Discussing recent talks in Beijing between Russian Deputy Prime Minister Igor Sechin and his Chinese counterpart Vice Premier Wang Oishan in an article in Asia Times last month, the former Indian diplomat M.K. Bhadrakumar quoted a commentary in China Daily:
Without getting into details, China Daily merely took note of the talks as "a good beginning" and commented, "It seems that a shift of Russia's energy export policy is under way. Russia might turn its eyes from the Western countries to the Asia-Pacific region ... The cooperation in the energy sector is an issue of great significance for Sino-Russian relations ... the political and geographic closeness of the two countries would put their energy cooperation under a safe umbrella and make it a win-win deal. China-Russia ties are at their best times ... The two sides settled their lingering border disputes, held joint military exercises, and enjoyed rapidly increasing bilateral trade."'
In a slightly earlier article, Bhadrakumar noted the importance of diversification to the East in the energy diplomacy which Medvedev has been pursuing, if anything, even more robustly than Putin.
Soon after taking over in the Kremlin in May, Medvedev ordered the expeditious completion of the first stage of the Eastern Siberia Pacific Oil Pipeline (ESPO) by end-2009. The ESPO has a vital role in Moscow's efforts to balance its oil export strategy between Europe and Asia-Pacific. Moscow hopes to target Asia-Pacific as the export destination for one-third of its oil exports by 2020, as compared to 3% currently.'
How far -- looking ten or indeed twenty years ahead -- is diversification realistic, given the constraints imposed by the problems of transport?
'Course, if the Russians can sell gas to China then they might become able to simply keep the Western gas in the ground...
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
But China will never get gas that would otherwise go to Europe, it will get gas from East Siberian fields that can only ever be used for that purpose. So such sales would only come in addition to, and separately from, European sales. They will provide some measure of diversification of revenue streams to Russia, but no additional physical leverage against Europe. But as Europe does not even acknowledge that we hold an "energy (payments) weapon" against Russia, this is all irrelevant, right? In the long run, we're all dead. John Maynard Keynes
Except insofar as it might allow the Ruskies to stop selling us our! gas because they have an alternative revenue stream to make up for lost profits.
But China will never get gas that would otherwise go to Europe, it will get gas from East Siberian fields that can only ever be used for that purpose.
