Putin Looks to Asia as West threatens to isolate Russia

[Star Wars]

Putin looks to Asia as West threatens to isolate Russia| Reuters


When President Vladimir Putin signed a treaty this week annexing Crimea to great fanfare in the Kremlin and anger in the West, a trusted lieutenant was making his way to Asia to shore up ties with Russia's eastern allies.

Forcing home the symbolism of his trip, Igor Sechin gathered media in Tokyo the next day to warn Western governments that more sanctions over Moscow's seizure of the Black Sea peninsula from Ukraine would be counter-productive.

The underlying message from the head of Russia's biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances.

The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West.

"The worse Russia's relations are with the West, the closer Russia will want to be to China. If China supports you, no one can say you're isolated," said Vasily Kashin, a China expert at the Analysis of Strategies and Technologies (CAST) think thank.

Some of the signs are encouraging for Putin. Last Saturday China abstained in a U.N. Security Council vote on a draft resolution declaring invalid the referendum in which Crimea went on to back union with Russia.

Although China is nervous about referendums in restive regions of other countries which might serve as a precedent for Tibet and Taiwan, it has refused to criticize Moscow.

The support of Beijing is vital for Putin. Not only is China a fellow permanent member of the U.N. Security Council with whom Russia thinks alike, it is also the world's second biggest economy and it opposes the spread of Western-style democracy.

Little wonder, then, that Putin thanked China for its understanding over Ukraine in a Kremlin speech on Tuesday before signing the treaty claiming back Crimea, 60 years after it was handed to Ukraine by Soviet leader Nikita Khrushchev.

Chinese President Xi Jinping showed how much he values ties with Moscow, and Putin in particular, by making Russia his first foreign visit as China's leader last year and attending the opening of the Winter Olympics in Sochi last month.

Many Western leaders did not go to the Games after criticism of Russia's record on human rights. By contrast, when Putin and Xi discussed Ukraine by telephone on March 4, the Kremlin said their positions were "close".

A strong alliance would suit both countries as a counterbalance to the United States.

WARM EMBRACE, BUT NO BEAR HUG

But despite the positive signs from Beijing, Putin may find China's embrace is not quite the bear hug he would like.

There is still some wariness between Beijing and Moscow, who almost went to war over a border dispute in the 1960s, when Russia was part of the Communist Soviet Union.

State-owned Russian gas firm Gazprom hopes to pump 38 billion cubic meters (bcm) of natural gas per year to China from 2018 via the first pipeline between the world's largest producer of conventional gas to the largest consumer.

"May is in our plans," a Gazprom spokesman said, when asked about the timing of an agreement.

A company source said: "It would be logical to expect the deal during Putin's visit to China."

But the two sides are still wrangling over pricing and Russia's cooling relations with the West could make China toughen its stance. Russian industry sources say Beijing targets a lower price than Europe, where Gazprom generates around half of its revenues, pays.

Upheaval at China National Petroleum Corp, at the centre of a corruption investigation, could cause also delays, and Valery Nesterov, an analyst with Sberbank CIB in Moscow, said China also needs time to review its energy strategy and take into account shale gas and liquefied natural gas (LNG).

"The bottom line is that the threat of sanctions on energy supplies from Russia has indirectly strengthened China's position in the negotiations," Nesterov said.

BOOSTING BUSINESS

Russia meets almost a third of Europe's gas needs and supplies to the European Union and Turkey last year exceeded 162 bcm, a record high.

However, China overtook Germany as Russia's biggest buyer of crude oil this year thanks to Rosneft securing deals to boost eastward oil supplies via the East Siberia-Pacific Ocean pipeline and another crossing Kazakhstan.

If Russia is isolated by a new round of Western sanctions - those so far affect only a few officials' assets abroad and have not been aimed at companies - Russia and China could also step up cooperation in areas apart from energy.

CAST's Kashin said the prospects of Russia delivering Sukhoi SU-35 fighter jets to China, which has been under discussion since 2010, would grow.

