President Vladimir Putin met Tuesday with China’s president in a diplomatic boost for the isolated Russian leader but the two sides had yet to agree on a widely anticipated multibillion-dollar natural gas sale.
Putin, shunned by the West over Ukraine, met with Chinese President Xi Jinping at a start of a two-day meeting on Asian security with leaders from Iran and Central Asia. The Russian leader is hoping to extend his country’s dealings with Asia and diversify markets for its gas, which now goes mostly to Europe.
Russia has been negotiating for more than a decade on a proposed 30-year deal to supply gas to China. Officials said they hoped to complete work in time to sign a contract while Putin is in Shanghai. But Putin’s spokesman, Dmitry Peskov, said Tuesday it wasn’t finalized.
“Significant progress has been reached on gas, but there are issues that need to be finalized regarding the price,” Peskov said, according to Russian news agencies. He said a contract could be signed “at any moment.”
A deal would give Moscow an economic and political boost at a time of Western sanctions, while pressure on Moscow is thought to give Beijing leverage to push for a lower price.
The U.S. treasury secretary, Jacob Lew, appealed to China during a visit last week to avoid taking steps that might offset sanctions. However, American officials have acknowledged China’s pressing need for energy.
In a joint statement, Putin and Xi urged Ukrainians to start “broad nationwide talks” on ending their country’s crisis. Russia has been pressing for such talks and they are an element of a peace plan proposed by European mediators. The Ukrainian government has refused to invite separatist rebels in the country’s east to participate.
The statement appealed for global rules to limit use of computer technology to hurt state sovereignty, a reference to efforts to curb the spread of online opposition to authoritarian governments. Beijing tries to block material that criticizes one-party rule, while Moscow has tightened controls. An official said last week Russia might block access to Twitter.
Putin and Xi attended the signing of 49 cooperation deals in fields including energy, transport and infrastructure, but no details were given at the ceremony.
The price of gas is the sticking point in the proposed agreement between Russia’s government-controlled Gazprom and state-owned China National Petroleum Corp.
A deal looked more likely after Washington and the European Union imposed asset freezes and visa bans on dozens of Russian officials and several companies.
The deal to pipe Siberian gas to China’s northeast would help Russia diversify export routes away from Europe. It would help to ease Chinese gas shortages and heavy reliance on coal.
Putin told Chinese reporters ahead of his visit that China-Russia cooperation had reached an all-time high.
“China is our reliable friend. To expand cooperation with China is undoubtedly Russia’s diplomatic priority,” Putin said, according to the official Xinhua News Agency.
Xi and Putin were scheduled to kick off a joint exercise between their two navies in the northern part of the East China Sea.
The two countries developed a strategic partnership after the 1991 Soviet collapse, including close political, economic and military ties in a shared aspiration to counter U.S. influence, especially in Central Asia.
A tentative agreement signed in March 2013 calls for Gazprom to deliver 38 billion cubic meters of gas per year beginning in 2018, with an option to increase that to 60 billion cubic meters.
Plans call for building a pipeline to link China’s northeast to a line that carries gas from western Siberia to the Pacific port of Vladivostok.
A gas deal would mean China would be in a “de facto alliance with Russia,” said Vasily Kashin, a China expert at the Center for Analysis of Strategies and Technologies in Moscow.
In exchange, Moscow might lift restrictions on Chinese investment in Russia and on exports of military technology, Kashin said in an email.
“In the more distant future, full military alliance cannot be excluded,” Kashin said.
“It will, however, take years for China to start playing in the Russian economy a role comparable to that of the EU,” he said. “After that happens, both China and Russia will be much less vulnerable to any potential Western pressure and that, of course, will affect the foreign policy of both these countries.”
In a joint statement after their talks, Putin and Xi said the two sides voiced serious concerns over the political crisis in Ukraine, and urged Ukrainian regions, people and political groups to start “broad nationwide talks,” according to Russian state news agency ITAR-Tass. Their statement also said that any external attempts to forcibly interfere in Syria would be unacceptable.
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