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China-Russia Strategic Partnership: News and Analyses

Russia & China sign $10bn investment fund to ease ruble-yuan settlements

The Russian Direct Investment Fund and the China Development Bank (CDB) have agreed to establish a Russian-Chinese investment fund worth 68 billion yuan ($10 billion).

The agreement was signed at a meeting between Russian President Vladimir Putin and Chinese President Xi Jinping, who is in Russia on an official visit.

The new fund, to be called the Russia-China RMB Cooperation Fund, was created to make settlements in ruble and yuan. Both Moscow and Beijing have repeatedly talked about the importance of payments in local currencies for bilateral trade.

The money will be used on infrastructure projects in Russia and China. Particularly to projects linked to One Belt One Road (the 21st-century Maritime Silk Road) scheme and the Eurasian Economic Union.

"The Russian-Chinese investment cooperation fund in yuan will be a major stage in China-Russia investment partnership, supported by the governments of both countries, which will stimulate the growth of direct investment between the countries and promote a significant increase in the number of Russian-Chinese projects," said CDB Chairman Hu Huaibang.

"We are pleased to announce a partnership with the China Development Bank and provide an opportunity for Chinese investors to invest in their national currency.
It will give a powerful impetus to increase the volume of cross-border direct investment and significantly increase the number of jointly implemented projects," said Russian Direct Investment Fund chief Kirill Dmitriev.

***

Russia to supply China with gas by end-2019


Russia will start supplying gas to China through a new pipeline by the end of 2019, state gas giant Gazprom said Tuesday, as part of a mammoth $400-billion deal.

"Today a deal was signed...about the date of the start of gas deliveries through the 'Power of Siberia' pipeline. It is December 20, 2019," Gazprom boss Alexei Miller told journalists.

After a decade of negotiations, Russia inked a mammoth 30-year deal in May 2014 to supply its key eastern neighbor with natural gas through a pipeline for the first time.

Construction began in September 2014 on the 4,000-kilometre (2,500-mile) "Power of Siberia" pipeline to connect Yakutia's gas fields with the Sea of Japan (East Sea) and also with the Chinese border.

Miller said that the project was now moving into a "key phase" and was being carried out "strictly on schedule", adding that he had "no doubts" the 2019 delivery deadline would be met.


The agreement Tuesday between Gazprom and the China National Petroleum Corporation came as part of a visit to Moscow by Chinese leader Xi Jinping.

Moscow and Beijing have ratcheted up trade and cooperation in recent years as the Kremlin has increasingly looked east after its ties with the West collapsed over the Ukraine crisis.

(Source: AFP)

***

Also, Mr Xi was awarded with the highest state order of the Russian Federation - Order of St. Andrew.





 
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MOSCOW - Chinese President Xi Jinping is meeting with Russia’s President Vladimir Putin for talks on boosting ties between the two allies.

Xi’s visit comes amid a flare-up of tensions in U.S.-China ties and an anxiety caused by North Korea’s missile launch. The missile flew higher and farther than those previously tested.

Welcoming Xi Tuesday, Putin said they would focus on economic and international issues.

Before arriving in Moscow Monday, Xi warned President Donald Trump that “some negative factors” are hurting U.S.-China relations, as tensions soared over a U.S. destroyer sailing within the territorial seas limit of a Chinese-claimed island in the South China Sea.

Trump, Putin and Xi will attend the Group of 20 summit in Germany later this week. Putin and Trump are to hold their first meeting there.

https://www.usatoday.com/story/news/world/2017/07/04/chinas-russia-talks/449565001/
 
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China has agreed to fund investments in Russia worth billions of dollars, helping Moscow bypass Western sanctions.
The deals were struck during a visit to Russia this week by Chinese President Xi Jinping.


China Development Bank and the Russian Direct Investment Fund (RDIF), a sovereign wealth fund which invests in infrastructure, energy, industry and other sectors, said they would create a joint investment fund worth 68 billion yuan ($10 billion). The money will finance infrastructure and development projects.



VEB, Russia's state development bank, also signed a deal with China Development Bank for a new 15-year loan worth 50 billion rubles ($850 million) to set up a new innovation fund.

RDIF and VEB are subject to U.S. sanctions imposed on Russia over its involvement in the Ukraine conflict. They are barred from raising long term finance in the U.S. VEB is also under sanctions by the European Union.

"Because they are subject to U.S. and EU sanctions, they are cut off from Western capital," said Sean Kane, counsel at Hughes Hubbard and a former deputy Assistant Director for Policy in the Office of Foreign Assets Control in the U.S. Department of the Treasury.

"That was the purpose of these sanctions, to cut these entities off long term financing in the U.S. and EU," added Kane, who was involved in the development and implementation of the Russia sanctions program.


The White House did not respond to CNNMoney's request for comment.

Related: How Russia and China are bonding against the U.S.

Russia has been keen to attract more investment from China ever since sanctions were imposed in 2014, and oil prices collapsed.

But Moscow so far has little to show for its efforts. Russia did sign a 30-year deal in 2014 to supply natural gas to China, worth an estimated $400 billion.

China had refused to sign the gas deal for several years, unhappy with the price Russia was asking. The financial details of that deal have not been released, but analysts have said it was likely favorable to China.

"Everyone knew the Russians could go to China for financing," said Kane, pointing to the gas deal. "China can, and has, extracted a pretty high price for these deals."

"I would not be surprised if China got a very good deal here," Kane added, referring to this week's investment agreements.

