Xi and Putin meet for Olympics Summit
Beijing attempts to balance interests
Beijing and Moscow agreed to a limited natural gas deal via Gazprom and CNPC at the Xi-Putin bilateral summit. While the exact terms of the contract are not publicly available, the two sides reportedly agreed to the delivery of 10 billion cubic meters of natural gas along the Far Eastern route. For reference, the existing Power of Siberia-1 (PoS-1) pipeline will slowly ramp up to a full capacity of 38 billion cubic meters per year and (reportedly) cost $400 billion USD with a contract term of 30 years. Russia’s Gazprom, which currently holds a monopoly on pipeline exports, sends about 200 Bcm/yr to Europe in “normal” years.
Many key details of the natural gas tie-up have not been disclosed. The omission of contract term length from the press release likely indicates that its duration will be shorter than 30 years. Moreover, it is not clear which side will provide the financing. In the original PoS-1 Russia-to-China natural gas pipeline, Russia was reportedly saddled with financing project construction costs, shifting project risks to Moscow and Gazprom. Finally, what is the pricing structure? Did Beijing drive a hard bargain in negotiations, or is it using the pipeline as a slush fund to subsidize a friendly regime?
Beijing tried to strike a balanced optics management approach during the Olympic Ceremony. Putin and Xi wore similar ties and suits to their bilateral meeting, perhaps to suggest that sartorial coordination reflects growing political ties. They didn’t appear to shake hands, likely due to COVID caution (yes, COVID doesn’t appear to spread through fomites, but the optics still would’ve been awkward). Perhaps most importantly, however, the two figures didn’t sit together at the Olympics Ceremony. A bilateral sit-together would have made an indelible impression on tens of millions of television viewers, particularly in Europe, linking Xi and Putin immediately before the latter appears set to launch another escalation in Ukraine. Still, Xi never publicly called on Putin to deescalate, even as fears of a violent conflict grow by the day.
Putin might launch an invasion at any time in the next few days. While Putin may still ultimately deescalate, it’s getting harder and harder to find supporting evidence for that theory. Putin will likely escalate before the end of the month and as soon as this week. Hold fast.
Finally, Xi met with Kazakh President Kassym-Jomart Tokayev at the Olympics and, interestingly, repeatedly stressed the need to maintain Kazakh independence. Tokayev pushed out CSTO troops quite rapidly after the late December turmoil from economic protests and elite infighting. I continue to suspect that Beijing was uncomfortable with Russian troops and intelligence operatives enjoying access to key Kazakh personnel and facilities. Beijing may have hinted to Tokayev – albeit subtly and deniably – to remove CSTO troops as quickly as possible.
Table of Contents
Xi and Putin
Lavrov and Wang
Energy deals and summit outcomes
China, Kazakhstan, and all-weather friends
1) Xi and Putin
On the afternoon of 4 February, President Xi Jinping held talks with Russian President Vladimir Putin at the Diaoyutai State Guesthouse in Beijing. In a warm and friendly atmosphere, the two Presidents had an in-depth and thorough exchange of views on China-Russia relations and a series of major issues that concern international strategic security and stability….
President Xi noted the ongoing spread of COVID-19 globally, a world entering a new phase of fluidity and transformation, and the multiple challenges and crises facing humanity. Against this backdrop, China and Russia have stayed true to their abiding commitment and kept their bilateral ties on a track of steady progress. The two sides have firmly supported each other in defending their core interests, strengthened political and strategic trust, and achieved a new high in two-way trade. The two sides have taken an active part in the reform and development of the global governance system, followed true multilateralism, safeguarded the true spirit of democracy, and served as a bulwark in mobilizing global solidarity at these trying times and upholding international fairness and justice. President Xi expressed his readiness to work with President Putin to draw up a blueprint and chart the course for China-Russia relations under the new historical circumstances and turn the high-level trust between the two countries into cooperation outcomes across the board, in a bid to deliver real benefits to the two peoples.
