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Moscow Beijing breakthrough

It will be no exaggeration to say that even many privy to the preparations for a Beijing meeting between the leaders of Russia and China, Vladimir Putin and Hu Jintao, were surprised at the number of agreements reached as a result of the laborious and long homework done by various departments.
Mr. Putin has described the Beijing talks as a summit of "breakthrough decisions." And this is no exaggeration.

Here is everything in a nutshell.

First, it is difficult to recall any summit attended by Russian leaders that did not simply discuss common aspirations, but the details of business projects worth tens of billions of dollars.

Second, such sums and projects can only feature in contacts between people who do not have any serious political or more general problems.

And now some details. Putin mentioned an unexpected figure in Beijing: $20 billion. This is what bilateral trade could reach by the end of the year. An earlier cited figure was $17.6 billion. As for the president's intentions "to reach the $60 billion dollar mark in the next five to six years" and then even $100 million, these are only the final figures for projections announced at the end of the negotiations.

They are all contained in a document entitled the Plan of Action for 2005-2008. It is a remarkable document. It speaks of cooperation in strategically important fields for the two countries, which are tipped as economic leaders of the future. It concerns coordinating efforts in such areas as space, nuclear power, bioengineering, chemicals, computer technologies, information technologies, and new materials. This is not a general description; it is a list of detailed projects that have names and addresses.

On top of that, as they prepared for the visit, Chinese partners voiced a desire to invest $12 billion in the Russian economy in the next five to ten years.

What do these figures mean? It may berecalled that Russia's principal trading partner in January-August 2004 was Germany, which accounted for $14.7 billion dollars in trade. China is now aspiring for first place in Moscow's foreign trade statistics, which in January-August reported $151.8 billion. Moreover, the figures mentioned in Beijing look good even in the context of overall Chinese foreign trade, which seems set to exceed a trillion dollars this year.

As for investments in Russia (Britain is likely to overtake Germany here), in the first half of 2004, direct investments in the Russian economy totaled $18.98 billion, or 49% more than in the same period last year. China only recently became a net capital exporter, but Russia, if the plans are implemented, will be one of its priorities.

As regards politics, and especially trust, one of the persistent intrigues in international relations over the last fifty years has been that too many people have sought to antagonize the two neighbors, Moscow and Beijing. Anything ranging from unmarked stretches of the Russian-Chinese border, Chinese immigration to Russia, the collapse of the Yukos project, or deliveries of crude to China through a long-distance pipeline, has been exploited for these ends recently. It is curious that all these matters have been raised by Russia's liberal forces, which were almost wiped out at State Duma elections nearly a year ago. Indeed, they were possibly one of the reasons for this stunning defeat.

Ahead of his visit, Putin emphasized in an interview with Chinese journalists, "There are no political, ideological or economic problems standing in the way of Russia and China developing energy relations." This is a political signal that became central to the current visit to China.

Instead of the "Yukos project", which soured bilateral relations, Russia and China now plan to conclude an inter-governmental agreement on the basic principles of cooperation in the oil and gas industry, and may look to increased oil supplies from Russia to China by rail (no fewer than ten million metric tons by 2005). They can also start planning new Russian-Chinese oil and gas projects, including the construction of a Russia-China oil pipeline, and projects to develop jointly oil and gas deposits in their territories; prepare an agreement on the Kovykta gas project; and plan Russian participation in building power stations, including nuclear and floating nuclear plants. And at the same time, they can finish their bilateral talks on Russia's WTO entry.

Next. The Russian-Chinese border, the longest in the world at 4,300 kilometers, has been completely demarcated. An additional agreement on the Russian-Chinese state border's eastern segment, which was signed in Beijing, is the last one. Furthermore, as far as border issues go this is an international sensation. The idea of sharing the use of admittedly disputable territories is a clear precedent for resolving a problem between Russia and Japan (the four southern Kurile islands). It also illustrates the thought, which has often been repeated by Moscow in talks with Tokyo, that such issues are easy to resolve given a certain level of good-neighborly relations.

As concerns the Chinese immigration and the idea of "demographic expansion of China into the Russian Far East," a rider attached to this phenomenon, the problem was delegated to its appropriate place a few months before summit as one of secondary importance to be solved as a matter of routine procedure.

There are no more problems as such. However, there is confidence that although growing ties may create new and complex situations there is something to fall back upon to solve them.

The summit has one feature that is not necessarily obvious to the outside world: the two presidents expanded the range of topics under discussion. The point is that a decision was taken to hold two summits a year under Boris Yeltsin and Jiang Zemin. One was between prime ministers, who were expected to talk economics, and the other was between presidents with the focus on international and other politics. This time the plan was upset for two reasons. The first was that in political terms, even without any special negotiations, the two governments think along similar lines. No detailed discussions are needed, for example, to recognize the obvious - terrorists and separatists in Chechnya and Eastern Turkestan are part of international terrorism and "must be the target of a joint anti-terrorist struggle of the international community."

The second reason is that economic matters now hold the center stage in relations between the two countries. Pragmatism and economic approach epitomize both Vladimir Putin's foreign policy and, apparently, that of Hu Jintao. So these issues are now presidential prerogatives.

One simple conclusion can be drawn from what has happened literally within hours of Putin landing in Beijing. The summit has reinforced the two powers' positions in the world economy and on the world stage. This has always been the case whenever Beijing and Moscow have found themselves together.
Source: RIAN

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