The new investment funds will be set up in Russia and China's own currencies, rather than dollars or euros, putting them way beyond the reach of the U.S. and European sanctions regimes.

Western sanctions against Russia do not apply to China.

Related: Putin meets Xi: Two economies, only one to envy

The actual investment, equivalent to nearly $11 billion, is tiny in the context of China's ambitious One Belt One Road initiative, a trillion-dollar plan that spans about 65 countries and 4.4 billion people, according to PwC.

Under the Belt Road plan, China will pour money into railroads, highways and other projects in former Soviet states such as Kazakhstan and Uzbekistan.

But this week's deals with China are politically important for Russian President Vladimir Putin.

"Russia certainly has vested interest in publicizing these deals. It is very important to President Putin to show that Russia is not cut off the world," Kane said.

"It's also a way to reinforce the message that these sanctions are not working -- because Russia can get financing elsewhere."

http://money.cnn.com/2017/07/06/new...+rss%2Fmoney_latest+(CNNMoney%3A+Latest+News)
 
Russia-China Alliance Is Real - and the US is the Big Loser
Ray McGovern
Fri, Jul 7, 2017 |


The friendship goes way back

Top Russian and Chinese leaders are busy comparing notes, coordinating their approach to President Donald Trump at the G20 summit in Hamburg this weekend. Both sides are heralding the degree to which ties between the two countries have improved in recent years, as Chinese President Xi Jinping’s visits Moscow on his way to the G20. And, they are not just blowing smoke; there is ample substance behind the rhetoric.

Whether or not Official Washington fully appreciates the gradual – but profound – change in America’s triangular relationship with Russia and China over recent decades, what is clear is that the U.S. has made itself into the big loser.

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Gone are the days when Richard Nixon and Henry Kissinger skillfully took advantage of the Sino-Soviet rivalry and played the two countries off against each other, extracting concessions from each. Slowly but surely, the strategic equation has markedly changed – and the Sino-Russian rapprochement signals a tectonic shift to Washington’s distinct detriment, a change largely due to U.S. actions that have pushed the two countries closer together.

But there is little sign that today’s U.S. policymakers have enough experience and intelligence to recognize this new reality and understand the important implications for U.S. freedom of action. Still less are they likely to appreciate how this new nexus may play out on the ground, on the sea or in the air.

Instead, the Trump administration – following along the same lines as the Bush-43 and Obama administrations – is behaving with arrogance and a sense of entitlement, firing missiles into Syria and shooting down Syrian planes, blustering over Ukraine, and dispatching naval forces to the waters near China.

But consider this: it may soon be possible to foresee a Chinese challenge to “U.S. interests” in the South China Sea or even the Taiwan Strait in tandem with a U.S.-Russian clash in the skies over Syria or a showdown in Ukraine.

A lack of experience or intelligence, though, may be too generous an interpretation. More likely, Washington’s behavior stems from a mix of the customary, naïve exceptionalism and the enduring power of the U.S. arms lobby, the Pentagon, and the other deep-state actors – all determined to thwart any lessening of tensions with either Russia or China. After all, stirring up fear of Russia and China is a tried-and-true method for ensuring that the next aircraft carrier or other pricey weapons system gets built.

It’s almost like the old days when the U.S. military budgeted to fight wars on multiple fronts simultaneously. Recent weeks saw the following:

–The guided-missile destroyer USS Stethem on Sunday sailed within 12 nautical miles of the Chinese-claimed Triton Island in the Paracels in the South China Sea. The Chinese Foreign Ministry immediately branded this “a serious political and military provocation.”

–The U.S. last week announced a $1.4 billion arms sale to Taiwan, placed sanctions on a Chinese bank for its dealings with North Korea, and labeled China the world’s worst human trafficker.

–On June 20, President Donald Trump sent off a condescending tweet intimating that, at his request, China had tried but failed to help restrain North Korea’s nuclear program: “It has not worked out. At least I know China tried.” (Over the centuries, the Chinese have had bad experience with Western condescension.)

Common Concern: Missile Defense

On the eve of his arrival in Moscow, Xi gave an interview to Russia’s TASS news agency, in which he focused on missile defense – an issue particularly close to Vladimir Putin’s heart. Xi focused on U.S. deployment of Terminal High Altitude Area Defense (THAAD) missiles to South Korea as “disrupting the strategic balance in the region” and threatening the security interests of all countries in the region, including Russia and China.

Xi also reiterated that Beijing is urging Washington and Seoul to back off military pressure on North Korea, and he may even hope that South Korea’s new President will react more sensibly than his predecessor who authorized THAAD deployment, which has made the North even more nervous about a possible preemptive strike. [In a seminar on the Web in February, Professor J. J. Suh and I discussed THAAD in the historical perspective of missile defense systems.]

Less than a month ago, Putin and Xi met in Kazakhstan’s capital, Astana, on the sidelines of a Shanghai Cooperation Organization summit. At that time, Putin predicted that the bilateral meeting now under way in Moscow would be “a major event in bilateral relations.”

The Russian leader added, “By tradition, we use every opportunity to meet and to discuss bilateral relations and the international agenda.”

If Sino-Russian “tradition” is meant to describe relations further back than three decades ago, Putin exaggerates. It was not always so. A half-century retrospective on the vicissitudes of Russia-Chinese relations illustrates the difficult path they have taken. More important, it suggests their current closeness is not likely to evaporate any time soon.

