With the Winter Olympics now underway, all eyes are fixed on the competing athletes as they take to the ice and snow. But amid the dazzling displays of athletic prowess, significant developments have simultaneously taken place on the diplomatic sidelines of the Games.
Russian President Vladimir Putin, who arrived in Beijing last Friday ahead of the opening ceremony of the Winter Games, met his Chinese counterpart, Xi Jinping, marking their first in-person encounter in two years, ostensibly due to Xi’s self-imposed travel restriction amid the coronavirus pandemic. The talks,
described by Chinese Vice Foreign Minister Le Yucheng as “very successful,”
ended with a joint statement and a series of agreements to deepen cooperation in the areas of sports, energy, commerce and trade, signifying a potential convergence between China and Russia amid tensions with the United States and Europe.
The most attention-grabbing outcome of the meeting was the announcement of a 30-year deal to supply 10 billion cubic meters of Russian natural gas
per year to China via a new pipeline from Russia’s Far East. The deal marks the second long-term agreement Gazprom has signed with the state-owned China National Petroleum Corporation, or CNPC, and will ultimately increase the total amount the Russian energy giant supplies to China to 48 bcm per year.
“Our oilmen have prepared very good new solutions on hydrocarbon supplies to the People’s Republic of China,” Putin said at the meeting. “And a step forward was made in the gas industry,” he added, referring to the Gazprom agreement, reported to be worth an estimated $117.5 billion.
The contract is “indicative of the exceptionally strong mutual trust and partnership between our countries and companies,” Gazprom CEO Alexey Miller said in a statement
Natural gas represents an attractive alternative energy source for Beijing, which has pledged to achieve carbon neutrality by 2060. China’s heavy dependence on coal came into sharp focus last year, when parts of the country suffered blackouts and factory shutdowns due to coal supply disruptions, which many observers suggest explains part of Beijing’s interest in natural gas. “China’s coal shortage last year served as another wake-up call that natural gas has its special value,” a Beijing-based industry official, who asked not to be named, told Euractiv
. “That’s why CNPC decided to top up with the new pipeline deal.”
Though 10 bcm of natural gas is a modest amount for China, the world’s biggest energy consumer, the latest deal gives Beijing access to relatively cheap supplies from a nearby source. It also helps mitigate China’s exposure to the volatility of liquefied natural gas, or LNG, markets, Marco Giuli, an analyst at the Brussels Governance School at the Free University of Brussels, told World Politics Review.
Giuli added that the long-term deal could also pave the way for the development of the Sakhalin 3 field in Russia’s Far East as well as further supplies through other routes, including the Power of Siberia and the Sakhalin-Vostok pipeline systems. Gazprom is already in talks with China over more gas supplies via the so-called Power of Siberia 2, which could add another 50 bcm per year to Russia’s eastbound gas exports, Bloomberg reported
“The economic relations of China and Russia, in particular in the energy field, have been growing in the last years. The deal is a further step in this direction,” Giuli further added. Friday’s announcement helps Russia—which is already Beijing’s third-largest supplier of natural gas—strengthen the commercial prospects of its Far Eastern supplies and consolidate Russia’s leading position in China’s fast-growing gas market.
While both sides stand to gain from the deal, China appears to have had more leverage in the negotiations. The first deal between the two countries, a $400-billion landmark agreement signed in 2014
, came as the Kremlin courted Asian partners amid pressure due to economic sanctions imposed by the European Union and the U.S. over Moscow’s annexation of Ukraine’s Crimea peninsula. Similarly, the latest deal was signed as Russia faces off with the West again over Ukraine
—where more than 100,000 Russian troops remain positioned near the country’s border—and is seeking to reduce its dependence on European customers.
Notably, the gas deal will be settled in euros, as Moscow seeks to get around potential sanctions from Washington that U.S. President Joe Biden has threatened to impose in the event of an invasion of Ukraine. “China has always exercised strategic patience, postponing agreements and only agreeing when in a position of strength,” said Guili. “This approach resulted in favorable price conditions for China.”
The two leaders also announced agreements last week on oil deliveries and the lifting of a trade restriction on grain, further demonstrating the strength of their countries’ partnership. Those deals may even be of more economic significance. But as Guili noted, because of the pipeline infrastructure that gas deals involve, they “typically entrench partners in long-term interdependence, and once built up, cannot be easily undone.”
In Other News
The divergent fates of two U.S.-born athletes representing China
in the Winter Olympic Games underscores the tightrope athletes in similar circumstances must walk amid escalating strategic competition between Beijing and Washington, as well as the fickleness of their fans. Viewers across China erupted in online celebration after Eileen Gu clinched the first Women’s Freeski Big Air gold medal last Tuesday. Speaking to the press afterward, the 18-year-old dodged questions about whether she renounced her U.S. citizenship
to comply with China’s ban on dual nationality. On the other hand, figure skater Zhu Yi, who was born and raised in California and renounced her U.S. citizenship in 2018 in order to compete for China, came under fire after she fell twice during Monday’s team competition free skate
—after also falling the previous day in her short program. Zhu has since been on the receiving end of a backlash from Chinese fans, with many questioning why she was chosen to compete over Chinese-born athletes.
Tennis star Peng Shuai announced her retirement in a carefully managed interview with French sports outlet, L'Équipe—her first media engagement with a foreign outlet since the international outcry over her brief disappearance after she accused a top Chinese Communist Party official of sexual harassment. “My sentimental problems, my private life, should not be involved in sports and politics,” the former world champion said in the interview, which was conducted at a Beijing hotel housing the Chinese Olympic Committee, or COC, in the presence of Wang Kan, COC’s chief of staff.
Worth a Read
Thousands of Uyghur children have been forcibly separated from their parents
and sent to state-run boarding schools under China’s brutal repression of ethnic minorities in Xinjiang. In a report for National Public Radio, Emily Feng and Abduweli Ayup spoke to two children who were sent to state boarding schools at ages 4 and 6 after their mother was arrested by authorities in February 2018. They were eventually reunited in 2019 with their father in Turkey, after his repeated petitions to Turkish government ministers led Ankara to intervene. But by that point, the children could no longer speak their mother tongues, Turkish and Uyghur. They recalled having their heads shaved, being hit by class monitors and teachers, locked in dark rooms and forced to hold stress positions as punishment. “It really is an effort to try to make everyone Chinese and see themselves as Chinese and have a single cultural background,” said James Millward, a professor at Georgetown University.
China Note-Taker is writing anonymously for reasons of personal security.