China, Russia bolster ties with $3.5 billion in deals
Russia and China looked to steady their close but increasingly imbalanced relationship on Tuesday when visiting Russian Prime Minister Vladimir Putin ushered through trade deals said to be worth $3.5 billion, Reuters reported.
Putin's talks in Beijing with Chinese Premier Wen Jiabao are also likely to cover the international hotspots on which both governments share many views, especially North Korea's nuclear weapons program and its latest missile tests.
But with China's economy steaming ahead while Russia has lagged during the global downturn, the two big neighbors appear focused on shoring up trade, energy and political ties.
Russian and Chinese companies signed deals worth $3.5 billion on Tuesday, the second day of Putin's visit to Beijing, his deputy Alexander Zhukov told reporters there.
The Kremlin last week said the two sides would sign commercial deals worth $5.5 billion during Putin's visit.
"This is the revised number, the final figure," Zhukov said of the $3.5 billion figure without explaining the discrepancy. "There will be no more commercial deals signed during the visit."
The deals included a $500 million loan from the Agricultural Bank of China to Russia's second biggest lender VTB.
Chinese and Russian news reports have said Putin and Wen may also unveil an agreement on securing Russian natural gas, but it was not clear if the pact would bring any concrete progress on a deal that has been mired for over three years in disagreements over pricing.
Behind Russia's eagerness for deals appear to be worries that the global financial crisis has left it struggling with a shrinking economy and trade while China is confident its GDP will grow 8 percent this year, consolidating its status as the world's third-biggest economy, said Bobo Lo, a senior research fellow at the Center for European Reform in London.
"The global financial crisis has accentuated the disparity between China and Russia," said Lo, a former Australian diplomat who specializes on Sino-Russian relations. "Really, Russia feels its been kicked into the long grass by the crisis."
Russia, the world's ninth-biggest economy, is struggling to regain its footing after a downturn saw GDP plunge from 7 percent annual growth to an expected 8 percent collapse this year.
Beijing also has its reasons for courting Putin, who remains his country's most powerful figure after leaving the presidency.
China sees Russia as a valuable strategic counterweight to U.S. influence, and believes Russian energy, resources and markets will remain important in coming decades, said Zhao Huasheng, an expert the two countries' relations at Fudan University in Shanghai.
"The fall-off in trade reflects the overall global crisis...but both countries will be making special efforts to put economic relations back on a healthy track," he said. "This is also the 60th anniversary of diplomatic ties, so both sides want to stress the importance and positiveness of relations."