Like subterranean geological plates shifting slowly below the surface, changes with immense political repercussions can occur so gradually as to be imperceptible until the earthquake. As CIA’s principal Soviet analyst on Sino-Soviet relations in the 1960s and early 1970s, I had a catbird seat watching sign after sign of intense hostility between Russia and China, and how, eventually, Nixon and Kissinger were able to exploit it to Washington’s advantage.

The grievances between the two Asian neighbors included irredentism: China claimed 1.5 million square kilometers of Siberia taken from China under what it called “unequal treaties” dating back to 1689. This had led to armed clashes during the 1960s and 1970s along the long riverine border where islands were claimed by both sides.

In the late 1960s, Russia reinforced its ground forces near China from 13 to 21 divisions. By 1971, the number had grown to 44 divisions, and Chinese leaders began to see Russia as a more immediate threat to them than the U.S., which had fought Chinese troops during the Korean War in the 1950s and refused to recognize the country’s communist leadership diplomatically, maintaining the fiction that Chiang Kai-shek’s Nationalists on Taiwan remained the legitimate government of China.

Enter Henry Kissinger, who visited Beijing in 1971 to arrange the precedent-breaking visit by President Richard Nixon the next year. What followed was some highly imaginative diplomacy orchestrated by Kissinger and Nixon to exploit the mutual fear China and the USSR held for each other and the imperative each saw to compete for improved ties with Washington.

Triangular Diplomacy

Washington’s adroit exploitation of its relatively strong position in the triangular relationship helped facilitate major, verifiable arms control agreements between the U.S. and USSR and the Four Power Agreement on Berlin. The USSR even went so far as to blame China for impeding a peaceful solution in Vietnam.

It was one of those felicitous junctures at which CIA analysts could jettison the skunk-at-the-picnic attitude we were often forced to adopt. Rather, we could in good conscience chronicle the effects of the U.S. approach and conclude that it was having the desired effect. Because it was.

Hostility between Beijing and Moscow was abundantly clear. In early 1972, between President Nixon’s first summits in Beijing and Moscow, our analytic reports underscored the reality that Sino-Soviet rivalry was, to both sides, a highly debilitating phenomenon.

Not only had the two countries forfeited the benefits of cooperation, but each felt compelled to devote huge effort to negate the policies of the other. A significant dimension had been added to this rivalry as the U.S. moved to cultivate better relations simultaneously with both. The two saw themselves in a crucial race to cultivate good relations with the U.S.

The Soviet and Chinese leaders could not fail to notice how all this had increased the U.S. bargaining position. But we CIA analysts saw them as cemented into an intractable adversarial relationship by a deeply felt set of emotional beliefs, in which national, ideological, and racial factors reinforced one another. Although the two countries recognized the price they were paying, neither seemed able to see a way out. The only prospect for improvement, we suggested, was the hope that more sensible leaders would emerge in each country. But this seemed an illusory expectation at the time.

We were wrong about that. Mao Zedong’s and Nikita Khrushchev’s successors proved to have cooler heads. The U.S., under President Jimmy Carter, finally recognized the communist government of China in 1979 and the dynamics of the triangular relationships among the U.S., China and the Soviet Union gradually shifted with tensions between Beijing and Moscow lessening.

Yes, it took years to chip away at the heavily encrusted mistrust between the two countries, but by the mid-1980s, we analysts were warning policymakers that “normalization” of relations between Moscow and Beijing had already occurred slowly but surely, despite continued Chinese protestations that such would be impossible unless the Russians capitulated to all China’s conditions. For their part, the Soviet leaders had become more comfortable operating in the triangular environment and were no longer suffering the debilitating effects of a headlong race with China to develop better relations with Washington.

A New Reality

Still, little did we dream back then that as early as October 2004 Russian President Putin would visit Beijing to finalize an agreement on border issues and brag that relations had reached “unparalleled heights.” He also signed an agreement to jointly develop Russian energy reserves.

A revitalized Russia and a modernizing China began to represent a potential counterweight to U.S. hegemony as the world’s unilateral superpower, a reaction that Washington accelerated with its strategic maneuvers to surround both Russia and China with military bases and adversarial alliances by pressing NATO up to Russia’s borders and President Obama’s “pivot to Asia.”

The U.S.-backed coup in Ukraine on Feb. 22, 2014, marked a historical breaking point as Russia finally pushed back by approving Crimea’s request for reunification and by giving assistance to ethnic Russian rebels in eastern Ukraine who resisted the coup regime in Kiev.

On the global stage, Putin fleshed out the earlier energy deal with China, including a massive 30-year natural gas contract valued at $400 billion. The move helped Putin demonstrate that the West’s post-Ukraine economic sanctions posed little threat to Russia’s financial survival.

As the Russia-China relationship grew closer, the two countries also adopted remarkably congruent positions on international hot spots, including Ukraine and Syria. Military cooperation also increased steadily. Yet, a hubris-tinged consensus in the U.S. government and academe continues to hold that, despite the marked improvement in ties between China and Russia, each retains greater interest in developing good relations with the U.S. than with each other.

The sports slogan has it that nothing is over “until the fat lady sings,” but on this topic, her tones are quite clear. The day of the U.S. playing China and Russia off against each other is no more.

One perhaps can hope that someone in the U.S. government will inform President Trump that his Russian and Chinese counterparts are singing from essentially the same songbook, the unintended result of arrogant miscalculations by his immediate predecessors. Implications for U.S. national security are enormous.