China is very interested in investing in infrastructure, energy and commodities in Russia, and a decline in business with the West could force Moscow to drop some of its reservations about Chinese investment in strategic industries.

"With Western sanctions, the atmosphere could change quickly in favor of China," said Brian Zimbler Managing Partner of Morgan Lewis international law firm's Moscow office.

Russia-China trade turnover grew by 8.2 percent in 2013 to $8.1 billion but Russia was still only China's seventh largest export partner in 2013, and was not in the top 10 countries for imported goods. The EU is Russia's biggest trade partner, accounting for almost half of all its trade turnover.

DILEMMA FOR JAPAN, SUPPORT IN INDIA

Sechin, whose visit also included India, Vietnam and South Korea, is a close Putin ally who worked with him in the St Petersburg city authorities and then the Kremlin administration, before serving as a deputy prime minister.

In Tokyo, he offered Japanese investors more cooperation in the development of Russian oil and gas.

Rosneft already has some joint projects with companies from Japan, the world's largest consumer of LNG, and Tokyo has been working hard under Prime Minister Shinzo Abe to improve ties with Moscow, despite a territorial dispute dating from World War Two.

But Japan faces a dilemma over Crimea because it is under pressure to impose sanctions on Moscow as a member of the Group of Seven advanced economies.

It does not recognize the referendum on Crimea's union with Russia and has threatened to suspend talks on an investment pact and relaxation of visa requirements as part of sanctions.

Closer ties are being driven by mutual energy interests. Russia plans to at least double oil and gas flows to Asia in the next 20 years and Japan imports huge volumes of fossil fuel to replace lost energy from its nuclear power industry, shut down after the 2011 Fukushima disaster.

Oil imports from Russia rose almost 45 percent in 2013 and accounted for about 7 percent of supplies.

But if the dilemma is a tough one for Japan, it is unlikely to cause Putin much lost sleep.

"I don't think Putin is worried much by about what is said in Japan or even in Europe. He worries only about China," said Alexei Vlasov, head of the Information and Analytical Center on Social and Political Processes in the Post-Soviet Space.

Putin did take time, however, to thank one other country apart from China for its understanding over Ukraine and Crimea - saying India had shown "restraint and objectivity".

He also called Indian Prime Minister Manmohan Singh to discuss the crisis on Tuesday, suggesting there is room for Russia's ties with traditionally non-aligned India to flourish.

Although India has become the largest export market for U.S. arms, Russia remains a key defense supplier and relations are friendly, even if lacking a strong business and trade dimension, due to a strategic partnership dating to the Soviet era.

Putin's moves to assert Russian control over Crimea were seen very favorably in the Indian establishment, N. Ram, publisher of The Hindu newspaper, told Reuters. "Russia has legitimate interests," he added.

For Putin, the Crimea crisis offers a test case for ideas he set out in his foreign policy strategy published two years ago as he sought a six-year third term as president.

He said at the time he wanted stronger business ties with China to "catch the Chinese wind in the sails of our economy". But he also said Russia must be "part of the greater world" and added: "We do not wish to and cannot isolate ourselves."

Two years on, he is closer to securing the first goal, but it is not yet clear how his population feels he has done on the second.

(Additional reporting by William Mallard, Aaron Sheldrick and Linda Sieg in Tokyo, Ben Blanchard in Beijing, Jack Frank Daniel and Douglas Busvine in New Delhi, and Lidia Kelly in Moscow; editing by Philippa Fletcher)

[
Petrodollar Alert: Putin Prepares To Announce "Holy Grail" Gas Deal With China | Zero Hedge

And now add bilateral trade denominated in either Rubles or Renminbi (or gold), add Iran, Iraq, India, and soon the Saudis (China's largest foreign source of crude, whose crown prince also happened to meet president Xi Jinping last week to expand trade further) and wave goodbye to the petrodollar.[

 

[Beidou2020]

