Russian analyst comments on significance of Putin's visit to China

Text of report by Russian political commentary website Politkom.ru on 26 May

[Commentary by Tatyana Stanovaya: "Putin in China: Turn to East or Diversification?"]

Russian President Vladimir Putin's visit to China took place on 20-21 May; the head of state called the result "fantastic". On the first day of the visit, 43 documents were signed, on the second the main intrigue of the past 10 years was resolved - the signing of a contract between Gazprom and the CNPC on the supply of Russian gas. The visit was of particular significance against the backdrop of the West's return to the policy of "containing" Russia: Moscow is not only seeking an economic but a political union with China, counting on a more equal dialogue with the West as a result.

The key event of Putin's visit was of course the gas contract, on the conclusion of which Gazprom had been conducting negotiations for exactly 10 years. In October 2004, Russia and China signed a framework agreement on strategic cooperation in the gas sphere. For the time being it was a matter of creating a CNPC and Gazprom coordinating committee, which was supposed to work on the issue of supplying gas to China. At that time much more modest aims were set: supplying just 20bn cu.m. of gas a year. However, few people could at that time have forecast that the negotiations would be so protracted.

Thus, under the gas contract signed, Gazprom pledges to supply China with up to 38bn cu.m. a year for 30 years by the eastern route (the total contracted volume comprises 1,032 trillion at a cost of 400bn dollars). The price of the gas, which was the main subject of intrigue and the most contentious element, is not being officially divulged. "It is a commercial secret," Aleksey Miller, the chairman of the board at the Gazprom open joint-stock company, said. According to Aleksandr Medvedev, the deputy chairman of the board at Gazprom, the price may greatly exceed 350 dollars for 1,000 cu.m. According to Russian ministers, it is actually above the lower limit - 350 dollars for 1,000 cu.m. Sources close to the negotiations have told the media that the general bargaining was conducted in the range of 360-400 dollars for 1,000...