Ray McGovern was an Army officer and CIA analyst for almost 30 year. He now serves on the Steering Group of Veteran Intelligence Professionals for Sanity. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). He can be reached at: rrmcgovern@gmail.com. A version of this article first appeared on Consortiumnews.com.

http://russia-insider.com/en/politics/russia-china-alliance-real-and-us-big-loser/ri20305




@cirr , @DayWalker90 , @vostok , @Nevsky , @AndrewJin , @Jlaw , @terranMarine
 
Cooperation on every possible level.:yahoo:

Russia and China to Produce First Ever Joint Animation TV Series


Russia's Riki, the producer of animation franchise 'Kikoriki,' and China's CCTV team up to make 'Krosh and Panda.'
Producers of the Russian animation franchise Kikoriki are teaming up with China’s CCTV Animation to produce the first ever Russian-Chinese animation series.

Krosh and Panda, a children's animated series with two main characters, a panda and a rabbit, will become the first project implemented under a recent intergovernmental agreement on film production between Russia and China, Riki, the production company for Kikoriki, said in a press release.

"The project aims to combine the most popular animated characters amongst children and family audiences in Russia and China and can become a symbol of development and strengthening of collaboration in art and culture between the two countries, also attracting interest of wide viewership both in Russia and China," the company added.

Under a signed agreement, Riki and CCTV Animation plan to produce 12 52-minute episodes of Krosh and Panda in 3D CGI format over the next 18 months. All work on the project will be implemented jointly by the Russian and Chinese sides.

Launched in 2003, the Kikoriki franchise, known in Russia as Smeshariki, has been adapted in half a dozen countries, including the U.S., Germany and the U.K.

In September 2016, Los Angeles-based Shout! Factory picked up North American distribution rights to the franchise.
 
Cooperation on every possible level.:yahoo:

Russia and China to Produce First Ever Joint Animation TV Series

Russia's Riki, the producer of animation franchise 'Kikoriki,' and China's CCTV team up to make 'Krosh and Panda.'
Producers of the Russian animation franchise Kikoriki are teaming up with China’s CCTV Animation to produce the first ever Russian-Chinese animation series.

Krosh and Panda, a children's animated series with two main characters, a panda and a rabbit, will become the first project implemented under a recent intergovernmental agreement on film production between Russia and China, Riki, the production company for Kikoriki, said in a press release.

"The project aims to combine the most popular animated characters amongst children and family audiences in Russia and China and can become a symbol of development and strengthening of collaboration in art and culture between the two countries, also attracting interest of wide viewership both in Russia and China," the company added.

Under a signed agreement, Riki and CCTV Animation plan to produce 12 52-minute episodes of Krosh and Panda in 3D CGI format over the next 18 months. All work on the project will be implemented jointly by the Russian and Chinese sides.

Launched in 2003, the Kikoriki franchise, known in Russia as Smeshariki, has been adapted in half a dozen countries, including the U.S., Germany and the U.K.

In September 2016, Los Angeles-based Shout! Factory picked up North American distribution rights to the franchise.

Cooperation with Russia will be a win-win for both nations, Animation is a good cultural exchange, the more cultural exchange between two nations will only bring our people closer each other as well as economy:D.
 
Road bridge linking NE China and Russia under construction

Photo taken on Aug. 10, 2017 shows the construction site of a road bridge over Heilongjiang River at the border of China and Russia. The road bridge linking Heihe of northeast China's Heilongjiang Province and the Russian city of Blagoveshchensk is scheduled to open to traffic in 2019. (Xinhua/Wang Jianwei)

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http://china.org.cn/photos/2017-08/11/content_41391902_4.htm
 
Russian experts confident China-Russia trade to reach 80 bln USD in 2017
Source: Xinhua| 2017-08-11 23:32:32|Editor: Yurou



MOSCOW, Aug. 11 (Xinhua) -- Growth of two-way trade between China and Russia has been picking up speed, and is most likely to reach the previously set goal of 80 billion U.S. dollars this year, Russian experts have said.

"Considering the seasonality, reaching 80 billion dollars is quite possible, especially if we take into account the fact that metal prices have increased very much in the last month, including in anticipation of a decline in Chinese output and closure of ecologically harmful and surplus production capacities," Alexander Gabuyev, head of the Russia in the Asian-Pacific program at the Carnegie Moscow Center, told Xinhua in a recent interview.

According to China's General Administration of Customs, the import and export turnover between Russia and China in January-July 2017 amounted to 46.82 billion dollars, an increase of 21.8 percent year-on-year.

"Given the importance of raw materials in Russian exports, and if oil prices stay at the current level and metal prices remain high, then 80 billion will be achieved by the end of the year," Gabuyev said.

Meanwhile, statistics show that Russia's non-resource exports to China are also growing, which in Gabuyev's opinion should be attributed to the cheap ruble and joint efforts of both governments to eliminate tariff barriers and improve infrastructure in order to promote the trade of food products.

"Russia has significantly increased the supply of food products to China, and the assortment is gradually expanding," managing director of the International Trade Promotion division of the Russian Export Center (REC) Mikhail Mamonov said, specifying that Russian confectionery, mineral water and vegetable oil are especially popular with Chinese consumers.

Currently, Russia's main export items to China include hydrocarbons, timber and timber products, mechanical equipment and machinery, while exports of such goods as lumber, nuclear reactor equipment, turbojet engines, electric equipment and many others are also actively growing, according to the REC.

