Weakened Russia Yields To China's Energy, Railway Desires
Date
12/31/2024 12:05:13 AM
(MENAFN- Asia Times)
Russia has made two major compromises with China by giving Beijing the green light to build a railway in nearby Central Asia and accepting China's suggestion of re-routing the Power of Siberia 2 gas pipeline to pass through Kazakhstan instead of Mongolia.
In the past few months, falling global energy prices have dented Russia's export earnings. In December, oil prices fell to about US$70 per barrel, down 18% from this year's peak of US$87 in April, due to lower demand in China and OPEC's expectations to increase production.
Those lower prices come against the backdrop of G7 members, the European Union and Australia's price cap of $60 per barrel on seaborne Russian oil, which have resulted in lower foreign currency inflows in Russia and thus a fall of the Russian currency, the ruble.
The ruble has declined by 17% to 108 per US dollar in 2024. The current valuation is down 34% since the beginning of the Ukraine war.
On December 27, Zheng Shanjie, Chinese President Xi Jinping's Special Envoy and director of the National Development and Reform Commission, attended the launch ceremony of the China-Kyrgyzstan-Uzbekistan (CKU) railway project in Jalalabad, Kyrgyzstan.
The ceremony was attended by Kyrgyz President Sadyr Japarov while Xi and Uzbek President Shavkat Mirziyoyev sent congratulatory letters.
China's Communist Party-run Global Times said the commencement of the long-anticipated connectivity project, which has been under planning for more than 20 years, will mark a new milestone in China-Central Asia cooperation. It said that once completed, the project could open a new Eurasian corridor connecting China, Central Asia and even Europe.
The project is scheduled to officially commence construction in July 2025, with a construction period of six years, according to China Railway.
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