President Xi underscored that in response to an international landscape full of profound and complex evolution, China and Russia have stayed committed to deepening strategic coordination of mutual support and standing shoulder to shoulder for international fairness and justice. This is a strategic choice that will have a far-reaching impact on China, Russia and the rest of the world. The two countries have never and will never waver in this choice. The two sides need to keep up their close high-level exchanges, follow their four-point agreement on firm mutual support, strongly support each other in upholding sovereignty, security and development interests, effectively counter external interference and threats to regional security, and maintain international strategic stability. The two sides need to engage in even closer coordination and collaboration in international affairs, and demonstrate responsibility and take action, as two major countries, to address issues of immediate concern to the international community, including combating the pandemic, bolstering growth, and tackling climate change.
Russian-Chinese talks – The Kremlin
The talks focused on the bilateral agenda and trade and economic cooperation. The President of China mentioned the intention to increase bilateral trade to US$250 billion. [Comment: Over what period of time? Bilateral trade totaled $147 billion USD in 2021, so a target of $250 billion/year is (somewhat) plausible by 2030/2035 if commodity prices remain elevated and Russia dramatically expands hydrocarbon export volumes to China.] The President of Russia spoke about promoting the use of national currencies in mutual settlements, which the Chinese side supported. They also discussed bilateral military-technical cooperation, mutual recognition of coronavirus vaccines and the opening of borders depending on the epidemiological situation.
A joint Russia-China statement and a package of documents have been adopted within the framework of the visit.
They include an intergovernmental agreement on cooperation in anti-monopoly legislation and competitive policy and several other interdepartmental documents, such as the agreement on cooperation in ensuring compatibility and interoperability of GLONASS and BeiDou navigation satellite systems in terms of the system time scales; a joint statement on the completion of a roadmap for high-quality development of Russian-Chinese trade in goods and services; and a plan of consultations between the foreign ministries of Russia and China in 2022. In addition to that, the sides have signed a memorandum of understanding between the Russian Economic Development Ministry and the Chinese Ministry of Commerce to promote investment cooperation in sustainable (green) development, and a joint statement between the relevant ministries on holding the Russian and Chinese years of cooperation in physical education and sports in 2022–2023.
The commercial contracts signed are related to the purchase and sale of natural gas via the Far Eastern route, and the purchase and sale of crude oil for delivery to oil refineries in Western China. Other documents signed include a memorandum of understanding on cooperation in the field of low carbon development between Rosneft and China National Petroleum Corporation (CNPC), and an agreement on cooperation in the field of information development and digitalisation between Rosneft and Huawei Technologies for the period to 2027.
…
President of the People’s Republic of China Xi Jinping (retranslated):
… Our political and strategic trust is growing stronger. Our mutual trade exceeded US$140 billion last year, thereby reaching a new historic high. Our countries are actively contributing to the reform of the global governance system.
We are working together to promote a truly multilateral world order. Efforts to uphold the real democratic spirit are a reliable foundation for rallying the world towards overcoming crises and protecting equality.
We will keep moving towards this, and we will continue working together with you to map out plans for the further development of Chinese-Russian relations in a new historical period, trying to transform mutual trust between our countries into practical cooperation to the benefit of our peoples.
President of Russia Vladimir Putin:
… Regarding our bilateral relations, they are, indeed, developing steadily in the spirit of friendship and strategic partnership. They have acquired a truly unprecedented nature and are an example of worthy relations that help both parties to develop and, at the same time, support each other in their development.
As you have already noted, our bilateral trade has reached US$140 billion. We are moving steadily towards our goal, namely, reaching US$200 billion in mutual trade [why the different bilateral trade targets? According to the Kremlin’s reporting, Xi set a bilateral trade goal of $250 billion USD in the same meeting]. I am confident that we will certainly attain this level.
Xi, Putin agree on closer strategic coordination – People’s Daily
Chinese President Xi Jinping held talks here on Friday with visiting Russian President Vladimir Putin ahead of the Beijing 2022 Olympic Winter Games opening ceremony. The two leaders agreed to deepen strategic coordination in a cordial and friendly atmosphere.