"The main reasons for such positive dynamics are the gradual recovery of world trade, as well as increased cooperation between Russia and China," Mamonov said.

He said it could well be expected that China and Russia are able to hit the trade target by the end of the year, given the fact that the two sides have achieved almost 40 billion dollars in trade in the first half of this year.

Vitaly Monkevich, president of the Russian-Asian Union of Industrialists and Entrepreneurs, also sees great possibility of reaching the bilateral trade goal this year, highlighting the recovery of the economy, the near target-level inflation and recovery of demand in the world commodity market.

Mentioning that the third quarter of each year is usually strong in trade and economic relations, he said the two countries could well reach the commodity turnover of 80 billion dollars by the end of 2017 if current trends in commodity and currency markets are maintained.

Calling the goal of lifting China-Russia trade volume to 200 billion dollars by the year of 2020 "a complex and ambitious task," Monkevich said it is still likely to be achieved if joint investment projects are implemented along with China's Belt and Road Initiative and restrictions on agricultural products imports are lifted.

"Also, the growth of trade could be also stimulated by a significant acceleration of economic growth in the Russian Federation and the maintenance of the current growth rates of the Chinese economy," Monkevich said.

Compared to keeping in mind any specific figure, Gabuyev said that it is more important to first take measures to simplify terms of trade to facilitate the cross-border delivery of products, such as removing tariff barriers and setting up a free trade zone.
 
and Russia
Sanctions have pushed Russia towards China, increasing the economic linkages between the countries and increasing Russian cooperation with China's massive New Silk Road

David James
Wed, Aug 23, 2017 | 3510 87

The anti-Russian frenzy in the United States amounts to little more than a great deal of evidence that the intelligence community suspects there might be a great deal of evidence that the Russians have been meddling. It has to rank as one of the biggest, and most orchestrated, blind alleys of modern media coverage. When a journalist says an anonymous ‘respected source’ thinks the Russians are up to something, this writer is always left wondering: respected by whom? His dog?

In truth, it is just journalistic code for ‘I know this person is selling me a line, but, hey, it sells papers.’ Little wonder that no-one is terribly interested in looking at information that might actually help, such as the Democratic National Congress (DNC) servers or talking to the former British ambassador who said he passed the file on to Julian Assange and that it definitely did not come from a state source. Never let the facts get in the way of a good nationalistic furore.

Just how much the anti-Russian phobia has gripped America was graphically demonstrated when the Congress, in an almost unanimous vote, imposed even more extreme sanctions on Russia. This was highly significant, because, in effect, it sounded the death knell for the ethic of open, world trade that has been an article of faith in the globalization push of the last quarter of a century.

We are now facing what is likely to look much more like a bi-polar world, with America on one side and much of Eurasia, especially China, on the other. Where Europe will head is yet to be decided.

To get an insight into what America has done, it is worth watching this exchange between a BBC journalist and Vladimir Putin. The Russian president points out that it took Russia 19 years to join the World Trade Organisation (WTO). The sanctions, he protests, are against both the rules of the WTO and international law.

And that is the point. The WTO is supposed to supervene national interests in matters of trade, and this has been thrown away by America’s politicians—with sanctimonious gusto.

It has put Europe, especially Germany, into an invidious position. Any EU company doing business with Russia may find itself being attacked by America and hit by lawsuits or fines. In the short term it will affect companies involved in financing Nord Stream 2, a pipeline intended to provide Germany with much needed natural gas from Russia. The Germans, unsurprisingly, are furious.

In effect, what America is saying is: ‘We believe in world trade provided you follow our laws only—and that we always win.’ It is not a new attitude. In 2014 the French bank BNP-Paribas copped a fine of $US9 billion from American interests for transactions that were legal under French law.

Last October, Deutsche Bank was threatened with a fine of $US14 billion, which would have crippled the bank. It would probably have brought down the whole European banking system, making the Greece crisis look like small change.
How, then, do the sides line up in what is looming as a war of economic power? America certainly has the advantage. It has the world’s reserve currency (because over $US4 trillion is transacted per day in the dollar) and it controls SWIFT, the international mechanism for international financial transfers. So it can certainly boss the banks around.

But China has to an extent neutered this advantage by fixing its currency, the yuan, to the US dollar, accumulating a large amount of US Treasury bills, purchasing gold, especially for use in Hong Kong where it makes the yuan more transferable (especially for the Russians) and developing its own payment system, CIPS.

China also has a sizable portion of America’s industry base on its territory, making trade wars somewhat self defeating. About half of the so-called trade deficit is actually shipments inside American companies' supply chains.

The country’s approach has been astute. It knew that it would become a continental economy, like America. Because of its size, trade can in the end only be a small portion of the economy—unlike mercantile Japan or Korea, which both traded their way to success. Instead, China opened itself up to a massive knowledge transfer with a view to boosting its domestic economy. It has worked spectacularly.

The sanctions have pushed Russia towards China, increasing the economic linkages between the countries and increasing Russian cooperation with China's massive New Silk Road (One Belt, One Road) infrastructure initiative, which will span all of Eurasia and extend to North Africa and much of South East Asia.

Russia-Insider.
 