Sanctions effect: Russia to change its economic partners…for the better

Brazil's President Dilma Rousseff, India's Prime Minister Manmohan Singh, Russia's President Vladimir Putin, China's President Xi Jinping and South African President Jacob Zuma pose for a photo after the BRICS leader's meeting at the G20 summit on September 5, 2013 in Saint Petersburg.(AFP Photo / Sergei Karpukhin )
http://www.addthis.com/bookmark.php...2922401,d.bmk&tt=0&captcha_provider=nucaptcha
Western sanctions might push Russia to deepen cooperation with BRICS states, in particular, to strengthen its ties with China, which will possibly turn out to be a big catastrophe for the US and the EU some time later.

On March 18, the spokesperson for the Kremlin, Dmitry Peskov, claimed in a BBC interview that Russia would switch to new partners in case of economic sanctions being imposed by the European Union and the United States. He highlighted that the modern world isn't unipolar and Russia has strong ties with other states as well, though Russia wants to remain in good relations with its Western partners, especially with the EU due to the volume of deals and joint projects.

Those “new partners” are not really new since Russia has been closely interconnected with them for almost 13 years. This is all about the so-called BRICS organization, consisting of Brazil, Russia, India, China and South Africa. BRICS represents 42 percent of the world’s population and about a quarter of the world’s economy, which means that this bloc of states is an important global actor.

The BRICS countries are like-minded in regard to supporting the principles of international law, the central role of the UN Security Council and the principles of the non-use of force in international relations; this is why they are so actively performing in the sphere of settling regional conflicts. However, the cooperation between Brazil, Russia, India, China and South Africa goes beyond political aspects and is also demonstrated by dynamic trade and multiple projects in different areas. Today, in total, there are more than 20 formats of cooperation within the BRICS which are intensively developing. For example, in February the member-states came to an agreement about 11 prospective directions of scientific and technical cooperation, from aeronautics to bio- and nanotechnology. In order to modernize the global economic system, at the center of which stand the US and the EU, the leaders of Brazil, Russia, India, China and South Africa have created the BRICS Stock Alliance and are creating their own development bank to finance large infrastructure projects. On the whole, despite fierce criticism of BRICS as an organization with no future, it is developing and increasing cooperation with its members and, in fact, BRICS is showing pretty good results.

With suspension of Russian participation in G8 and possible strengthening of economic sanctions, the experts expect some particular industries to be targeted, including limits on imported products. While the West seeks to hit Russia hard, it is important to notice that Russia is ready to switch to other markets, for instance BRICS, and increase trade volumes with countries from this bloc.

Indeed, Russia buys significant amount of products from NATO states, for example, 50 percent of fruits and berries come from Spain, Holland and Poland. Nevertheless, Russia is intensifying its economic ties with the developing world. In 2012 Russia was buying 41 percent of its beef from Brazil, though this index has recently decreased to 20 percent, and Russia is likely to increase its import in case of need. In February 2013, Russia and Brazil reached an agreement on the long-standing problem of pork exports to Russia, as well as agreeing on a list of sanitary and quality requirements for the annual import of millions of metric tons of Russian wheat. This is a shining example of the substitute partnerships that have yielded positive results, although some problems with sanitary norms had to be resolved. In other words, it’s beyond the power of the EU and US to make Russian people suffer from products scarcity since they are not the country’s only trade partners.

Chinese President Xi Jinping (L) and his Russian counterpart Vladimir Putin.(Reuters / Sergei Ilnitsky)



The biggest brick in BRICS
It’s hard to ignore the fact that the role of the biggest and strongest member of BRICS is China’s, and obviously Russia will seek to improve its relations with Beijing even more than before. During the last year, relations between Russia and China have been enhancing and actively developing in various spheres. In particular, in 2013 the states signed 21 trade agreements, including a new 100 million ton oil supply deal with China’s Sinopec. In October 2013, the Xinhua news agency also reported that the two governments signed an agreement to jointly build an oil refinery in Tianjin, east of Beijing.

