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‘China, Russia have areas of mutual interest to be further exploited’

Published time: May 22, 2014 11:48
 China's President Xi Jinping (back R) and Russia's President Vladimir Putin (back L) attend an agreement signing ceremony in Shanghai on May 21, 2014, with Gazprom CEO Alexei Miller (front L) and Chinese state energy giant CNPC Chairman Zhou Jiping (front R) signing an agreement.(AFP Photo / Alexey Druzhinin )

China and Russia have relatively the same policies in various areas like energy policy or the Middle East, so it is pragmatic and beneficial cooperation, economic analyst Sassan Ghahramani told RT.

RT: Is the West trying to downplay this deal?

Sassan Ghahramani: I think this contract is first and foremost a very opportunistic contract from China’s perspective. There are geopolitical benefits to it, but I would not downplay the commercial interests that go hand in hand. From the geopolitical side clearly there are benefits to both Russia and China. Russia is finding a long-term source of diversification of its sales away from Europe and towards China, specifically in the east. It is particularly important because of the recent crisis. It has become clear to Moscow that obviously not only Europe needs Russia, but also Russia has a large linkage with Europe as its primary market as well. For China this is a source of long-term diversification of its supplies, and China has an interest in always playing a balancing act between the US and Russia. But first and foremost I would look at this as a commercial transaction.

RT: They couldn't agree on the price for a very long time and it's still a so called "commercial secret". Why?

SG: As Mr. Miller found, and President Putin himself, the Chinese drive a very hard bargain and this is why this deal has been under negotiation for quite a long time, so this is not a really new thing that has suddenly appeared. The matter of price was really the big stumbling block that had to be resolved, it’s really one of the issues that have been kept under wraps because the Chinese have really tried to drive their negotiating position as hard as they could with Russia to get as favorable terms as obviously you would expect from the suspicion that they are getting about 350 dollars, which is quite a good price. That is what I mean by the commercial interest here. The timing was right for them to strike this deal. I think Russia wanted to have a deal to show the West that it can diversify away, so to this extent this is a political victory as well for Russia but it's not on perfect terms, I think they would prefer a higher price for the gas.

RT: Is it a win-win deal?

SG: There are areas of mutual interest between Russia and China that can be further explored. Those really fall among areas of energy policy, for example, and in some areas of foreign policy as well. If you look at the places like in the Middle East, for example, China has generally been not aggressively, but relatively supportive of Russian push-in, but there are areas where the Chinese leadership is quite pragmatic and they look at their commercial interests. And you must remember that they have extremely strong trade ties and financial ties not just with the US but with Europe as well. China is Europe’s second-largest export market, sometimes first-second between the US and China. So on issues like Ukraine which is obviously a very important issue right now China has really remained fairly neutral, they are playing an even game in this. On issues like political issues in the South China Sea, with Philippines and Vietnam and against Japan, in the regional Pacific rivalries, they would clearly like to have stronger ties with Russia to counter the US focus and President Obama's increased focus on the Pacific arena right now.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

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