What to watch for in the Xi-Putin meeting

Beijing on May 19-20

Greetings from the China-Russia Report’s (very) temporary headquarters at the charming Rutland Arms in Fulham, London. I’m off to Oslo tomorrow for Statkraft’s energy geopolitics conference, where I’ll speak Tuesday on The Chinese electrostate and Europe: Managing Complex Risks. There’ll be a lot to talk about. Other speakers will include Jake Sullivan, Ulf Sverdrup, and more. It’s very last minute, but if you’re in Oslo and would like to meet up tomorrow or Tuesday, then give me a shout. – Joe

Image: ChatGPT image generation

The Xi-Putin meeting

It’s confirmed: Xi Jinping and Vladimir Putin will meet in Beijing on May 19^th and 20^th, just days after the Trump-Xi summit. Here’s what to watch for.

1. The meeting itself is a message.

Xi is using Putin to counterprogram Western head-of-state convenings. After the summit, President Trump called Japanese Prime Minister Sanae Takaichi after his visit to Beijing, and said he would call “the leader of Taiwan” – presumably Republic of China President Lai Ching-te.

A U.S. president calling the leader of Japan, America’s most important ally in the region, after a meeting with Beijing is unremarkable. On the other hand, holding direct communications with the leader of the Republic of China would mark a sharp departure from recent practice: a U.S. President has not talked directly with Taiwan’s leader since 1979. Trump’s December 2016 post-election call with then-President Tsai Ing-wen was conducted before he assumed the U.S. presidency in January 2017. Trump, who said he would consider calling Lai in an off-the-cuff press conference, may be unaware of the unprecedented and highly sensitive nature of direct calls with the ROC leader.

2. Taiwan may be the subtext of the Xi-Putin meeting.

As Amanda Hsiao and Bonnie Glaser write, Beijing is playing a long game on Taiwan as it believes time is on its side. The PRC may indeed secure its favored outcome in Taiwan’s January 2028 election, which would vindicate Beijing’s patient approach. On the other hand, there is a significant risk that Beijing may judge that it has a closing window of opportunity if certain political trends in Taiwan materialize, the U.S. experiences intense political discord, and AI/AGI timelines compress. The summer of 2028 – the time of year when Taiwan’s grid is strained, even in peacetime, and the island can most easily be blockaded – may be a moment of peak danger.

Xi may regard the current period as a moment of opportunity to press Washington over Taipei. Moreover, given his propensity for hedging against all eventualities – a feature seen in Putin-Xi ties – Xi may be positioning himself to move quickly against Taiwan, if needed, including if the U.S. continues to outpace Chinese AI capabilities.

3. Given that Taiwan may be top-of-mind for Xi during his meeting with Putin, keep a close eye on China-Russia energy deals, especially overland oil pipeline volumes.

The most consequential vector for further Sino-Russian oil cooperation involves the East Siberia-Pacific Ocean (ESPO) pipeline. ESPO has a capacity of approximately 1.6 Million Barrels per Day (MMBPD) and primarily draws volumes from eastern Russia. A little under half of ESPO’s oil exports are sent overland to the PRC via pipeline; the rest are shipped to Russia’s Kozmino export terminal, where they enjoy greater optionality (but typically find their way to China anyway, especially in the post-full scale invasion period). ESPO’s overland China leg could be expanded very easily, and quickly, and would significantly enhance Beijing’s oil security in a Taiwan contingency.

While it will likely be logistically difficult or politically impractical for a U.S./Japan-led coalition to interdict Russia-to-China maritime oil shipments, even in a contingency, the PRC’s oil security would be enhanced if it can access greater overland oil volumes from Russia, especially along ESPO. The only way for the coalition to physically interdict overland oil shipments would be to escalate to kinetic or cyber attacks.

Xi and Putin may also agree to new volumes along the Kazakhstan–China Crude Oil Pipeline, on the Atasu-Alashankou axis. This pipeline is not fully subscribed, and Beijing and Moscow have agreed to expand bilateral shipments in February 2022 and (reportedly) again in September 2025. U.S. sanctions on Rosneft, if enforced, could complicate a new deal.

There is also the potential for Beijing and Moscow to agree to the Power of Siberia-2 (PoS-2) natural gas pipeline. There are many, many reasons to be skeptical that the pipeline will ever be built, due to financing, cost, political challenges routing it through Mongolia, its risk of becoming a stranded asset, and more. The project faces steep challenges and is very likely not commercially viable – even if Qatari LNG faces long-term outages.

Nevertheless, PoS-2 may move forward for political and energy security rationale. Reuters reported on March 5^th that China’s 5-year plan would advance “early work” on the Power of Siberia-2 natural gas pipeline. If you look at page 26 of the NDRC’s “Outline of the 15th Five-Year Plan for National Economic and Social Development of the People’s Republic of China,” you will indeed find the following language: “建设中俄远东天然气管道、川气东送二线天然气管道，推进中俄中线天然气管道前期工作。” (Or, roughly translated, “Build the China-Russia Far East natural gas pipeline and the second line of the Sichuan-Gas-to-East-China pipeline; advance preparatory work on the central-route China-Russia natural gas pipeline.”) This “advance preparatory work” statement doesn’t signal major interest from Beijing, in my view, although other analysts believe it’s a significant step. Still, it’s possible that Xi and Putin may agree to the PoS-2 natural gas pipeline this week, even if it imposes economic costs for both sides.

4. Be careful about dismissing smaller deals as unimportant.

Inking many smaller arrangements can matter cumulatively; hyping larger potential deals can also enable Beijing and Moscow to manage Western psychological reactions to the smaller deals that do move forward.

Lately, there’s been some odd chatter around an “oil leg” of the Power of Siberia-2 pipeline, which has traditionally included only a natural gas component. To be clear, oil and natural gas cannot share the same pipelines, due to various technical factors, including contamination, operating pressure, different pumping infrastructure, and more. Accordingly, it would be very surprising to see oil and gas PoS-2 megaprojects – especially when neither is commercially viable.

Smaller projects are worth watching carefully: they can sum up to impressive totals and can often be deployed faster and at less risk for both sides. Take China’s incremental natural gas commitments and purchases of Russian natural gas since January 2022. Beijing has agreed to the Far Eastern Route (10 billion cubic meters per year, or bcm/yr); importing greater volumes along PoS-1 and expanding the Far Eastern Route (FER), for an additional total of 8 bcm/yr; and purchased more LNG volumes (about 7 bcm/yr). Taken together, these arrangements total about 25 billion cubic meters per year, or about half of the planned PoS-2 volumes, yet receive a fraction of the policymaker and media attention. That’s a mistake.

Finally, Russia has also expanded exports to Uzbekistan and other CIS countries. While hard to trace, some fraction of these Russian exports to Central Asia indirectly support greater pipeline export volumes to China along the Central Asia-to-China (CACP) natural gas pipeline. Beware the smaller deals. They add up quickly.

Sources: China-Russia Report, BP Statistical Yearbook, TASS, Author’s Calculations

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and the Indo-Pacific Security Initiative; he also edits the independent China-Russia Report. This article reflects his own personal opinion.

The China-Russia Report is an independent, nonpartisan newsletter covering political, economic, and security affairs within and between China and Russia. All articles, comments, op-eds, etc represent only the personal opinion of the author(s) and do not necessarily represent the position(s) of The China-Russia Report.