RUSSIA AND CHINA BOOST TRADE…
Publication: Monitor Volume: 7 Issue: 174
The international tumult surrounding the September 11 terrorist attacks in the United States has pushed several potentially significant developments in Russian-Chinese relations to the back pages. The most important of these was Chinese Premier Zhu Rongji’s six-day visit to Russia earlier this month, during which the two countries attempted to give substance to their increasingly close political relationship by also boosting trade and economic cooperation. That they were able to make some strides in this direction was suggested not only by a package of trade agreements signed by Zhu and Russian Prime Minister Mikhail Kasyanov, but also by reports appearing this week indicating that military-technical cooperation between the two countries may be picking up speed. The suggestion of improved economic relations was balanced somewhat, however, by the fact that neither Zhu nor President Vladimir Putin made any mention, following their Moscow meeting, of what to date has been one of their most important areas of cooperation: joint opposition to U.S. missile defense plans. The omission may have been a reminder that while Moscow and Beijing continue to draw closer in a number of important areas–as evidenced by the friendship treaty they signed this past summer during Chinese President Jiang Zemin’s visit to Moscow–their relations nevertheless remain constrained, both by enduring regional rivalries and by their respective desires to maintain good ties with the West.
The two most important of the seven September 8 trade deals involved Russian civilian airliners and a proposed oil pipeline. Under the terms of the first, Russia is to deliver to China five Tupolev 204-120S passenger planes over the next two to three years. The aircraft, which are estimated to be priced at US$25-30 million each, seat up to 210 passengers and are comparable to Boeing’s 757. Although the sale was a small one and, according to Russian sources, is seen as something of a try-out for the new Russian aircraft, it nevertheless ended a ten-year period in which the Chinese avoided Russian civilian airliners and was hailed as a victory in Moscow. According to Kasyanov, Russia might deliver another ten airliners to China if these first five work out well. Potentially more important, he suggested that the two countries “were only beginning” to cooperate in the sphere of high-tech airplane development, and that they were already preparing to jointly develop a new jet. On this last point, Zhu reportedly confirmed only that such talks had been held. China’s airlines currently field some seventy outdated Soviet-built Ilyushin IL-86s and Tu-154s. According to the Asia Times, Moscow hopes to replace them with both the new Tupolevs and with more advanced Ilyushin IL-96s.
The second of the more important agreements–the pipeline deal–comes after two years of negotiation and is a follow-up to a framework agreement Chinese President Jiang Zemin signed during his visit to Russia last month (see the Monitor, July 18). Zhu and Kasyanov agreed in St. Petersburg to start a feasibility study for the proposed 1,500 mile pipeline that would run from Russia’s Kovykta oil field in Siberia (which lies some 400 miles north of Irkutsk and Lake Baikal, above the Russia-Mongolia border) to China. The line would connect Angarsk, a Russian petrochemical center in southern Siberia, with industrial regions in China’s northern provinces. Construction of the pipeline is estimated at US$1.7 billion. According to Russia’s Energy Ministry, the line would carry 20 million tons of crude oil annually upon completion in 2005 and 30 million tons after 2010. The pipeline study is to be completed within ten months. The Russian oil company Yukos and pipeline company Transneft are to work with China’s national oil and gas company to build the new line.
The other agreements that Zhu and Kasyanov signed reportedly involve cooperation in nuclear energy, telecommunications and border issues. Russian Deputy Nuclear Energy Minister Yevgeny Reshetnikov had earlier been quoted as saying that the nuclear energy deal would include the construction of two power units in China, but the two sides did not spell out the details of the agreement, which was signed on September 8 in St. Petersburg. The agreements in total are part of a roughly half-decade long effort by Russia and China to substantiate political agreements by boosting still anemic levels of bilateral trade. Under President Boris Yeltsin, Moscow and Beijing had pledged to raise trade turnover to US$20 billion annually. That has not happened, however. Overall bilateral trade volume between the two countries was US$8 billion last year and US$4.5 billion for the first six months of 2001. China’s annual trade with the United States, by comparison, amounts to about US$115 billion (Asia Times, September 12; AP, AFP, September 8; Izvestia, September 9; Vremya Novostei, September 10).
…SEND MIXED SIGNALS ON MISSILE DEFENSE.