanghai Cooperation Organization (SCO), BRICS (Brazil, Russia, India, China and South Africa), the United Nations and the G20, the latter is set for early September in Hangzhou, eastern China.

The two countries are expected to sign some 30 deals, said Russian Ambassador to China Andrey Denisov, cited in Tass.

The ambassador added that Moscow’s approach is the same as with its Western partners: trade between Russia and China is more than just trade, but involves an exchange of investment projects.

“Investment projects anticipate financial relations, interbank cooperation, technical collaboration and cooperation in sales of ready products, particularly on third country markets," Denisov said.

China’s export to Russia grew 4.4 per cent year-on-year in the first four months of 2016 to US$ 9.8 billion. Import of Russian goods in China declined 2.8 per cent year-on-year to US$ 10 billion, Tass said.

Eyes are on a deal on the high speed train on the Moscow-Kazan line, especially as the China Railway Group announced a US$ 2.4 billion investment in the project.

Two Chinese banks, Export-Import Bank of China and China Development Bank, also have plans to invest US$ 12 billion Novatek’s Yamal gas fields.

Energy will top Putin’s visit. Already the two neighbours plan to build two pipelines, the Altai gas and the 'Power of Siberia' pipelines.

The sale of 19.5 per cent of the Russian state oil company Rosneft will also be discussed.

CNPC expressed an interest in increasing its stake in the company if it can get a seat on the board of directors. Russia is not too keen on this and is looking for other partners, including India and Italy.

The Kremlin is considering to sell to a joint venture between the Chinese and Indians, Bloomberg reported.

A partial privatisation could mean 700 billion rubles (US$ 11 billion) in fresh capital, a record in a country starved of money following the prolonged drop in oil prices.

But energy is not everything. Moscow also has weapons to sell. “Since Western sanctions and a drop in oil prices of 2014, arms sales are increasingly important for the Russian budget,” Agnia Grigas, Senior Fellow at the Atlantic Council says. “Following on the arms deals between the two countries of 2015, it is likely that more will follow during this visit.”

Putin and Xi are also bound to discuss international political issues. Both Moscow and Beijing are aligned on China’s agenda in the South China Sea and the Terminal High Altitude Area Defence (THAAD), an advanced US missile system to be deployed in South Korea to contain the North Korean threat.

For Putin, the visit also provides an opportunity to show the solidity of the alliance with Beijing and that China can be a valuable counterweight to the West.

Still, “Anyone who watches China does not believe a Sino-Russia alliance deal is on the cards. There is simply too much mistrust there and they have different interests internationally. The US sees that,” Grigas said.

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