Moreover, China promised to pump $20 billion of investment into domestic projects in Russia, focusing on transport infrastructure, highways, ports, and airports, and it hoped to increase investment in Russia four-fold by 2020. In 2013, the trade volume between the states reached $89 billion, with bilateral economic relations showing positive signs, meaning that further cooperation will increase.

Indeed, leaders of the states called for annual bilateral trade between the two countries to be boosted to $100 billion by 2015. Besides, the two countries are considering further partnerships in the energy sector, particularly in the gas industry.

Currently, Russian gas is not supplied to China, though in 2013 Russia’s biggest independent natural gas producer, Novatek, signed preliminary memorandums with CNPC to sell at least 3 million tons of LNG per year between Yamal LNG and PetroChina International. Another Russian company, Rosneft, which is 75 percent state-owned, is vastly expanding its LNG projects to diversify its portfolio, and is focusing heavily on eastern markets, like Japan and China. In terms of confrontation between the West and Russia, the gas contracts between China and Russia could really gain momentum. At the same time it’s possible that Moscow would sign contracts on the sale of the Sukhoi Su-35 fighter to China before President Putin embarks on a visit to Beijing in May.

In 2014, Russia and China have a full agenda for bilateral cooperation, which includes not only trade but also such spheres as energy, aircraft building, mechanical engineering, military and science cooperation, tourism, etc. At the same time, cultural ties between the two nations are also strengthening, with 2014-2015 being named years of youth exchange. The leaders of Russia and China also decided to prepare jointly celebration events for the 70th anniversary of the victory over German fascism and Japanese militarism in 2015.

President Dilma Rousseff (L) speaks before the BRICS summit in Saint Petersburg in the sidelines of the G20 summit on September 5, 2013.(AFP Photo / G20RUSSIA)


Another important aspect of cooperation between Russia, China and India touches upon Afghanistan. The trilateral involvement of those nations into the Afghan issue has been actively developing since 2013 and could become a major factor for the Afghan leadership following the US withdrawal. It is important to note that the Afghanistan issue is vital to the regional security of Russia, China and India.

Once again, the recent Olympic Games emphasized the specific character of relations between China and Russia. The Chinese president, unlike European leaders, was present at the Opening Ceremony, which is especially demonstrative given that it was the time of the Spring Festival in China, when the Chinese prefer not to leave their homes except for visiting relatives and close friends.

Thus, China may become the biggest beneficiary of the sanctions against Russia since it means further rapprochement between Russia and China. One should remember that China has always been mainly interested in doing business and for sure it would be silly for Beijing to lose such a great opportunity to strengthen its ties with Russia. If I were someone responsible for decisions in Brussels or Washington, I would revise my opinion on implementation of sanctions against Russia. I wouldn't call it a possible revival of the “Sino-Soviet axe” which existed during the Cold War and was an ideological counter-balance for the West, although this time the West itself is pushing one of its main rivals closer to another, creating a massive power that would surpass both the US and the EU by a long chalk. So the question is whether the West really wants this to happen? And what will it do when the Chinese dragon and Russian bear form an alliance?

Brazil is not only about meat
As was already mentioned, another BRICS-member Brazil is one of the Russian suppliers of meat, and trade in this industry is likely to rise if the West resorts to economic sanctions. However, meat import isn’t the only thing that binds these states. Over the last few years, Russia has also imported Brazilian coffee, sugar, juices and alcohol and exported mainly fertilizers. Moscow and Brasilia made a commitment to develop comprehensive cooperation in various areas, although for the moment particular attention is being paid to the military sphere. For instance, in December 2012 the states signed a treaty on supplies of Russian helicopters to Brazil.

The total trade volume between Russia and Brazil in 2013 made up $5.7 billion, however the two states seek to increase it up to $10 billion in the near future. The trade index in January 2014 reached $438.9 million, which was $25 million higher in comparison with January 2013. The distinctive feature of the cooperation between the two countries is the complimentary character of their economies, which makes ties between Brazil and Russia even stronger. In fact, there is a great potential for Russian-Brazilian cooperation and results of these ties could also be disappointing for the West.