China Takes Over Minority Share of Russia's State-Owned Oil Giant From Qatar

Quatar, under siege by Saudi Arabia, has sold its share in Rosneft to China ushering in a stronger Russian-Chinese oil alliance

Tom Luongo
Mon, Sep 18, 2017 |



  • Glencore and Qatari Investment Authority draw down their stake in Rosneft.
  • Why did China so obviously overpay?
  • A quid pro quo and a statement to the Saudis about the future of oil pricing.

Glencore (OTCPK:GLNCY) and the Qatari Investment Authority are selling the stake in Russian oil major Rosneft (OTCPK:RNFTF) to a small, mostly state-owned Chinese firm, CEFC China Energy Co., for $9 billion. This deal creates a lot of questions while also answering a few others. The equally owned joint venture between QIA and Glencore will divest themselves of most of the stake in Rosneft with Glencore retaining 0.5% and QIA 4.7%. CEFC gets the remaining 14.6% of the Russian oil giant.

Also, Glencore retains its 220,000 barrel per day offtake agreement with Rosneft. The terms of the deal were misreported by Zerohedge as QIA and Glencore taking a 25% hit on the value of the stake they bought only this past December. But that $12 billion deal's value is still in effect here with CEFC buying 75% of the stake for $9 billion.

Qatari Questions

So, the question is why is QIA selling this stake in Rosneft now? Fellow SA contributor Craig Pirro only looked at this deal from what Russia gets out of it and how everyone is somehow Putin's little pawn. I don't completely disagree, but Mr. Pirro fails to take into consideration the massive changes to the geopolitical landscape in the past ten months since the original sale occurred.

First, the deal was always geopolitically-motivated. Anything involving Qatar, Russia and oil is first and foremost geopolitical and not balance sheet profit/loss driven. Qatar bought into Rosneft as a quid pro quo to get the Russians to sign off on OPEC's production cuts which were being pushed hard by the Saudis.

Moreover, Qatar would have also had to convince Putin that they were no longer funding al-Qaeda affiliated groups fighting the Assad government in Idlib. After this deal was announced, resistance in northwestern Syria began to crumble, and Qatar needed to find bigger friends fast or be hung out to dry later.

Saudi Arabia couldn't convince Putin to agree to the cuts because they didn't benefit Russia at all. Remember, the ruble floats freely now while the Saudi Riyal does not which is why the Saudis are in financial and political turmoil, and the Russians are exiting a recession that would have crippled them had it not floated the Ruble back in November of 2014.

So, Qatar stepped in to broker the deal, as reported by Bloomberg and the Financial Times last year and gave Putin what he needed to sign off on the production cut. Rosneft gets a boatload of cash, Qatar gains an ally in Russia, the oil price stabilized, Glencore gets a good deal trading Russian oil.

Everyone wins.

Fast forward to today, and Qatar is suffering under heavy pressure from the Saudis blockading their business, the U.S. put stringent sanctions on European banks doing business with the Russian oil and gas sector, and China is being targeted by the Trump administration on multiple fronts. So, while the economics of this deal vis-à-vis Rosneft's current share price do not make much sense, as Mr. Pirro pointed out, there is a lot more at stake for all involved then simply a few hundred million in share arbitrage that could change in a few days.

China's Answers

China is stepping in here to save not only Intesa, the Italian bank that floated most of the financing for the deal, but also Qatar which gets a major cash infusion in much-needed dollars. Russia further integrates into China's oil trading system in Shanghai, including the much-discussed futures contract convertible to gold. This disentangles the deal with respect to the new round of US sanctions. In fact, this is a perfect pivot away from those sanctions. Remember, Treasury Secretary Steve Mnuchin made a not-so-veiled threat the other day towards China's banks and expulsion from the SWIFT system.

It was over North Korea, but it was intimately tied to Chinese sales of oil. That threat is credible against Qatari banks. Russia and the US already do so little business that exchanging dollars is irrelevant in the grand scheme of things. Russia is already replacing Visa with its own internal credit payment system called Mir. China already has UnionPay.

But that threat is simply not credible against China, the U.S.'s largest trading partner. It would be an act of willful destruction of order within the global capital markets. Moreover, it would test whether or not China's Interbank Payment System (CIPS) is capable of scaling to levels needed to clear and settle China's trade. CIPS is SWIFT-compliant at the protocol level.

What this deal does is further solidify that China and Russia are strategic allies that is growing closer and more meaningful with every attempt to punish them for pursuing what both feel is in their national interest. It also underscores China's commitment to Qatar. China is a major trading partner with Qatar. And, this deal is an important statement to the Saudis that China is willing to step up to defend a major energy supplier and dictate terms.

At some point, China will stop offering Saudi Arabia dollars for its oil. With every move to secure sources it can pay in Yuan for, the Saudi dollar peg weakens. For Rosneft, this deal is neutral. It is simply the vessel for larger geopolitical moves to be made. For Qatar, it is a net positive as this is an obvious quid pro quo for making the original investment in December. It buys them a few months of resistance to Saudi economic pressure before making a decision on floating its currency.

For China, the deal is a net win because it ensures a larger flow of Russian oil into its oil-trading markets to continue building investor trust and confidence over time. And, that is really the ultimate win for them.

Source: Seeking Alpha
 
Saudi Oil Continues Losing Market Share to Russia in China

China would rather get its oil from Russia where it can pay with yuan

Tsvetana Paraskova




The pace of China’s crude oil imports and demand growth is one of the key pieces of data for the oil market and analysts to gauge global oil demand growth. Alongside India, China is the main driver of demand growth, making it a coveted destination for the biggest oil producers, especially those from the Middle East.

