A pipeline for prosperity
2003-09-26 China Daily
Russian Prime Minister Mikhail Kasyanov's renewed commitment to the
Russia-China oil-pipeline project clearly underscored the importance his
government attached to the strategic partnership of co-operation between China
and Russia.
Yet, his stopping short of giving a hoped-for nod to the
proposed route indicates that bilateral economic ties might still have to stand
tests before bearing generous fruits.
In the run-up to Kasyanov's two-day
state visit to China, which ended yesterday, the increasingly louder media talk
that the planned route may be blocked and replaced by a rival pipeline,
bypassing China to Russia's Far East port of Nakhodka has caught wide public
attention.
The planned 2,400 kilometre-long Russia-China oil pipeline is
to extend from Russia's Angarsk to Daqing in Northeast China's Heilongjiang
Province.
After years of study and assessment, this project has been
proved realistic and practical.
China National Petroleum Corp and
Russia's private oil producer YUKOS even signed an agreement on the US$2.5
billion project during President Hu Jintao's state visit to Russia in
May.
However, early this month, the Russian Ministry of Natural Resources
disclosed its attempt to veto the Angarsk-Daqing pipeline due to so called
"environmental problems."
Such a turnaround has darkened the prospects
for the project and has sparked wild guesswork from Chinese public.
Under
such circumstances, Kasyanov's reiteration of the Russian side's commitments to
meeting China's needs for petroleum and natural gas for its economic development
at a joint press conference with Chinese Prime Minister Wen Jiabao on Wednesday
is surely welcome.
The pledge not only helps breathe new energy into the
Russian-China pipeline project, but also adds to the momentum both countries are
fostering to expand bilateral trade and economic co-operation.
Bilateral
economic and trade relations have progressed rapidly in recent years, but not as
fast as both countries have hoped.
The trade volume between China and
Russia hit a record high of US$12 billion last year, and is expected to reach
US$14 billion this year.
But the figure should be far more impressive
given the 4,000-odd-kilometre-long border between the two countries and the
huge size and growth potential of both economies.
Now, a common
goal for the two countries is to boost their annual bilateral trade volume to
US$20 billion as early as possible.
As the most important part of
Sino-Russian economic ties, co-operation in energy should be further
strengthened.
The Russia-China pipeline that is expected to pipe 700
million tons of Russian crude in eastern Siberia to Northeast China over 25
years is the would-be largest bilateral trade deal between the two
countries.
Undoubtedly, smooth implementation of such a giant project
will contribute significantly to the further expansion of trade ties between the
two countries.
Nevertheless, a conspicuous lack of an explicit go-ahead
for the Angarsk-Daqing pipeline from the Russian side bears testimony to the
problems yet to be ironed out in the way of broader bilateral economic
ties.
One ostensible cause of the current stalemate centring on the
Russia-China pipeline project is Japan's hard lobbying for a pipeline stretching
to Nakhodka.
The lure of the latter option includes not only Japan's
ample funding, but also a diversified demand side composed of rich
nations.
But the underlying reason behind the abrupt change of attitude
toward the Russia-China pipeline project may lie with scepticism on the part of
certain Russian factions toward China's future growth and behaviour.
Not
to mention apparent technical problems like inadequate oil supplies to support
the other route which also faces environmental problems, opponents of the
Russia-China pipeline have unfortunately failed to come to grips with the trend
of regional economic development.
Those concerns over the pricing issue
of a one-buyer project are reasonable as business considerations, but not
pertinent to the reality of bilateral ties between China and
Russia.
China, one of the world's largest oil consumers, has a huge stake
in reducing its dependence on the turbulent Middle Eastern oil supply. Russia,
one of the world's largest oil producers, can help satisfy China's growing
energy needs.
It is estimated that, according to China's ambition to
quadruple its gross domestic production in two decades, its oil consumption will
exceed 400 million tons by 2020, with import oil accounting for half of
that.
In addition to its huge need for oil imports, the robust growth of
the Chinese economy and earnest fulfilment of its commitments to the World Trade
Organization (WTO) all guarantee that China will be an accountable buyer for
Russian oil.
With Russia standing on the threshold of the WTO, both
countries should make the most of their bilateral ties to serve each other's
interests.
The current scheme means more than a symbol of the two
countries' "strategic partnership of co-operation." It will also play a
substantial role in fuelling China's latest campaign to revive its Northeastern
industrial base as well Russia's development of its Far East
region |