For Russia, the main result of its President's visit to Shanghai is clear: it’s the real beginning of Russia's turn to the East, an issue that has been much debated before. The Russian-Chinese gas deal opens up possibilities for further large-scale bilateral cooperation to develop Eastern Siberia and the Russian Far East.
Vladimir Putin's visit to Shanghai is already being described as historic, and with good reason: the Joint Statement adopted as a result of the visit says Russia and China have reached a new phase of comprehensive partnership and strategic cooperation. I attribute this to the fact that an intensive and confidential Russian-Chinese political dialogue was reinforced by a substantive package of 46 agreements on trade, economic, investment, scientific and technical cooperation, and above all, the long-awaited gas deal.
The Russian President praised the deal as a landmark event even by the standards of the Soviet Union and post-Soviet Russia, and not for nothing. Difficult 10-year-long talks on gas supplies to China have become a genuine test for bilateral relations. It was a test for the sincerity and the maturity of the relations between Russia and China, since the political leadership on both sides has on many occasions been strongly tempted to make a political decision, achieve a desired result and score political points at the expense of economic expediency.
However, the parties have successfully walked away from such temptations: what would they say about such a deal later, both in Russia and China, or elsewhere? How many speculations would there be to the tune that one of the parties caved in, and so forth? Leaders of the two countries have shown genuine responsibility with regard to their peoples and the international community. It is no accident that they say – with good reason – that Russian-Chinese relations are a model for a new type of international relations for other countries.
The fundamental needs of the two economies also required careful approaches and a willingness to achieve compromises. For Russia, the gas contract with China meant gaining access to new strategically promising Asian markets, showing a readiness to develop new gas fields and getting hold of a major bargaining chip in its talks with European consumers who are bearish on gas prices amid a shale gas revolution.
For China, Russian pipeline gas has always been about guaranteed safe and secure supplies and achieving medium- and long-term socioeconomic development goals, especially for its industrial base located in northeast China, as part of its strategic course to transition to cleaner energy sources and go from coal to natural gas.
Gazprom’s understandable focus on getting European contract prices for its gas ran counter to the effective demand for energy on the Chinese market. High gas prices would have affected the entire production chain in China and significantly reduced the global competitive edge of Chinese exports.
However, by the time the Russian-Chinese summit took place in 2014, the parties had realized that any further delay in signing a gas contract would be detrimental to China and, even more so, Russia. And the parties laid all their cards on the table. Long and hard work (Russian negotiators in Shanghai said they were “squeezed like a lemon”) resulted in finding a mutually acceptable compromise. Just as in sports, there was a difficult, long-awaited and honest victory.
As a result, the gas deal (its final stage resembled a Hollywood thriller full of passion, disappointments and a longed-for happy ending) became a symbol and the main outcome of President Putin’s visit to China. Also, it is a convincing evidence that the attempts by certain circles in the West to isolate Russia internationally because of Ukraine and Crimea have failed completely. Despite the seemingly neutral and restrained Chinese position on Ukraine, the leaders of Russia and China reached a high degree of mutual understanding on this issue.
Suffice it to mention their call in their joint statement to “abandon the language of unilateral sanctions, stop organizing, helping, financing or encouraging activities aimed at changing the constitutional system of another state or involving it in a multilateral association or union.” A fitting description of the latest political games played by the West in Ukraine.
The undeniable international importance of Putin's visit to Shanghai is also reflected in the fact that Russia and China have once again demonstrated their commitment to the win-win strategy and their readiness for strategic cooperation in all areas for the sake of their own national interests, but not against any third party. The visit demonstrated that the Western counties’ concerns about the new Russian-Chinese alliance are groundless.
For Russia, the main result of its President's visit to Shanghai is clear: it’s the real beginning of Russia's turn to the East, an issue that has been much debated before. The Russian-Chinese gas deal opens up possibilities for further large-scale bilateral cooperation to develop Eastern Siberia and the Russian Far East. It demonstrates an understanding by the Russian political and economic establishment of the importance, the sheer size and the difficulty of this strategic turn.
The most important thing now is to keep moving further...
Vladimir Petrovsky is Researcher, Institute of Far Eastern Studies, Russian Academy of Sciences, full member of the Russian Academy of Military Sciences.
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.