The better part of a year into the OPEC production cuts, China’s crude oil imports show how market shares have shifted, and who’s winning and who’s losing the Asian oil supply race while the cartel and its Russia-led allies are restricting production.

The biggest loser in the market share war for China is undoubtedly OPEC’s biggest producer and de facto leader, Saudi Arabia, which is leading the efforts to curtail supply and push oil prices up. The biggest winners within the production cut deal are Russia and Angola. The winners that aren’t part of the deal are the U.S. and Brazil, both of which have significantly raised their crude oil exports to China.

Chinese customs data offers a glimpse into how many barrels of oil the Saudis have given up in China in their quest to rebalance the market, Reuters columnist Clyde Russell writes.

Between January and August, Russia was the top oil supplier to China, followed by Angola and Saudi Arabia. Chinese imports from Russia rose by 13.2 percent to 1.16 million bpd in the first eight months of 2017. Imports from Angola jumped 16.6 percent to 1.05 million bpd, while imports from Saudi Arabia dropped 1.7 percent at 1.03 million bpd in January-August.

Russia had already overtaken Saudi Arabia as the single biggest Chinese oil supplier for 2016, but the OPEC cuts have made that Russian dominance more pronounced this year.

While the Saudis are cutting exports to some Asian buyers, Russia has raised its oil exports this year, Bloomberg data shows. Although Russia is also restricting output (by 300,000 bpd and from a post-Soviet high level), its global exports have exceeded the 2016 export level in each of the months through August this year.

In the Chinese market, Russia held the top supplier spot in August for a sixth consecutive month. In second place came Angola. And in third, Saudi Arabia, with sales down 16.2 percent compared to August last year, to around 861,200 bpd. Angola, for its part, saw its oil exports to China soar by almost 28 percent to 983,500 bpd, Chinese customs data shows.

China’s imports from Iran and Iraq also jumped in August. Iranian oil sales in China increased 5.45 percent to 786,720 bpd—the highest monthly level since 2006, Reuters Eikon data shows. Chinese August imports from Iraq surged 30 percent to 736,400 bpd.

The Saudi share of the Chinese market has markedly decreased in the summer months, after the Saudis started to drastically cut oil exports to select markets to speed up the clearing of the glut in the hope of lifting oil prices.

According to Bloomberg data, the Saudi share of China’s oil imports slumped to an average 11 percent between June and August this year, compared to a share of some 15 percent on average in 2015.

While OPEC members and Russia are battling to lure Chinese buyers, the outsiders to the deal—Brazil and the U.S.—have increased their sales to China. The lower supply from OPEC and the favorable price differentials have prompted Chinese buyers to increase intake of cargoes from North and South America.

Brazilian oil exports to China in January through August surged 41.8 percent to 480,000 bpd, while U.S. crude sales in China averaged 128,000 bpd—that’s more than a 1,000-percent surge, Reuters data shows.

According to EIA data, available up until July, China is the second largest buyer of U.S. crude this year, and in February and April the volume of U.S. exports to China even exceeded that of Canada.

The market share that Saudi Arabia has lost in China is a result of the Kingdom’s current policy to try to boost oil prices. But once the OPEC cuts end—and they will end sooner (March 2018) or later (end-2018)—the race for supplying the fastest-growing oil demand regions will begin in earnest again.

So Saudi Aramco is currently seeking deals with Chinese refineries to secure future exports. Aramco is pursuing a partnership with CNPC to own a share in the 260,000-bpd Anning refinery in the Yunnan province, plus a number of potential deals in the downstream.

Meanwhile, until OPEC cuts end, the Saudis may continue to sacrifice market shares for higher oil prices to support a higher valuation of Aramco in the upcoming IPO next year.

Source: Oil Price

@vostok
 
China-Russia university alliance established to promote cooperation
By Yang Jinghao, Li Yang
2017-10-28 09:21 GMT+8

A total of 65 university presidents from both China and Russia gathered in the southwestern city of Chengdu on Friday to witness the launch of a university alliance spearheaded by China’s Sichuan University and Russia Nizhny Novgorod State Technical University. As part of the Yangtze River-Volga River cooperation mechanism between the two countries, the union aims to promote bilateral exchanges on education, culture as well as science and technology.

"For any country, universities are a major source of talents and technical innovation. The universities along the Yangtze and Volga rivers have their own traditions and advantages. With the alliance, they can further integrate their unique resources to play a more active role in promoting the regional economic and social development of the two countries," Xie Heping, president of Sichuan University, told CGTN.

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Scholars from China and Russia and officials from related authorities gather at the opening ceremony of the university alliance. /CGTN Photo

In 2013, the Yangtze-Volga cooperation mechanism was launched. It includes six regions along the upper and middle reaches of the Yangtze River in China and 14 federal provinces along the Volga. Over the past four years, regions along the rivers have had extensive cooperation on trade, investment and e-commerce, among others.

"Sub-national cooperation is an important part of the general cooperation between China and Russia, and the Yangtze-Volga cooperation is obviously an important part in this regard. The mechanism will greatly boost social and economic development in relevant regions if it works well. There’re still great potentials to be explored," said Cheng Yijun, a senior researcher with the Chinese Academy of Social Sciences.

In July, during a written interview with Russian media, Chinese President Xi Jinping said China and Russia should unlock the potential of sub-national and border area cooperation through the Yangtze-Volga and Chinese northeast-Russian far east mechanisms to scale up mutual investment and speed up SME cooperation.

