China To Invest In Russian Far East, Buy More Fuel

(MENAFN- Asia Times) China will buy more oil and gas from Russia in the coming decade and will help develop heavy industries in Russia's Far East region.

Those decisions came out on Monday after Chinese President Xi Jinping and Russian President Vladimir Putin held a four-hour meeting in Moscow. The two are expected to sign an agreement to boost Sino-Russia economic relations.

The fuel trade plays a major role in the maintenance of those ties. China's General Administration of customs announced on Monday that Russia has replaced Saudi Arabia to become China's largest crude oil supplier after its oil exports to China grew 24% year-on-year to 15.68 million tons in the first two months of 2023.

Chinese commentators emphasized, however, that the cooperation between the two countries will not be limited to oil and gas trade but will extend to other areas such as finance, agriculture, nuclear power, the digital economy, aerospace and North Pole exploration, as well as tourism and education.

In an article published by Russian media to coincide with the talks, Xi describes himself as willing to work with Putin to push forward the new vision of future comprehensive strategic cooperation between China and Russia.

He says the two countries will boost bilateral trade and investments, push forward China's Belt and Road Initiative with the Eurasian Economic Union and encourage the exchange of workers and tourists between Chinese and Russian cities.

In the article, Xi reiterates that China recently unveiled its 12-point document that proposes to resolve the Ukrainian crisis peacefully in accordance with the principles of the Charter of the United Nations.

The two leaders discussed the Ukrainian crisis during their face-to-face talk Monday, but it remains unclear whether Russia and Ukraine can compromise on China's peace plan.

Both Ukrainian President Volodymyr Zelenzky and United States Secretary of State Antony Blinken have said peace talks can be held only if Putin withdraws Russian troops from the occupied areas in eastern Ukraine. Putin so far has not signaled that he will do so

2023 could be a decisive year for the Ukraine war. Image: Twitter Russia's oil and gas

No matter what the outcome of the Ukraine war will be, it's a fact that China is now buying more oil and gas from Russia at lower prices.

During the first two months of this year, China imported 24% more crude oil from Russia but it actually paid 11.71% less from the same period of last year. The average price of Russian oil imported by China was US$73.62 per barrel in January-February.

The General Administration of Customs said on Monday that Saudi Arabia had been China's largest oil supplier between 2019 and 2022. Last year, China imported 87.49 million tons of crude oil from Saudi Arabia and 86.25 million tons from Russia. However, China's oil imports from the Middle Eastern country fell 4.7% to 13.92 million tons while the average import price grew about 4% in January-February from a year ago.

On March 15, Putin unveiled a Far East development plan that highlights the importance of exporting Russian gas to China.

Putin said the Far East development plan will become clear after a natural gas agreement between Russia and China is finalized. He said this plan will accelerate the metallurgical, machinery and pipeline industries in the Far East region and create a large number of jobs to boost the local economy.

A Chinese writer says Putin is referring to the Power of Siberia 2, a new pipeline that transports Russian gas to China via Mongolia. He says it's a difficult task for Russia to relocate its industrial hubs from its western region to the underdeveloped Far East region but Moscow seems to have no other choice now due to the West's sanctions.

Power of Siberia 2

Last year, China obtained 15.5 billion cubic meters of Russia's gas via the Power of Siberia route, which commenced operations in December 2019. Import volume via that route is expected to reach the maximum capacity of 38 billion cubic meters by 2025.

On January 31 this year, the Chinese and Russian governments signed an agreement to start construction of the Far Eastern route, which will transport 10 billion cubic meters of natural gas from Russia to China annually.

The first section of the Power of Siberia gas pipeline was completed in 2014. Photo: Wikipedia /

Last July, Mongolia's Prime Minister Oyun-Erdene Luvsannamsrai said the feasibility study of the“Power of Siberia 2” gas pipeline has been completed and that construction would begin in 2024. The pipeline, with an annual capacity of 50 billion cubic meters, is expected to go online in 2030.

Unexpectedly, China's Ministry of Natural Resources on February 14 published a new version of its world map – directing a return to using the Chinese names of eight cities and areas occupied by the Russian Empire in the late 19th and early 20th centuries.

Some commentators say if Russia should collapse one day and China sought to occupy the mineral-rich Far East region, China's substantial investments and population there could prove advantageous.

New Sino-Russian relations

Chinese researchers have been writing about a new era of bilateral relations between China and Russia.

Since 2013, Xi and Putin have met face-to-face or talked on the phone about 40 times and have deepened Sino-Russia bilateral relations, writes Li Yan, an assistant researcher at the China Institute of International Studies (CIIS), a think tank of the foreign ministry.

Li says that, over the years, China and Russia have maintained strong political cooperation, which will not be interfered with or coerced by any third party. He says the two nations have worked together in the United Nations, the Shanghai Cooperation Organization, the Conference on Interaction and Confidence Building Measures in Asia (CICA) and BRICS (Brazil, Russia, India, China, and South Africa) to safeguard“international fairness and justice.”

Li adds that the two countries have also boosted their bilateral trade with a strong focus on energy and they will extend their partnership to many other economic sectors. He says the Xi-Putin meeting is a milestone of Sino-Russia relations and will create stability and positive energy to the world's peace and development.

China has no intention either to form an“anti-West” alliance or to cut its ties with Russia, writes Zhao Long, a researcher at Shanghai Institutes for International Studies, which is guided by the Shanghai Federation of Social Science Associations.

Zhao says many western media outlets and politicians have criticized Beijing for saying last year that it would cooperate with Russia with“no limitation.”

“Theoretically, China has 'no limitation' when cooperating with all countries,” he writes.“At the same time, the cooperation between China and Russia will not exceed their own strategic positions and abilities, as well as their own reasonable demands and development needs.”

He says it is ridiculous that some countries accuse China of supplying Russia with weapons and put pressure on Beijing to cut ties with Moscow.

Xi started his three-day visit to Moscow on Monday and met Putin in the evening. In his greeting, Xi said he had maintained close contact with Putin over the past decade and was grateful for receiving congratulatory messages from the Russian leader when he renewed his term as General Secretary of the Chinese Communist Party's Central Committee last October and Chinese President earlier this month.

“Russia will hold presidential elections next year,” Xi told Putin.“As the economic development and revitalization of Russia has made great progress under your strong leadership, I firmly believe that the Russian people will continue to give you firm support.”

read: power of siberia 2 to divert europe-bound gas to china

read: china-russia economic ties tighten in the shadow of war

Follow Jeff Pao on Twitter at @jeffpao3


Asia Times

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