In the midst of the storm of sanctions and seeing his energy business diminished, Vladimir Putin embraces a red lifeline in the midst of the waves: China. The relationship between Moscow and Beijing is “at the peak of historical development,” Putin said in his statement to reporters after the second day of talks with his Chinese counterpart Xi Jinping. The most important thing for the Kremlin: to recover the strength of its hydrocarbons market, bankrupt by the loss of the European client.
Putin noted that Russia is ready to meet China’s growing energy demand and that the two governments had agreed on “virtually all the details” of a second pipeline that will transport gas from Siberia to China. The Russian president also said that he sees potential for developing a northern sea route with China.
If Putin is an eternal president playing tsar, today he showed that he knows how to treat his remaining great partner like an emperor. Endless red carpet, the city cut out for their entourage, a menu with Chinese winks and the photo of both of them entering -each one through a different door but at the same time- towards the Saint George room to find themselves, with twin ties, in the middle of the historic hall with marble floors and gold chandeliers dedicated to glossing over Russian military glory. Two autocrats unafraid of the West posing before a world worried about their ambitions.
During the summit Putin has been seen to be more tense, compared to a Chinese leader with a tendency to lean back in his chair. The Russian leader fell back into his strange gesture of holding on to the armrests of the chair as if instead of at the end of his fourth term he was on a roller coaster. The feeling is that Moscow, in need of new markets for its economy to resist, has more at stake at this summit than Beijing, always on the hunt for new opportunities.
As Putin searches for replacements for the energy business he killed, the rest of the world is watching the Ukraine war. Also China, which has provided a 12-point peace plan.
Putin blamed the West, which he says is not yet ready for the Chinese peace plan on Ukraine “to become the basis for the solution.” A year after the invasion, Russia faces a protracted war and hopes to pay for it with Chinese client money.
Xi’s state visit is a big boost for Putin, who is facing what he sees as a hostile West bent on inflicting a “strategic defeat” on Russia. But Beijing does not want to go too fast towards the Cold War. Russia and China clarified in a joint statement that the close association between them does not constitute a “political-military alliance.” These relations “do not constitute a bloc, do not have a confrontational character and are not directed against third countries,” the text added, copying the assertive but prudent tone that China has maintained in recent months.
China has in the past shown some concerns about the erratic evolution of the Russian invasion, apprehensions that Putin has done his best to temper in private. Speaking about the talks with the Kremlin leader, Xi summed up that they had been “open and friendly.”
Moscow wants to help Chinese companies replace Western companies that left Russia because of the war in Ukraine. But in the medium term, the Russian priority is to make China the big energy customer.
Putin announced that Russia, China and Mongolia have completed all agreements on the Siberian Force 2 gas pipeline, which exists only on paper.
Russia was the world’s largest gas exporter until it invaded Ukraine. Putin is now turning to China to replace Europe as his main gas customer. But his plan has some conditions. First, the Chinese pay less for Russian hydrocarbons. In addition, the volume still does not ‘match’ with what was sold in the golden years to Europe: gas exports from Russia to China continue to be a tip compared to the record of 177,000 million cubic meters of gas that Russia supplied to Europe between 2018 and 2019 .
The third problem is precisely the infrastructure, which is poor towards the east. It all depends on how far China is willing to depend on Russia for energy supplies. Thanks in part to high oil and gas prices, bilateral trade reached a record high in 2022. But there is a second pipeline that is yet to be used.
Russian hopes are placed on the construction of the third pipeline, with much more capacity. The Siberian Force pipeline would carry 50 billion cubic meters of natural gas every year from Russia to China via Mongolia starting in 2030.
For China, Russia is the second largest supplier of oil and coal. Beijing is a loyal customer: China does not apply the price cap on Russian crude imposed since December by the Group of Seven industrialized countries and their allies. Russia is also the fourth largest supplier of liquefied natural gas. If Putin has a long war in mind, China is the future.
According to the criteria of The Trust Project
