What China wants from Putin

Russian Prime Minister Vladimir Putin left China Wednesday at the end of a two day visit trumpeting the two countries’ close political ties, but apparently only marginally closer to sealing a troublesome natural gas deal that could earn Moscow $1 trillion.

The Russian leader, keen to broaden his nation’s economic ties with China beyond energy supplies, signed away $7 billion in deals ranging from mining to space exploration. But Beijing’s key concern remained the stalled gas contract.

“China is one of the biggest energy consumers in the world and Russia has huge oil and gas reserves. We need each other,” says Li Xing, a Russia expert at Beijing Normal University.

The deal to provide China with 68 billion cubic meters of gas a year for 30 years, in the works since 2006, has foundered on price. Gazprom, the Russian gas company, wants the same price as it earns from customers in western Europe. China says that is too expensive.

“The market conditions are not the same in China,” says Chen Yurong, a researcher at the China Institute of International Studies, a Foreign Ministry sponsored think tank. “China can only import Russian gas at a price people can afford.”

Gazprom earns $350 per thousand cubic meters in Europe; China currently buys gas from Central Asian suppliers for around $200 per thousand cubic meters.

Mr. Putin, who recently announced his intention of reclaiming the Russian presidency next year, sought to interest his hosts in hi-tech cooperation, pressing particularly for joint efforts in the aviation field.

“If we want to get a solid share of the global market we need to join our efforts, for example, in designing and manufacturing wide-body passenger planes. We need to pool our financial and technological resources,” Putin told Chinese media Tuesday night.

Chinese airlines currently buy all their passenger jets from European and US manufacturers.

Putin and Chinese officials have stressed this week how well they understand each other on political issues. Beijing and Moscow are both wary of US global power and equally uncomfortable with western nations’ readiness to involve themselves in the politics of countries whose regimes they dislike.

The two governments joined forces earlier this month to veto a Western-sponsored United Nations Security Council resolution that would have opened the door to sanctions against Syria for the way its army has killed nearly 3,000 civilians in recent months.

The Russian leader’s visit this week has "moved forward the Sino-Russian comprehensive strategic relationship," Chinese president Hu Jintao said on Wednesday.