During the think tank forum following the launch of the alliance, scholars said they hope the alliance, gathering academics of various fields, can provide more intellectual support for the sub-national development between the two neighbors and serve as a medium to bridge the Belt and Road Initiative and the Eurasian Economic Union. Now, among the 65 member universities, 36 are from Russia. Sergei Dmitriyev, president of Nizhny Novgorod’s State Technical University, told CGTN that more universities are to join the mechanism.

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Some professors are invited to be members of the think tank under the university alliance. /CGTN Photo

"Now our cooperation covers such areas as language, history, literature, and science and technology. We hope the cooperation can be expanded with unified and systematic measures. I am very confident about the future development of our alliance," he said.

The establishment of the alliance came just several days ahead of Russian President Dmitry Medvedev’s visit to China. The regular meeting between China’s premier and the Russian prime minister will take place in Beijing next week. The mechanism serves as an important platform for strengthening ties between both nations. Experts say the university alliance will be a big help as well, especially in the field of people-to-people exchange.
 
China, Russia agree to further cooperation
Source: Xinhua| 2017-11-02 00:24:42|Editor: Yamei



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Chinese Premier Li Keqiang (R) shakes hands with his Russian counterpart Dmitry Medvedev at the 22nd China-Russia Prime Ministers' Regular Meeting in Beijing, capital of China, Nov. 1, 2017. (Xinhua/Pang Xinglei)

BEIJING, Nov. 1 (Xinhua) -- China and Russia signed nearly 20 deals here Wednesday in areas including investment, energy and space exploration.

The deals came after the 22nd regular meeting between the heads of government of China and Russia held in the Great Hall of the People, Beijing.

During the meeting, Chinese Premier Li Keqiang told his Russian counterpart Dmitry Medvedev that as each other's biggest neighbor, China and Russia have witnessed robust development of the comprehensive strategic partnership of coordination.

Li said for China, the biggest developing country in the world, development is the solution to all problems.

Both China and Russia view each other's development as an important opportunity, therefore there is a broad prospect for both countries to synergize development strategies and further advance all-round cooperation, said Li.

He said closer bilateral cooperation will contribute more to the peace and development in both countries, the region and the world.

Li briefed Medvedev on the 19th National Congress of the Communist Party of China (CPC) which was held from Oct. 18 to 24 in Beijing.

He said that the CPC National Congress had just elected a new CPC Central Committee with Xi Jinping at the core, established Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guiding spirit of the CPC and mapped out China's future goals of development.

Medvedev, the first head of government to visit China after the congress, congratulated the CPC on the success of the congress and hoped the Chinese people would achieve their goals at an early date.

He said current Russia-China relations are at the apex of history with frequent high-level visits, efficient cooperation on key projects and rapid trade and investment growth.

Russia is willing to enhance traditional cooperation with China in areas such as energy, infrastructure construction and aviation, to expand to new areas including e-commerce and financial investment, and to advance cooperation on cultural and people-to-people exchanges, he said.

China is willing to cooperate with Russia on the basis of mutual respect, equality and common development and promote the building of a new type of international relations featuring win-win cooperation, Li said.

After the meeting, Li and Medvedev signed a joint communique and met the press.

On Wednesday afternoon, Li and Medvedev attended the closing ceremony of the China-Russia Media Exchange Year.

Together with more than 600 representatives from China and Russia, Li and Medvedev watched a video reviewing activities from the past two years, praising the results.

Media exchange year, launched by President Xi and Russian President Vladimir Putin, has shown that China and Russia enjoy a high degree of political mutual trust and mutual understanding in culture, said Li.

Activities, covering the areas of politics, economy, culture and people's daily life, have increased understanding between the two peoples, said Li.

Medvedev said the two countries have held more than 250 activities during the media exchange year, reflecting the deep friendship between the two peoples and the significance of bilateral relations.

Chinese Vice Premier Liu Yandong also attended the closing ceremony.

Also on Wednesday, Chinese Vice Premier Zhang Gaoli, Vice Premier Wang Yang and Vice Premier Liu Yandong received a Russian state award, the Order of Friendship, from Medvedev.

The Order of Friendship is a state decoration of the Russian Federation to reward foreign nationals who have made significant contributions to strengthening peace, friendship, cooperation and mutual understanding among nations.
 
Russia, China to look for new areas of cooperation — Putin

DANANG /Vietnam/, November 10. /TASS/. Russia and China will look for new areas of cooperation and will spare no effort to implement the projects they already have, Russian President Vladimir Putin said on Friday.

"I would like to note that our efforts are not in vain. Trade growth exceeds 35% This is good news. You have mentioned a number of big projects in various areas. We will continue to work hard on them," Putin said at a meeting with Chinese President Xi Jinping. "We will look for new areas of cooperation. I am sure we will find them."

The Russian leader congratulated Xi Jinping on his reelection Secretary General of China’s Communist Party at the October congress. "The results of the congress proved not only your high authority but also the wide support of the Chinese people to your course," he said, adding that comprehensive strategic cooperation with China remains a top priority of Russia’s foreign policy.

The Chinese leader, in turn, thanked Putin for his congratulation. He also hailed successful implementation of a number of joint projects, including in the gas sector and aircraft building, as well as progress in linking China’s The Belt and the Road initiative with the Eurasian Economic Union (EAEU). Xi Jinping stressed that China is ready to further develop relations with Russia.
 

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