Russia gets China's support for entering WTO

Oct 15, 2004 02:00 AM

by Tschang Chi-Chu

Russian President Vladimir Putin secured a coveted agreement from China to support his country's bid to enter the World Trade Organisation (WTO) on the first day of a three-day state visit to China.
However, it does not look like China will get what it wants from its northern neighbour, namely the construction of a $ 2.5 bn (S$ 4.2 bn) pipeline to transport oil from Siberia directly into China.

Chinese President Hu Jintao met Mr Putin at the Great Hall of the People, where they presided over the signing of a series of agreements on trade, politics and border disputes. Both countries have reached a series of agreements on individual border sections, but a handful of rivers and islands along China's north-eastern border with Russia's Far East had remained in dispute.
Chinese Commerce Minister Bo Xilai and Russia's Economic Development and Trade Minister German Gref signed the agreement with China endorsing Russia's WTO entry.
“We support Russia's entering the WTO and becoming a full member as soon as possible,” Chinese Foreign Ministry spokesman Zhang Qiyue said.

Moscow secured an agreement that Beijing would endorse its bid to enter the WTO during Chinese Premier Wen Jiabao's state visit to Russia earlier. But the formal agreement was not signed until Mr Putin's trip.
“We want to push our relations to a new strategic height. As far as Russia is concerned, this is very important,” the Russian leader told Mr Hu during their meeting. His trip marks the 55th anniversary of Sino-Russian diplomatic ties.

Mr Putin told the Chinese media prior to coming to Beijing that Sino-Russian trade is expected to reach $ 20 bn this year and could triple by 2008. Russia is China's ninth-largest trade partner after Singapore, which racked up $ 15.7 bn in trade last year.
Oil, natural gas and other natural resources account for two-thirds of Russia's exports to China. The torrid economic growth of the world's seventh-largest economy has forced China to import 40 % of its oilthis year. China would like to import more energy resources from Russia, its fourth-largest crude oil exporter, to reduce its reliance on the Middle East. China's top three sources of oil are Iran, Saudi Arabia and Oman.

Accompanying Mr Putin to Beijing was a delegation of Russian business leaders, including Gazprom CEO Alexei Miller. Gazprom, the world's largest natural gas producer, signed a co-operation agreement with China National Petroleum Corporation to study opportunities for supplying gas to China. Russia's gas pipeline network is not linked to China. But the energy project that China covets is a proposed 2,400 km oil pipeline from the Siberian city of Angarsk, which was originally supposed to end in the Daqing oil fields of north-eastern China.
Two years ago, Japan swooped in and offered to invest at least $ 5 bn in Russia's far eastern region if Russia would bypass China and extend the pipeline to Japan instead.

Earlier, Premier Wen pledged to invest $ 12 bn in Russia's energy sector, in the hope of securing a Russian pledge to build a branch of that pipeline into China. The Russian Trade Minister said in Beijing that a decision to build an oil pipeline to Daqing could be reached before the end of this year if the environmental report is ready by then.
Mr Putin had told on the eve of his trip that the final decision would take into account Russia's national interests to develop the country's far east, but Moscow would also “take the interests of our partners into consideration as well”.

Energy experts say his remarks indicate that Russia is still keeping its options open.
“The comments... suggest that he's leaving the door open for the construction of a spur line of the pipeline to the Pacific that would run down into China,” said Mr Julian Lee, senior energy analyst at the Centre for Global Energy Studies in London.
“I think what he's saying is that he prefers the route to the Pacific coast, but that doesn't rule out a line into China as well.”

Source: The Straits Times
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