Recalling his attendance at the opening ceremony of the Sochi Olympic Winter Games in Russia in 2014 when they agreed to meet again eight years later in Beijing, Xi said Putin's visit has realized their "get-together for the Winter Olympics," and their meeting today will inject more vitality into China-Russia relations.
Despite the multiple challenges that face the world, China and Russia have stayed true to their original aspirations and maintained the steady development of bilateral relations, said Xi.
The two countries have firmly supported each other in upholding their respective core interests, enhanced their political and strategic mutual trust, and brought the bilateral trade to a new high, Xi said….
Xi said he stands ready to work with Putin to chart the future and provide guidance for bilateral relations under new historical circumstances. [Comment: what does “provide guidance” mean? That seems somewhat condescending] He expressed willingness to work with Putin to promote the continuous transformation of high-level mutual trust between China and Russia into results of cooperation in all fields and bring real benefits to the people of the two countries…
Xi stressed commitment between China and Russia to deepening back-to-back strategic coordination and upholding international equity and justice side by side in the face of profound and complex changes in the international situation.
The strategic choice, which has far-reaching impacts on both countries and the world at large, has never been and will never be shaken, said Xi.
Xi called on both sides to continue to maintain close high-level exchanges, give strong support to each other in safeguarding sovereignty, security and development interests, effectively respond to external interference and regional security threats, and maintain international strategic stability.
Both sides should step up coordination and cooperation in international affairs, and shoulder major-country responsibilities in global issues of pressing concern, such as fighting COVID-19, boosting the economy and tackling climate change, said Xi.
China is ready to work with Russia to give full play to the political advantages of bilateral relations and push for more achievements in all-round pragmatic cooperation, Xi said.
He called for implementing the roadmap for high-quality development of China-Russia trade in goods and services, deepening cooperation in such areas as agriculture, green trade, medicine and health, and the digital economy, promoting transport infrastructure connectivity, and maintaining the smooth logistics on the Eurasian continent as well as stability of global industrial and supply chains.
China and Russia should strengthen their strategic partnership in energy, steadily advance major oil and gas cooperation projects, step up joint innovation in major energy technologies, expand cooperation on new energy, support each other in ensuring energy security, and improve the global energy governance system, he said…
The two countries should deepen communication on fiscal and financial policies, strengthen their capability of resisting financial risks, and seek greater synergy between the Belt and Road Initiative and the Eurasian Economic Union, he said…
Putin said he is delighted to be invited to the opening ceremony of the Beijing Olympic Winter Games, and noted that the exchange of visits during the Olympics has become a symbol and a good tradition of close relations between the two heads of state.
He expressed belief that the Chinese people will definitely present a Winter Olympics of the highest level to the world, expecting wonderful performances of both Russian and Chinese athletes.
Noting that the COVID-19 pandemic has not prevented him from maintaining close exchanges with President Xi through various channels, Putin said the bilateral trade has made steady progress, and the two countries have cooperated closely on international affairs.
He said Russia regards China as its most important strategic partner and like-minded friend, and Russia-China relations are a model of international relations in the 21st century.
The Russian side is willing to further deepen strategic communication and coordination with the Chinese side, firmly support each other in safeguarding sovereignty and territorial integrity, firmly uphold the core coordination role of the United Nations, firmly uphold international law and international fairness and justice, and promote the building of a more just and reasonable international order, Putin said.
2) Lavrov and Wang
Question: Did you discuss Russian-US relations? What is China’s position?
Sergey Lavrov: Without exaggeration, President of the Russian Federation Vladimir Putin and President of the People’s Republic of China Xi Jinping had a detailed discussion covering the entire range of bilateral and international relations. The leaders reaffirmed the line they determined several years ago towards the steady development of strategic partnership in all areas: the economy, energy, humanitarian and cultural ties, military and military-technical cooperation. Once again, bilateral relations were described as “the best in the entire history of ties between Russia and China.” The President of the PRC emphasised that they even surpassed allied relations in some areas. [Comment: Which areas?]