I is for India
In his speech at a joint session of parliament on March 18, Russian President Putin thanked both India and China for their stance on the Ukrainian crisis. But why is India supporting Russia? Maybe the Indian government equates some similarities with Crimea in the history of Sikkim’s referendum and further merger with India when it became the 22nd Indian state in 1975 with Russian support. Maybe India is just seeking to develop closer ties and mutually beneficial partnerships with Russia.

Anyway, let’s look at some facts and figures. In 2012, bilateral trade volume reached $11,000 million which is rather modest in comparison with China or Brazil. Moreover, in 2013 this index slightly decreased. However, 2014 promises the renewal of bilateral contracts between India and Russia. For example, Defexpo India 2014 has reaffirmed the special relationship that exists between the defense industries of Russia and India, with a pavilion that houses exhibits of Russian companies being visited by top members of the Indian establishment. In general, the defense interactions between Russia and India are quite diversified, with almost every defense contract providing the creation of joint ventures or licensed production. In 2013, India’s import of Russian weapons reached $4.78 billion. Another industry which attracts India is computer-guided weapons, produced by the Russian Morinformsystem-Agat Concern.

In February the two states also confirmed their plans to boost cooperation in nuclear energy, with the former backing the construction of more units at the Kudankulam Nuclear Power Project (KNPP) and other parts of the country. Besides, India and Russia are set to sign an agreement aimed at productive cooperation in many spheres: space and military cooperation, trade, construction of a pipeline from Russia to India, and plans to set up a Joint Study Group to look into the scope of the CECA (Comprehensive Economic Cooperation Agreement) with member-countries of the Customs Union (the Russian Federation, Kazakhstan and Belarus). It is certain that after this issue is addressed, trade volumes between Russia and India, as well as between the Customs Union and India will increase significantly.

AFP Photo / Prakash Singh


Costs for the West
It’s not really rational for the US and the EU to antagonize and try to isolate Russia. And there are several reasons for this. First of all, Russia is the largest oil and gas producer in the world and it simply means that imposing economic sanctions on Russia would shake up the global energy market and, therefore, the entire global economy. Not to mention the EU’s dependency on Russian gas. Are the global economies ready to witness a new crisis, given that they are still recovering from the latest financial crisis? It’s doubtful.

Second, Russia is investing massively in the US financial market, especially in Treasury bonds, and consequently, if Russia decides to withdraw its investments in response to Western sanctions, it would hit the US economy and cause a real financial crisis. So, crisis again.

Finally, during the last few years the Russian market has become one of the world’s largest markets for EU goods, products and services, while the EU is actively investing in Russia. In case of further worsening of relations between Russia and the West, the EU will have a serious headache, searching for new markets and suffering lasting damage because of suspended joint contracts.

So is it really worth pushing for such a gloomy future, or is it better to recognize the will of the Crimeans and give the whole of Ukraine a chance for a better life?

 

[Chinese-Dragon]

The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West.

"The worse Russia's relations are with the West, the closer Russia will want to be to China. If China supports you, no one can say you're isolated," said Vasily Kashin, a China expert at the Analysis of Strategies and Technologies (CAST) think thank.

Some of the signs are encouraging for Putin. Last Saturday China abstained in a U.N. Security Council vote on a draft resolution declaring invalid the referendum in which Crimea went on to back union with Russia.

Although China is nervous about referendums in restive regions of other countries which might serve as a precedent for Tibet and Taiwan, it has refused to criticize Moscow.

The support of Beijing is vital for Putin. Not only is China a fellow permanent member of the U.N. Security Council with whom Russia thinks alike, it is also the world's second biggest economy and it opposes the spread of Western-style democracy.

