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Putin visits China: $5.5bln in deals expected

Published: 13 October, 2009, 12:22
Edited: 13 October, 2009, 18:01

Vladimir Putin (R) with Chinese Premier Wen Jiabao (AFP Photo / Pool / Kota Kyogoku)

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TAGS: Meeting, Putin, Asia, Russia, Politics, Economy


Prime Minister Vladimir Putin is leading a high-powered delegation to China which is sealing deals worth more than $5 billion in energy, infrastructure and telecoms.

The delegation comprises more than one hundred senior Russian business leaders. They are hoping to win a bigger slice of one of the world’s largest markets.

Putin was greeted by his Chinese counterpart Wen Jiabao on his arrival, with two way trade and energy agreements worth $3.5 billion already signed.

During his visit he is also scheduled to meet with China’s President Hu Jintao, and take part in a meeting of the Shanghai Cooperation Organization (SCO) on Wednesday.

Gazprom CEO, Aleksey Miller, has announced on Tuesday that China and Russia have agreed on ramping up gas supplies to the booming Asian economic powerhouse.

Russia is looking to expand machinery exports to China, but also to increase yuan-ruble trade, which soared to 58 billion dollars in 2008 from just over 9 billion in 2002. So, it’s obvious the growth of trade between the two countries is tremendous.

This comes following recent rumors that Gulf states are going to try to dump the dollar, perhaps with Russia and China joining in, as the currency used for oil transactions.

Robert Fisk, the journalist for the Independent newspaper who revealed the scheme, told RT earlier that “one of the Chinese bankers said to me, including a broker sitting at the table, he said: ‘Believe me, your report is correct, but you will receive a thunder of denials,’ and indeed that is what happened. It is interesting that China has not come out with any huge denials. Russia has of course up to a point and the Gulf Arabs. But it is in the interest of the Arabs, and all the nations involved, to deny this is happening at the moment.”

The demise of the dollar would be catastrophic for China, but there has been great interest expressed from both China and Russia on the idea of a new world reserve currency to replace what financial forecaster Gerald Celente calls “phantom money”.

“This is where the real battle is going to happen. China does not want to see the dollar collapse because they are holding trillions of them. They do not want to be paid back with cheap money and nobody does. This is really a worldwide problem, not just America’s.”

Dropping the dollar as the key trading currency, which would be of interest for the Russia-China partnership, isn’t realistic, believes Natalia Zaderey from the Institute of Far Eastern Studies in Moscow.

The meeting is expected to focus on the strengthening of humanitarian and economic cooperation between the SCO member states, including their cooperation in overcoming the consequences of the global financial crisis.

Heads of Government of the SCO member states are also to discuss joint projects in the transport, energy, information and telecommunication spheres.

The SCO, founded in 2001, consists of Russia, China and the ex-Soviet republics of Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.

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12.10.2009, 20:50 1 comment

“Dropping the dollar? Not very realistic”

Speculation about dropping the dollar as the key trading currency, which would be of interest for the Russia-China partnership, aren’t realistic, said Natalia Zaderey from the Institute of Far Eastern Studies in Moscow.

13.10.2009, 12:46 1 comment

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Bogdanov October 13, 2009, 16:10
0

Bianca, you know that I am your big fan and supporter. I would say -- unconditional supporter. Because, as long as I know you, you never failed to provide rational and balanced views on any topic and event. At least, from my perspective. Therefore everything you say -- I take of faith. :-) And, of course (not surprisingly), here, you are right again. Assuming, that I understood you correctly. Basically, you agree with me, that even though for Russia the cooperation with China is certainly would be helpful as well, but, considering the current situation -- it is more about China's benefits than Russia's. The biggest problem today, as I see it -- Russia and China have different cultures which cannot be intermixed. At least, in the near future. Therefore, if China moves in (even business-wise) to the Russian territory, we are talking about not about mixing, but replacing one culture by another. Basically, replacing Russian population by Chinese. Which I would not be considered it as a problem per se -- it would be totally OK to have the Chineese national district inside of Russia. The problem, may arise from the proximity of China and in case of any territorial conflicts between two countries. That might be very nasty thing. Again, because, of two "alien" cultures. I think, that American culture and mentality is much closer to the Russian's. Therefore, if the US would be instead of China, I would be voting by my both hands for very very close cooperation. May be even opening the borders between them. But, unfortunately, these two stupid nations (the USA and Russia) still cannot understand that they need each other and they are the brothers who should be reunited in their home again.

Bianca October 13, 2009, 04:27
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Bogdanov, "... Russian business leaders form the delegation, hoping to win a bigger slice of one of the world’s largest markets". Win with what? " Russia has vast resources, other then energy resources. Russia needs direct investments in a whole host of areas, and China is the country looking for places to invest their earnings, so as to avoid further accumulation of dollars. Russia is also looking for ways to diversify out of dollars in energy trade, and the recycling of Chinese export-dollars through direct investments can provide the means for sustaining Russia's problematic dollar-dependent import sector. China is looking for all forms of opportunities, and Russia is not an exception. As the rationale for focusing on exports is shifting, China will refocus on "real" investments, such as production and resources, while increasing domestic consumption. I agree that Russia needs to solve its West-centric development model. I agree fully that immigration is the key, provided that Russia rethinks its development strategy, and combines the resources that are now spent separately on upgrading everything from cities, universities, and industrial capacities --- to medicine and military. There a great push for investment in technologies, but no push for using the technologies in a practical manner to speed up the development of East-West corridors for immigration to make sense. As of now, where would the immigrants go? The development strategy that is left to itself does not work. In China, last year every month one new city for over 100,000 was built. Those are planned and focused developments that go hand in hand with the economic policy and the investments both by state sector and private -- both domestic and foreign investment. But most often, investors are brought to facilities already built, of various sizes, to suit various production needs. Together with infrastructure, transportation, and landscaping!

jon October 12, 2009, 21:28
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This is a wise move by both P. M. Putin and the Chinese leadership. It is hoped that they can delay the coming bust of the Chinese bubble. The world does not need a worldwide depreciation. Actions speak louder than words.