As for international issues, the primary focus was the tensions that the West has been deliberately escalating around Russia and China. The President of Russia described once again our position at the talks with the United States and NATO on the need to work out clear security guarantees in Europe. The PRC President reaffirmed support for Russia’s stand on this problem. He emphasised that it reflected the fair aspirations of the Russian state and people.
We agreed to closely coordinate our actions in the international arena, including countering the attempts to erode the UN (the foundation of universal international law) and to establish hobby clubs that will only create more dividing lines in international affairs. [Comment: “Hobby clubs” is a reference to AUKUS and probably the Quad. Note the difference between Beijing and Moscow’s messaging: the PRC has referred to AUKUS, the Five Eyes, and the G7 as “small circles” while the Kremlin is characterizing these groupings as “hobby clubs.” I bet Lavrov and other Russian diplomats cringe when they hear their Chinese counterparts use “small circles” to refer to grouping of countries, as it draws attention to the China-Russia entente, which is barely multilateral] We are consistently opposing this and are upholding the system of international relations sealed in the goals and principles of the UN Charter.
Question: The whole world is closely following these talks. Should we expect any surprises regarding agreements between Russia and China? Will they be followed by something that will perplex the West?
Sergey Lavrov: It is not for me to guess what might perplex our Western colleagues in current conditions… They do things for a reason or for no reason (mostly for no reason) or for reasons that they themselves invent. I read statements on the internet by the US Department of State to the effect that Russia is preparing fake videos allegedly depicting an attack against Donbass by the Ukrainian military. The lunacy of such allegations (and there are more and more of them every day) is obvious to any more or less experienced political scientist.
We greatly value the unprecedented level of cooperation with our Chinese friends, their firm and reciprocal support. Our relations rely on broad public consensus in both countries. They are self-sufficient, sustainable and immune to the fluctuations of the political environment. They are not aimed against third countries. Our foreign ministries maintain close cooperation that facilitates stability and predictability in international affairs.
Like China and the overwhelming majority of countries, Russia is categorically opposed to boycotting international competitions, politicising high-level sports instead of respecting the ideals of the Olympic movement and turning sports into a tool for exerting pressure on objectionable countries. I would like to wish Russian and Chinese Olympians exciting battles, impressive victories in honest competition, and new records.
Wang Yi said that today is the third day of the Chinese New Year, a day to visit relatives and celebrate the new year. Old friends are welcome to visit at this time. Tomorrow, President Xi Jinping and President Putin will hold their first offline meeting in more than two years to realize the "Winter Olympics Covenant" and hold a "New Year's Meeting" to lay out the layout for Sino-Russian relations in the post-epidemic era. This reflects the high level of strategic cooperation between the two countries and the high level of mutual trust and friendship between the two heads of state. The first task of our meeting this time is to make the final political preparations for the meeting of the heads of state….
Wang Yi said that promoting the connection between the "Belt and Road" construction and the Eurasian Economic Union is an important consensus reached by the two heads of state, which is being actively promoted and early harvests have been achieved. China is willing to work with Russia to further strengthen connectivity and actively promote cooperation in the entire energy industry chain in the upstream, midstream and downstream. At present, all the "blocking points" of practical cooperation between the two countries due to the epidemic have been generally cleared. The two sides should build consensus on the fight against the epidemic, enhance mutual understanding and trust, strengthen the alignment of measures, stop the cross-border spread of the epidemic, ensure normal personnel and trade exchanges between the two countries, and promote stable and long-term bilateral pragmatic cooperation.
The two sides agreed to carry forward the Olympic spirit, jointly resist the politicization of sports, and support the successful hosting of the Beijing Winter Olympics.
Both sides unanimously advocate maintaining peace and stability in the Asia-Pacific region and oppose any attempt to create bloc [comment: 阵营 = bloc or faction] confrontation and group confrontation.
The two sides agreed to carry out coordination and cooperation between the Shanghai Cooperation Organization and the Collective Security Treaty Organization to jointly promote peace and stability in Afghanistan.
The two sides agreed to deepen communication and cooperation within the framework of the SCO, BRICS, China, Russia, India, and the United Nations, and jointly safeguard the norms of international relations and regional and international security.
