Stalin-Mao Roles Reverse as Putin Courts Chinese Investment

Interesting version from an American news source. Tone is that China got the upper hand. The Chinese and European news sources earlier in the day played it as a good deal for both sides. At $3.5/MJ for gas, it's probably a Chinese win. At $4/MJ for gas, it's probably a Russian win. Wonder if we'll ever see the final price. No question that fear of the Middle Eastern and Aussie suppliers drove the Russians to get this done now.

Note the comment on 100M tonnes of oil; that's about 2M brls/day. Unclear if that's incremental or total (Russian shipments to China in 2013 were less than 1M brls/day and Middle Eastern shipments were more than double that). It still knocks a big hole in Arab income if China cuts back buying there and it hammers the Petrodollar game off the planet. Couple that to BRICS and only Forrest Gump can't see it. Even after 8 years in the WH rigged by Daddy. Outflanked, outwitted and out of time. The end game is clear.


Photographer: Sergei Ilnitsky/Pool/AFP via Getty Images

Bloomberg
By Stepan Kravchenko
and Henry Meyer
19 May 2014

China, which relied on Soviet aid during the era of Joseph Stalin and Mao Zedong, has turned the tables as Russian President Vladimir Putin visits Shanghai.

The Russian leader starts a two-day visit to China today, seeking to complete an agreement on natural gas supplies to the world’s second-largest economy, held up for more than a decade because of a debate over the price. The contract is “nearly finalized,” Putin told Chinese media in an interview published yesterday.

Putin is looking to cement ties with China as the conflict in Ukraine alienates him from the U.S. and its European allies. The relationship with China, Russia’s biggest trading partner after the two-way volume surged sevenfold in the past decade to $94 billion last year, is becoming even more important as escalating sanctions threaten to tip the economy into recession.

“As Russia’s relations with the West deteriorate, its ties with China will need to grow stronger,” Dmitri Trenin, director of the Carnegie Moscow Center, said by e-mail. “Beijing, rather than Moscow, will be the senior power.”

That role reversal is underscored by the disparity of the two countries’ economic development during the past 35 years. In 1979, as Deng Xiaoping started an economic overhaul, China’s output was 40 percent of the Soviet Russian Republic’s -- the present-day Russian Federation, according to a study published this year by the Center for European Reform. By 2010, China’s economy had become four times the size of Russia’s, it said.

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