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China, Russia set to ink slew of contracts

By Zhang Xin (China Daily)
Updated: 2009-10-13 07:58

Nearly three-dozen deals worth more than $5.5 billion combined are expected to be signed between China and Russia during Prime Minister Vladimir Putin's visit to Beijing, possibly including a major refinery in Tianjin.

The Sino-Russian contracts involve a range of industries, from energy, transportation, mining, to finance and telecom.

Chinese observers hailed the deepening economic bonds between the two countries, which formed an economic partnership in 1996.

"China and Russia are strategic cooperative partners and the partnership in many aspects, particularly in economy, has reached high levels in recent years," said Yu Sui, researcher with the Beijing-based Research Center of Contemporary World.

The slew of contracts comes after it was reported that China is expected to sign a gas deal with the world's top gas exporter.

Gazprom, the world's largest producer of natural gas, was expected to sign a supplement agreement on energy with China National Petroleum Corporation to increase natural gas exports to China.

The trade volume between the two countries soared to $56.83 billion in 2008 from $9.3 billion in 2002, a six-fold increase in six years.

Cooperation involving energy, including nuclear power, has become "high on the agenda" for the China-Russia partnership, said Tan Jijun, an expert with Beijing-based China Foreign Affairs University.

China and Russia, the world's third- and ninth-largest economies, signed a package of deals earlier this year, highlighted by a pipeline construction project, a long-term crude oil trading deal and a financing plan. In June, a memorandum on delivery of Russian natural gas to China was also signed.

The Sino-Russian crude oil pipeline is expected to wrap up next year and will start the supply in 2011, according to Xinhua.

Chinese media also reported a contract to build a joint venture refinery in the northern city of Tianjin is to be signed.

During Putin's visit, Russia's diversified holding company JSFC Sistema will sign a $200 million deal with the Bank of China and telecom equipment maker ZTE Corp, while China National Materials (Sinoma) and investment holding company CNBM will sign four cement production facilities construction deals with Russian cement maker Eurocement.

"Facing the financial crisis, Russia is particularly eager to develop its trade and business with China in a wide range of areas, including not only the energy cooperation but also in the high-tech sector," Tan said.

He said a deal on building a high-speed railway in Russia, which is expected to be signed during Putin's visit, was an example of the two nations' cooperation beyond energy.

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Li Fenglin, director of Euro-Asia Social Development Research Center under the State Council Development Research Center, said China and Russia have great potential in expanding economic cooperation from energy to many other areas such as technology and investment. Li is the former Chinese ambassador to Russia.

Putin's visit marks the 60th anniversary of diplomatic relations between the two nations.

He will leave tomorrow after attending the 14th regular meeting of prime ministers of Russia and China today, and a summit of prime ministers from the Shanghai Cooperation Organization tomorrow.