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Russia and China sign major natural gas deal

Xi Jinping, left, and Vladimir Putin, right, celebrate the signing of a natural gas deal.
Xi Jinping, left, and Vladimir Putin, right, celebrate the signing of a natural gas deal.
Itar-Tass/Zuma Press,

Russian President Vladimir Putin and Chinese President Xi Jinping sealed a natural gas deal today after 10 years of negotiation between their two countries. Valued at $400 billion over the next 30 years, the agreement will increase Russia’s gas exports by 25% and propel China to become the second largest market for Russian fuel, behind Germany. China will help Russia finance construction of a pipeline between the two countries, and in return Russia discounted the price of fuel.

"This will be the biggest construction project in the world for the next four years, without exaggeration," Putin said, also calling the signing of the deal an “epochal” event.

As the United States and Europe pile sanctions on Russia for its actions in Ukraine, Moscow has been forced to look elsewhere for energy markets. With China seeking new energy sources to support its mammoth economy — and battling debilitating pollution caused by countless coal-burning power plants — the Russians found a ready buyer in their neighbor to the south. Much more than a convenient solution or an environmental salve, however, the natural gas deal is a deliberate means of economically uniting China and Russia when both powers are peeved with the West.

But why cement a deal of this magnitude when China usually favors incrementalism? And why do so now, when both nations have dragged their feet on signing it for the past decade? The leaders of both China and Russia are nothing if not pragmatic, and this energy deal is the perfect opportunity for increased cooperation between the two. With a shared border, shared ideology and shared disregard for Western nations, it makes sense for these countries to gravitate towards each other, especially when there’s room for mutual gain.

But beyond convenience, the timing is right. Putin has recently proven by his actions in Syria and Eastern Europe that he is fully aware of the international balance of power and Russia’s place in it, and he clearly isn’t afraid to make moves. China, in turn, naturally feels indignant towards the United States for its increased presence in Asia as of late. Not to mention, the world’s second largest economy has spent the past 48 hours name-calling the US for indicting five alleged Chinese cyber spies. By pledging to cooperate on an energy deal of this size, not only do China and Russia guarantee themselves a bit of highly valued economic security, but they also show that the US isn’t the only one who can build formidable coalitions amongst allies.

"The 30-year gas contract with China is of strategic significance,” wrote Alexei Pushkov, a senior Russian parliamentarian from the ruling United Russia party, on his Twitter account. “B. Obama should give up his policy of isolating Russia: It won't work."

Russia’s promise to deliver natural gas to China over the next 30 years may end up helping with Beijing’s pollution problem, and that in and of itself is a worthy goal. But as this decrease in pollution leads to increased global polarization, relations between East and West will create new toxic clouds that know no boundaries.

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