Putin heads to China to cement strategic ties

MOSCOW / AP

With President Vladimir Putin heading to China this weekend, officials in both countries extoll a blossoming “strategic partnership” between the two former communist rivals.
But despite Moscow’s push to strengthen ties with Beijing amid a bitter strain in relations with the West, Russia-China trade has shrunk sharply and a slew of ambitious projects have remained largely on paper. Observers attribute the slow progress to Beijing’s hard-nosed bargaining position and the Kremlin’s deep-seated suspicions about the growing power of its mighty partner.
A shared desire to counter perceived US global domination and strong personal ties between Putin and Chinese leader Xi Jinping, who are to meet on Saturday in Beijing, appear to be the main driving forces behind Russia-China cooperation.
The renewed push to bolster relations with China came after the United States and the European Union imposed an array of crippling sanctions on Russia over its annexation of the Crimean Peninsula in March 2014, cutting its access to world financial markets and blocking the transfer of modern technologies. Moscow was also purged from the Group of Eight leading industrialized nations. In a bid to show the West that the ties with China could offer a viable alternative, Putin visited Beijing in May 2014, presiding over the signing of numerous deals, including a mammoth 30-year natural gas contract worth $400 billion.
A later deal saw a branch of Chinese state-owned energy company CNPC buying a stake in a project to build a giant liquefied natural gas plant on the Yamal Peninsula in the Arctic. Last December, Chinese company Sinopec bought a stake in the Russia’s Sibur energy company.
China also promised to offer multibillion dollar loans to help build a high-speed rail link between Moscow and the Volga River city of Kazan.
Other ambitious deals have been expected, but most of them have floundered amid Russia’s economic uncertainty. A key factor behind Russia-China trade dropping from nearly $100 billion a year in 2014 to just over $60 billion last year has been the sharp devaluation of the Russian currency under the double impact of low global oil prices and Western sanctions. With energy resources accounting for two-thirds of Russian exports to China, trade volumes have shrunk as oil prices fell.
The devaluation of the ruble has spooked Chinese investors, and low energy prices made some prospective energy projects unfeasible. Plans to tap new oil and gas fields in Siberia and build more China-bound pipelines, which require massive investment, have stalled.

China to launch
cruises to disputed Spratly islands

Beijing / AFP

Chinese cruise ships will regularly bring tourists to the contested Spratly Islands in the South China Sea by 2020, reports said on Wednesday, as tensions mount in the region.
Beijing asserts sovereignty over almost all of the strategically vital South China Sea, despite rival claims from Southeast Asian neighbours, and has rapidly built reefs into artificial islands capable of hosting military planes.
Chinese companies already operate cruises—for Chinese nationals only—to the Paracel Islands.
A new proposal seeks to develop routes to the Spratlys, much further south, said the China Daily, which is published by the government. It cited a document released by authorities in the southern island province of Hainan, from where the ships will depart.
“The Nansha Islands are virgin territory for China’s tourism industry,” provincial tourism official Sun Xiangtao told the paper, using the Spratlys’ Chinese name.