Little wonder, then, that Putin thanked China for its understanding over Ukraine in a Kremlin speech on Tuesday before signing the treaty claiming back Crimea, 60 years after it was handed to Ukraine by Soviet leader Nikita Khrushchev.

It makes a lot of sense.

China is the biggest energy consumer in the world, and our energy consumption is only going to multiply in the future as we continue to develop ourselves.

Russia is an energy superpower, and with the already built pipelines from Russia to China, they can laugh off the threat of Western sanctions.

Also, at the end of the day, we have common strategic goals. And a common rival in America.

The USA is the sole superpower, and their goal is to maintain their global hegemony. For this reason... China and Russia are two of their major threats, since we are trying to push for a multi-polar world, in which we will act as alternative poles of power. (Arguably Russia has already succeeded).

 

[Beidou2020]

That Reuters article is wrong on the amount of trade done between Russia and China.

Reuters article says $8.1 billion in trade. I don't know if it was a genuine mistake by Reuters or a deliberate attempt to mislead the public. Knowing how western media propaganda operates, I wouldn't rule out anything.

But the real trade number is $89 billion in 2013.

The target was $100 billion by 2015, so I think that target can be reached.

 

[Pakistanisage]

BRICKS on the rise..........

 

[madooxno9]

Why i am thinking this way , i have no clue . I am seeing history in making as Russia with China and India will covertly form an alliance and balance the power . I like this covert way of alliance rather than overt , as this will help India to still benefit from its friendly relations with west.

Though i am not anti west but i am against hegemony and control of power by west.

 

[blackface]

Russians are not even communists anymore. On what ideological grounds are they posturing against the West? They seem confused.

 

[IndoUS]

Give us all the oil......

 

[Beidou2020]

Russians are not even communists anymore. On what ideological grounds are they posturing against the West? They seem confused.

Russia and China are against western imperialism (Yankees, EU, NATO, etc).

Pure and simple.

You might find it perfectly fine to worship the west and dance to their orders but countries like Russia and China have pride and honour and value being independent countries with a truly independent foreign policy.

Not many countries on this planet have independent foreign policies.

 

[blackface]

Russia and China are against western imperialism (Yankees, EU, NATO, etc).

Pure and simple.

You might find it perfectly fine to worship the west and dance to their orders but countries like Russia and China have pride and honour and value being independent countries with a truly independent foreign policy.

Not many countries on this planet have independent foreign policies.

Most Brazilians also dislike the US because they treat us as their backyard but that doesn't mean we should start cheering on Chinese or Russian imperialism.

 

[madooxno9]

Most Brazilians also dislike the US because they treat us as their backyard but that doesn't mean we should start cheering on Chinese or Russian imperialism.

Don't cheer , come and join the alliance.

Its better to be part of this alliance rather than crying and bitching about US and west. Together we make a formidable power to reckon with. We should not do what west does , we should be polite and humble in our ways of doing business with rest of the world.

I know we have an alliance BRICKS , but it is not what i am talking about, i am saying about a covert and active alliance. Where we have more business , more co-operation and more high level & people to people contacts. And off course Helping each other with Military Might

 

[blackface]

Don't cheer , come and join the alliance.

Its better to be part of this alliance rather than crying and bitching about US and west. Together we make a formidable power to reckon with. We should not do what west does , we should be polite and humble in our ways of doing business with rest of the world.

I know we have an alliance BRICKS , but it is not what i am talking about, i am saying about a covert and active alliance. Where we have more business , more co-operation and more high level & people to people contacts. And off course Helping each other with Military Might

Brazil is a western country.

 

[madooxno9]

Brazil is a western country.

Do they consider you as west ? do they consider you equals ? does Brazil have all western standards ? You are still a developing country and "West" will never accept you as partner or equals . You like or not but this is true and fact.

 

[Developereo]

It's not so simple.

China has strong economic bonds with the West and needs to be mindful of any repercussions if it is seen as grossly undermining Western sanctions.

 

[Pakistanisage]

Putin is the MAN.......