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22

A Pipeline to Where?

The state of Russian-Chinese relations is being complicated by delays and misunderstandings over the Russian-Chinese oil pipeline project: Angarsk to Daqing. Russia is also talking to Japan about an alternative route.

The state of Russian-Chinese relations is being complicated by delays and misunderstandings over the Russian-Chinese oil pipeline project: Angarsk to Daqing. Russia is also talking to Japan about an alternative route. How seriously might this conflict affect Sino-Russian relations?

The strategic triangle idea is certainly being revived: Russia, China, and India

The recent visit of Indian Prime Minister Atal Bihari Vajpayee to Moscow rekindled interest in the all-but-forgotten idea of a strategic triangle comprising Russia, China, and India. The hypothesis, quite debatable in the first place, took the form of a not-unachievable objective. The proposal was made to have India join the Shanghai Cooperation Organization (SCO) as a full member in the near future. It seems that Moscow, Beijing, and New Delhi intend to use the idea as a kind of counterweight to Washington's decision to join the SCO as an observer.

If India does join the SCO, Russian-Chinese-Indian cooperation would be augmented by a basis of international law. It would make the SCO the largest geopolitical security structure uniting a number of world powers and encompassing all major Eurasian regions.

Needless to say, the SCO would also become the largest political player in Central and South Asia, because its sphere of responsibility would include Afghanistan, Kashmir, and other similar problems. To what extent this expansion of the SCO would be in the interests of Russia is a different question - a question that lacks a simple answer at this particular point.

At the same time, the situation in the region in general and the state of Russian-Chinese relations are complicated by the uproar over the Russian-Chinese oil pipeline project (Angarsk to Daqing). For the first time in a decade, Beijing is speaking about "political trust" in Moscow - which it claims is being undermined by the inconsistency of the Kremlin's policy. That is an oblique way of saying that negotiations over an alternative route (Angarsk to Nakhodka) are underway between Moscow and Tokyo: talks China would like to see stopped.

Prime Minister Mikhail Kasianov visited China recently, saying during the visit and immediately afterwards that the region's substantial seismic and environmental challenges might interfere with the pipeline project. The final decision on the route would be made in three months, Kasianov said. Officials in Beijing are not convinced. Some Chinese analysts say that the decision will be made only after the 2004 presidential election in Moscow. Neither has the arrest of Mikhail Khodorkovsky - whose company was supposed to build the pipeline to Daqing - alleviated Beijing's fears and apprehension.

How seriously might this conflict affect Sino-Russian relations?

Firstly, mothballing this project would strike at China's plans to rearrange its oil and energy import patterns. Beijing wants Siberian oil in order to reduce its dependence on oil brought in by tankers from the Persian Gulf and Mideast.

Secondly, disruption of the contract would affect the Chinese government's plans to stimulate the economies of the southern, western, and northern provinces and intensify economic development of North-East China. Needless to say, the program for modernization and development of the region requires additional oil and gas.

Thirdly, Chinese experts and politicians are gradually coming to understand the potential consequences of Chinese-Japanese rivalry over energy resources. This rivalry is global. Not restricted to Russian oil alone, it concerns imports from Latin America, the Mideast, and so on. Essentially, in the negotiations with the Kremlin, Beijing has not even tried to make the other side economically interested in dealing with it.

For example, Beijing could offer Moscow better terms for oil imports. As a monopolist importer of Russian oil, in its trade relations with Russia China does not demonstrate the flexibility it uses in its dealings with the United States and Europe. Until now, Beijing has always tried to educate and lecture Russia whenever the Daqing contract was mentioned, ever referring to Moscow having some sort of political obligations to China, allegedly stemming from the strategic nature of their partnership.

Fourthly, the latest debates make it plain that there is a certain group of politicians in China whose attitude towards Russia is fairly hard-line and demanding. Unlike Jiang Zemin's generation, the fourth generation of Chinese politicians does not experience any romantic feelings towards Russia and has no inclination to forgive Russia anything. On the contrary, these politicians are intent on being demanding. Among other things, they use the Daqing contract as leverage in talks over Russia's future membership of the World Trade Organization.

All the same, Russian leaders should not try to take advantage of Chinese-Japanese discord right now. This is unproductive and dangerous, because it may result in a situation where Russia would be at fault in the eyes of Beijing and Tokyo alike. Moreover, specialists say that Chinese-Japanese rapprochement remains a possibility, or else these two countries may reach an oil import agreement encroaching on Russia's interests.

In short, the time has come for an energy summit on Siberian oil and gas exports to North-East Asia. The time has come to draft a collective strategy for energy projects in Russia and the Asia-Pacific region.

Author: Sam Maxwell

Source : Neftegaz.ru