王毅说，今天是中国大年初三，是走亲戚、贺新春的日子，欢迎老朋友此时来访。明天，习近平主席将同普京总统举行两年多来首次线下会晤，实现“冬奥之约”，举行“新春之会”，为后疫情时代的中俄关系谋篇布局。这体现了两国战略合作的高水平，彰显了两国元首的高度互信和友谊。我们此次会晤的首要任务就是为元首会晤作最后的政治准备。
王毅表示，推动“一带一路”建设与欧亚经济联盟对接是两国元首达成的重要共识，正积极推进并已取得早期收获。中方愿同俄方进一步加强互联互通，积极推进能源上中下游全产业链合作。当前，因疫情造成的两国务实合作的所有“堵点”已总体打通。双方要凝聚抗疫共识，增进理解互信，强化措施对接，阻断疫情跨境传播，保障两国正常人员和贸易往来，推动双边务实合作行稳致远。
拉夫罗夫表示，非常高兴在春节期间到中国探访老朋友。两国元首明天将举行线下会晤，这对于进一步深化俄中关系、推动构建现代国际关系体系、促进全球可持续发展具有十分重要的意义。俄中开展高水平战略协作和密切协调是双方共识，不受国际政治局势影响，有利于增强国际关系的稳定性和可预测性。北京冬奥会将于明天开幕，北京将成为首座“双奥城”，世界将看到中国克服疫情蔓延影响举办精彩国际体育赛事的非凡能力。俄方赞赏中方为深化两国合作作出的努力，愿同中方加强欧亚经济联盟和“一带一路”建设对接，扩大双方共同利益。
双方一致同意弘扬奥林匹克精神，共同抵制将体育政治化，支持北京冬奥会成功举办。
双方一致主张维护亚太地区和平稳定，反对任何制造阵营对立和集团对抗的企图。
双方同意开展上海合作组织和集体安全条约组织协调配合，共同促进阿富汗和平、稳定。
双方同意深化在上合组织、金砖国家、中俄印、联合国等框架内沟通合作，共同维护国际关系准则和地区与国际安全。
3) Energy deals and summit outcomes
Kremlin reveals number of approved agreements during Putin’s visit to China – TASS
A package of 16 intergovernmental, interdepartmental and commercial documents was approved as part of the visit of Russian President Vladimir Putin to China. The list of documents was posted on the Kremlin’s website on Friday.
The Joint Statement of the Russian Federation and the People’s Republic of China on the International Relations Entering a New Era and the Global Sustainable Development was adopted during the Sino-Russian summit talks.
In particular, the Russian state corporation Roscosmos and the Chinese Satellite Navigation System Commission signed a cooperation deal in the sphere of mutual complementarity of the GLONASS and Beidou global satellite navigation systems.
The Russian Ministry of Economic Development and China's Ministry of Commerce made a joint statement on the completion of developing a roadmap for mutual trade in goods and services and signed a memorandum of understanding for deepening investment cooperation in sustainable (green) development areas.
The customs authorities of Russia and China signed a protocol on mutual recognition of the status of an authorized economic operator. The parties approved 11 intergovernmental and interdepartmental documents in total.
Four commercial contracts were signed during the visit. Gazprom and CNPC inked a long-term contract for the delivery of 10 bln cubic meters of natural gas over the Far Eastern route. Rosneft and Huawei sealed a deal on cooperation. Rosneft and CNPC signed an agreement on the deliveries of 100 mln tonnes of oil via Kazakhstan over a decade and approved a memorandum of understanding to cooperate in the low-carbon development sphere.
Gazprom, CNPC sign agreement on supply of 10 bcm of gas from Far East – TASS
Gazprom and China’s CNPC have signed a long-term agreement on the supply of 10 bln cubic meters of natural gas via the Far Eastern route, Russia’s gas holding said in a statement on Friday.
"The signing of this document is an important step towards further strengthening the mutually beneficial cooperation between Russia and China in the gas sector. As soon as the project reaches its full capacity, the amount of Russian pipeline gas supplies to China is going to grow by 10 billion cubic meters, totaling 48 billion cubic meters per year (including deliveries via the Power of Siberia gas trunkline)," the statement said.
