ON the sidelines of the 22nd Asia-Pacific Economic Conference (Apec) Leaders’ Meeting in Beijing, Chinese President Xi Jinping and Russian President Vladimir Putin sealed a new energy deal involving a pipeline that will deliver an additional 38 billion cubic meters of natural gas to China annually.
With an earlier energy agreement costing $400 billion, the deal will cumulatively secure up to one-fifth of China’s gas needs by 2020, according to Nomura Holdings estimates.
Both leaders also signed for China National Petroleum Corp.’s purchase of a 10-percent stake in a Siberian unit of Russia’s biggest oil company, Rosneft. The buy-in will help the company manage up to $1 billion of its skyrocketing debt.
These moves form part of Russia’s attempts to have deeper ties with China, making a very nice bargain. Russia will have access to a credit line for repaying its dollar debt in exchange for China gaining new energy-supply routes.
Such a Chinese-Russian partnership could develop into a formidable alternative to the US-led Trans-Pacific Partnership. At the Apec summit, Beijing resumed its calls for a Free Trade Area of the Asia-Pacific and announced a $40-billion infrastructure fund for projects across the region for its “21st Century Silk Road” plan—a proposed land and maritime trade route that runs through three continents.
A new Cold War?
The “icebreaker” meeting between Xi and Japanese Prime Minister Shinzo Abe was a more hopeful development, given that the territorial disputes in the East China Sea, particularly over the Senkaku/Diaoyu islands, were discussed.
With the meeting, the two sides have reportedly taken the initial steps toward reconciliation, like establishing a crisis-management mechanism. That signals a gradual resumption of political, diplomatic and security dialogues, echoing an earlier joint statement from the Chinese and Japanese foreign ministries.
On the other hand, President Aquino and Xi met briefly for the first time and exchanged cordial words over the West Philippine Sea (South China Sea) territorial dispute. President Aquino said their “meeting of minds” was marked by “warmth” and “sincerity,” suggesting a new tone and direction to the rhetoric over the dispute.
Based on these developments in Beijing, tensions appear to be easing over the disputes in the South and East China seas. All of Asia might very well achieve its potential to become the global economy’s growth driver.
E-mail: angara.ed@gmail.com.