WASHINGTON – Russian President Vladimir Putin intends to respond to Western sanctions triggered by his country’s participation in the Ukrainian crisis by dramatically expanding bilateral trade with China, particularly in providing energy to fuel China’s fast-growing economy, according to Joseph Farah’s G2 Bulletin.
Moscow and Beijing have developed closer bilateral ties as relations between Russia and the European Union worsen. Russian Prime Minister Dmitry Medvedev has said cooperation with Beijing is a top priority for Moscow.
“It is the rise of the Eurasia century,” one Asian source said. “Moscow and Beijing’s interests are converging.”
China is experiencing dramatic economic growth and has become the second largest economy in the world in the past two decades, growing faster than the combined economies of the United States and the entire European Union.
Economic experts predict China’s economy will be the largest in the world by 2018.
Putin intends to meet with Chinese President Xi Jinping in May to conclude an energy agreement and possibly work on military and other business contracts, including a major Siberian timber deal, sources say.
The deal works for Beijing, since it knows Russia needs to offset the Western sanctions and thus will give it a reasonable price. At the same time, the deal works for Beijing, which wants to wean itself from the use of coal in industrialized cities where there are serious environmental issues stemming from burning coal.
An immediate issue in the May talks will be construction of the Power of Siberia pipeline from Russia into China at a cost of $22 billion.
“The worse Russia’s relations are with the West, the closer Russia will want to be to China,” said Vasily Kashin of the think-tank Analysis of Strategies and Technologies. “If China supports you, no one can say you’re isolated.”
Russian Deputy Prime Minister Dmitry Rogozin estimates that bilateral trade between Russia and China could amount to $100 billion by next year.
Since the beginning of the year, trade between the two countries has increased by 4 percent, but Rogozin wants faster expansion.
“The pace is insufficient in order to meet the objective set by the leaders of Russia and China – to bring the bilateral trade turnover to $100 billion by 2015,” Rogozin said.
Last year, China became Russia’s largest trade partner while Russia became China’s ninth largest, Rogozin said.
Russia’s annexation of the Crimean Peninsula also may prove to be potentially lucrative for Moscow, since it intends to build a deep-water port for further trade with Europe.
The Western sanctions on the bank accounts and travel of 11 prominent Russian and Ukrainian officials has been described by some sources as laughable. Although, there is the threat of sanctioning Putin’s personal accounts, said to be in Swiss banks.
Various reports indicate Putin's personal accounts may amount to $40 billion.
At the urging of the U.S., Europe is contemplating further sanctions, but it is hampered by its dependence on Russia for vital oil and natural gas imports through Ukraine.
If the Europeans attempt further sanctions, Moscow is expected to raise the price of oil and natural gas or even arrange for a cutoff due to the billions of dollars Ukraine already owes Russia for energy sales.
Because most of the oil and natural gas pipelines for Europe go through Ukraine, a shutoff of energy to Ukraine automatically will affect European access.
Consequently, Russian officials are suggesting to the West that any further sanctions against its recent seizure and annexation of Crimea will be counter-productive.