"This is already a second contract to be signed for Russian gas supplies to China, and it is indicative of the exceptionally strong mutual trust and partnership between our countries and companies. Our Chinese partners from CNPC have already seen for themselves that Gazprom is a reliable gas supplier," Gazprom Chief Executive Officer Alexey Miller was quoted as saying.
Gazprom and CNPC signed an agreement on main conditions for pipeline gas supplies from Russia to China via the "western" route (Power of Siberia 2 gas pipeline) and a memorandum of understanding on the project of pipeline deliveries of natural gas to China from Russia’s Far East back in 2015.
Gazprom reported the completion of the feasibility study for the Soyuz Vostok gas trunkline construction project in late January. The trunkline will become an extension of Russia's Power of Siberia 2 gas pipeline in Mongolian territory and will make it possible to supply up to 50 bln cubic meters of gas per year to China.
This is the second long-term sales and purchase agreement for gas to be signed by the companies.The Far Eastern route is going to increase the amount of Russian gas supplies to China by 10 billion cubic meters.
Gazprom and China National Petroleum Corporation (CNPC) signed a long-term Sales and Purchase Agreement for natural gas to be supplied via the Far Eastern route.
The signing of this document is an important step towards further strengthening the mutually beneficial cooperation between Russia and China in the gas sector. As soon as the project reaches its full capacity, the amount of Russian pipeline gas supplies to China is going to grow by 10 billion cubic meters, totaling 48 billion cubic meters per year (including deliveries via the Power of Siberia gas trunkline).
“This is already a second contract to be signed for Russian gas supplies to China, and it is indicative of the exceptionally strong mutual trust and partnership between our countries and companies. Our Chinese partners from CNPC have already seen for themselves that Gazprom is a reliable gas supplier,” said Alexey Miller.
As an important participant in Sino-Russian energy cooperation, CNPC recently signed a number of cooperation documents with Russian partners, opening up a new situation for further strengthening mutually beneficial cooperation in oil, natural gas, new energy and other fields.
On February 3, CNPC and Gazprom signed a Sino-Russian Far East natural gas purchase and sale agreement. On February 4, CNPC and Rosneft signed a supplementary agreement on the purchase and sale of crude oil to ensure oil supply to refineries in western China. As of January 2022, PetroChina has imported more than 300 million tons of pipeline crude oil and more than 15 billion cubic meters of natural gas from Russia. The signing of the above-mentioned cooperation documents will further consolidate China's northeast and northwest energy channels and lay a solid foundation for deepening the long-term cooperation in the oil and gas field between China and Russia.
4) China, Kazakhstan, and all-weather friends
Xi Jinping pointed out, since the establishment of diplomatic ties between China and Kazakhstan 30 years ago, bilateral relations have been continuously scaling new levels and reached a new height of permanent comprehensive strategic partnership. The dimension of China-Kazakhstan relations has gone beyond the bilateral scope and is of great significance to regional and even world peace and stability. An independent, safe, stable and prosperous Kazakhstan accords with the common interests of the Chinese and Kazakh peoples. China firmly supports Kazakhstan in safeguarding independence, sovereignty and territorial integrity, and believes that Kazakhstan has the ability to safeguard national security and social stability.
Comment: Note the stress on Kazakh independence.
During their interactions, the leaders of the two countries held in-depth exchange of views on the entire spectrum of bilateral relations as well as regional situation and international political landscape. The meetings were marked by traditional warmth, strategic mutual trust and commonality of views that characterize the Pakistan-China All-Weather Strategic Cooperative Partnership.
Comment: It’s been quite some time since Chinese state media and Chinese officials characterized Sino-Russian relations as “all-weather” (全天候). In June 2021, Zhao Lijian said: “It is fair to say that the China-Russia comprehensive strategic partnership of coordination for the new era is all-dimensional and all-weather.” Zhao could have spoke out of turn or made a slip up - or Beijing is still trying to find its footing.
v/r,
Joe Webster
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.