Russia and China secure Oil Agreement

Ekaterina Volozova

Beijing– (October 8, 2010) China and Russia have signed a series agreements, among them, an oil partnership which is aimed at further boosting the economic ties between the two countries. The agreements were reached during the Russian President Medvedev’s visit to China recently. One of the highlights of the visit was the signing of an agreement between the Russian company “Transneft” and the Chinese National Oil and Gas Corporation, which discussed oil transportation from Russia to Northeast China. The 999-kilometer oil pipeline that connects Skovorodino in eastern Siberia to Daqing in northeastern China would send US$150 billion worth of oil to China over the next 20 years, reported 2point6billion.com (a commentary and news forum about impact trade, development, investment, and emerging markets of Asia).

The question of Russia- China partnership has been discussed widely in the media around the world, and is sometimes considered as a “signal” for Western countries, as reported by financial times. Newsweek reported that exporting to the Chinese market, instead of depending mostly on the European market can be a problem for Russia in the future, as it continues to develop. However, generally, the current trend as can be seen from the outcomes of Medvedev’s trip to China is that Russia is attempting to diversify its exports away from Europe. Another interesting fact is that the trade will be conducted in Rubles and Yuan, which will gradually diminish the dollar role in the region, according to businessweek.com.

Both the Russian and Chinese sides had high hopes for the trip. “Today, Russia and China are largely solving similar tasks as they move along the path of comprehensive modernization,” Medvedev said before embarking on the trip. Before beginning his three-day trip, Medvedev told the People’s Daily in an interview that Moscow and Beijing should work together more closely since they both face a common challenge.

On his last day in China, President Dmitry Medvedev visited Shanghai EXPO-2010, which caused quite a stir in the media. The Russian mascot, as it turned out, created humor. The so-called “Neznayka”, the symbol of the Russian expo, is an image of a little boy who is “boastful and ignorant”, according to Newsru.com, a Russian news outlet. When the mascot was first introduced in China, it caused a lot of bewilderment, since this character is quite popular in Chinese comics.

The trip by Russian President signaled a future strengthening of the Sino-Russian relations. This step was important for both sides, especially as many important bilateral agreements were signed – the most crucial one being the Oil Agreement, since it could signify a new era for trade in the Eurasian region. As mentioned earlier in the article, the trade will be conducted in Rubles and Yuan. This fact is especially relevant because many analysts are predicting that the dollar will begin to phase out as the World’s main reserve currency. An agreement such as this one could lead to many changes in the economy in the future.

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