De-dollarization, check. Military security, check. Energy security, check!
While the United States is busy isolating itself from the rest of the world, China and Russia have taken the opportunity to secure an important set of goals that have been coming for a long time.
Both Asian giants have not only managed to negotiate the de-dollarization of their economies, but now, they have also secured their energy resources and trade while demonstrating that together or even perhaps separately, they are the alternative to the unipolar world that the United States has led for the past 60 years.
Russia’s Gazprom and the National Petroleum Corporation of China (CNPC) finally signed Wednesday an agreement to export natural gas from Russia to China. During this week, the Chinese pressed for a better price on the fuel supply in a visit by Russian President Vladimir Putin to Shanghai.
After nearly a decade of negotiations between the two powers, the agreement was signed on Wednesday in a ceremony attended by President Putin and his Chinese counterpart, Xi Jinping. In doing so, both the Chinese and Russian governments have made the United States that much obsolete if you add the fact that they won’t need that many dollars to continue this and other commercial partnerships.
Although the terms of the agreement have not yet been detailed to the public, it is estimated that the Asian giant will receive, beginning in 2018 and for the next 30 years, 38,000 million cubic meters of natural gas a year, almost a quarter of the current consumption of the People’s Republic in around – a total of 170,000 million — through a pipeline linking the two countries in the East Asian region.
The contract strengthens Russia to diversify its exports to its Asian neighbor when faced with economic sanctions by the U.S. and the European Union for its role in the Ukrainian crisis.
In his first visit to China under President Xi Jinping, the Russian head of state, Vladimir Putin, has had a muscular welcome. The Russian Army and the Chinese People’s Liberation Army (PLA) held military exercises in Chinese waters on Tuesday.
Shanghai is the city where both leaders will participate in a forum on security and cooperation in Asia and a bilateral meeting to sign thirty documents that will strengthen the pragmatic between the two nations.
While leaders come to the meeting of the Conference on Interaction and Confidence Building Measures in Asia (CICA) held in Shanghai in the East China Sea, the naval forces of China and Russia have prepared joint maneuvers to be held from Tuesday until next Monday with the intent to highlight their growing level of cooperation.
According to official Chinese media, there are 14 surface ships, two submarines, nine warplanes, six helicopters and elite forces participating in these exercises. They include some of the most iconic ships of the Chinese PLA, such as missile destroyers Zhengzhou and Ningbo.
This time will be the first time that the warships of both nations are mixed, as declared on Sunday by the “Number Two” of the General Staff of the Chinese Defense, Tian Zhong.
Both countries develop joint exercises regularly, and starting Tuesday they will carry out the third in as many years, following those held in the Yellow Sea in 2012 and a previous one conducted in Eastern Russia near the port of Vladivostok. These were, by then said the official Chinese news agency Xinhua, the largest in which China has participated with other states.
According to Tian, they now seek to improve practical cooperation between the two armed forces and facilitate a coordinated response to common threats.
Both Xi and Putin want to make clear that the relationship between their two countries going is through a great moment, just when the bonds of both countries with what used to be the great world power, the United States, is not going through its best phase.
Just hours before the bilateral meeting, Beijing and Washington were fighting about a U.S. Justice Department announcement that a grand jury has filed charges against five Chinese military members in a cyber espionage case.
The events in Shanghai also intend to convey a message of power to the international community, to make clear that there are alternatives to Washington and its famous pivot to Asia – Pacific.
“China now has more confidence,” said Professor Wang Yiwei, from the School of International Relations at Renmin University in Beijing.
Among other things, Beijing is aware that Russia needs to find a buyer for its natural gas, due to the deterioration of relations with the European Union following the Ukrainian crisis. It may, therefore, require a more advantageous price for signing a purchase agreement with Russia than the one it was getting a decade ago. China “does not need to follow the steps of Putin,” says Wang.
On the table in the meeting between the two leaders there are other agreements. The business relationship is still far from its potential. Last year, their commercial partnerships accounted for around $90 billion, less than a third of China’s exchange with the United States and only one fifth of the People’s Republic commercial relation with the European Union.
The goal is to raise the $90 billion to $100 billion for next year and double that figure by 2020. In order to achieve that goal, Russian and China may include an agreement for the sale of Russian arms to its Asian neighbor. Putin also wants China to enter into the Russian Far East as an investor.
Have you seen China benefit of the Ukrainian crisis? Surely, Wang admits. A Chinese “does not like the crisis at all. But when they happen, China likes to make the best of them. Internally or externally, the country takes advantage of them.”