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. Last Updated: 07/27/2016

Putin Takes 800 People to China

ReutersA man passing Moscow, a Russian restaurant, in Beijing on Monday.
President Vladimir Putin headed to Beijing on Monday for two days of visits with Chinese President Hu Jintao, who was expected to press for elusive energy guarantees to feed his country's superheated economy as China kicks off its "Year of Russia."

With Chinese energy consumption skyrocketing and Russia's vast oil and gas resources right next door, "cooperation in the energy sphere is one of the most important elements of Russian-Chinese trade and economic relations," Putin said in an interview on the eve of the trip. "I believe that it is growing successfully and has good potential in the long term."

Putin is being accompanied by a delegation of about 800 people -- "the most significant delegation in the history of Russian-Chinese relations," said Sergei Sanakoyev, head of the Russian-Chinese Center for Trade and Economic Cooperation.

"I've been on the inside of this relationship from 1996, a member of all the summits of heads of government since then, and I have never seen things like I'm seeing right now," Sanakoyev said by telephone from Beijing on Monday night.

Accompanying the president are Deputy Prime Minister Dmitry Medvedev, Foreign Minister Sergei Lavrov, Industry and Energy Minister Viktor Khristenko and Federal Atomic Energy Agency chief Sergei Kiriyenko, as well as a host of business leaders and cultural figures.

In all, about 30 documents are expected to be signed during the visit, including oil and other business contracts and government partnership agreements.

Rising Russian oil exports to China accounted for a big chunk of the $29 billion trade turnover between the two countries in 2005, a 37 percent increase over 2004. The figure is expected to reach $60 billion to $80 billion by 2010.

But agreements to boost energy supplies have come far more slowly than the Chinese would like. Putin's delegation, which includes top executives from state oil company Rosneft, pipeline monopoly Transneft and gas monopoly Gazprom, was expected to face pressure for concrete action in meetings with Chinese political and business leaders on Tuesday and Wednesday.

China's chief priority is getting Russia to build a branch of its planned Eastern Siberia-Pacific Ocean oil pipeline to China, analysts said. Former oil major Yukos, which announced the pipeline project in 2003 before coming under legal assault by the government, planned to build the pipeline to the northeastern Chinese city of Daqing. The Russian government later rerouted the pipeline to the Russian port of Perevoznaya Bay, giving it broader access to Japan and other Asian markets.

Chen Geng, chairman of energy giant China National Petroleum Corp., or CNPC, told reporters Monday that he expected to sign a document with Transneft on Tuesday about the investment feasibility of building a branch of the Eastern Siberia-Pacific Ocean pipeline to China. "We are completely confident that the branch will be built," Chen said, Interfax reported.



Nir Elias / Reuters

A Su-27 from the Russian Knights aerobatic team performing Sunday near Tianmen Cave in China's Hunan province.

Currently, all Russian oil reaches China by rail, which is both more costly than pipeline transit and limited by railway capacity. Russian Railways, or RZD, delivered 7.7 million tons of oil to China last year, representing about 6 percent of China's total oil consumption. RZD is spending 10 billion rubles ($362 million) to expand its transport capacity to China, company president Vladimir Yakunin said last week.

CNPC also expects to sign a partnership agreement with Rosneft on joint oil projects and a memorandum of understanding with Gazprom on future deliveries of Russian gas to China during Putin's visit, Interfax reported.

The growing importance of bilateral relations -- and perhaps a hint of mutual infatuation -- was evident in extravagant ceremonies that opened the yearlong cultural and diplomatic exchange, including an air show this weekend in which Chinese citizens paid up to $840 to watch Sukhoi fighter jets fly through a cave in Hunan province.

Members of the Maly Theater kicked off a 10-day Chinese tour in Beijing on Monday. Similar tours by the Bolshoi, Mariinsky and Stanislavsky and Nemirovich-Danchenko theaters are planned for later this year.

Behind the pomp of China's "Year of Russia" and talk of broad cooperation, the two countries still approach each other cautiously -- something Putin acknowledged in the pre-trip interview.

"I'll say it openly: Our impressions about each other are still to a large degree based on the experiences of the past," Putin told a Chinese news agency, referring to Cold War tensions and border clashes.

"This is why is it's so important for the populations of our two countries to come to know the life of the new Russia and the new China more closely," he said, according to a transcript published on the Kremlin's web site.

Complicating major energy deals is the fact that "Russia seems to like sitting in the position of deciding which partner it wants to have. ... When it makes a firm commitment, that seems to put it in a weak position," said Roland Nash, chief strategist at Renaissance Capital.

One clear accord between the two countries -- and a theme already circulating in Beijing on Monday night -- is joint opposition to a unipolar, U.S.-dominated world, Sanakoyev said.



Mikhail Metzel / AP

A policeman standing by a "Year of Russia" banner in Beijing on Monday.

"It's a very relevant theme, and it's certainly being sounded here on an informal level," Sanakoyev said. "There is a sense that world domination should be opposed."

Putin's current visit comes at a sensitive moment for U.S.-Chinese relations, with Hu set to visit the United States in April and pressure growing in Congress to punish China over what several U.S. senators call unfair trade practices.

Two senators, Democrat Charles Schumer and Republican Lindsey Graham, were in Beijing on Sunday to pressure China to revalue its currency, the yuan, or face steep import tariffs on its goods.

"I think it's a dangerous game the U.S. is playing," Nash said. "The more pressure the U.S. puts on China -- and Russia for that matter -- the easier it is for them to turn to each other and away from the U.S."

Putin and Hu signed a joint declaration last July that was seen as a veiled condemnation of American foreign policy. A month later, Russia and China held major joint military exercises that numerous commentators saw as an indirect warning to the United States.