https://oilprice.com/Energy/Energy-...ship-with-Russia-is-Beginning-to-Crumble.html China's "No Limits" Friendship with Russia is Beginning to Crumble By Simon Watkins - Jun 17, 2024, 6:00 PM CDT China's economic power and influence have grown significantly compared to Russia. China faces limits in its support for Russia due to Western sanctions and the evolving global geopolitical landscape. The U.S. and its allies express concerns about China's technology transfers to Russia and potential implications for European security and the Middle East. In a joint communiqué on 4 February 2022, China and Russia stated that: “Friendship between the two States [China and Russia] has no limits, there are no forbidden areas of cooperation.” This followed the first in-person meeting between Chinese President Xi Jinping and his Russian counterpart Vladimir Putin for nearly two years, at the opening of the Winter Olympics ceremony in Beijing. Just over two weeks later, Russia invaded Ukraine in what most observers at the time believed would be a conflict lasting two or three days before Putin’s forces secured an easy victory. However, as the fighting continued and became bogged down in fierce urban warfare across several major cities, the first sign emerged that China’s relationship with Russia might not be as limitless as Putin imagined it to be. Xi held urgent talks with Putin and advocated peaceful negotiations between Russia and Ukraine, as analysed in full in my new book on the new global oil market order. At the same time, China’s then-Foreign Minister Wang Yi told senior European officials that China respects countries’ sovereignty, including Ukraine’s. These strong and swift interventions by China shocked Putin, according to a senior Moscow-based source close to the Russian government and another senior source in the European Union’s (E.U.) energy security complex, both exclusively spoken to at the time by OilPrice.com. He had apparently been certain before the invasion that China would stand by Russia whatever it did, in line with the ‘no limit’ friendship joint communiqué. According to the same sources spoken to again by OilPrice.com last week, following new sanctions imposed by the U.S., U.K, and E.U. in recent weeks, with more to come, Putin is facing even more limits on the support he can expect from China. At the most recent meeting between Xi and Putin on 16 May in Beijing, the Russian leader would already have been aware that the power dynamic between the two countries had markedly shifted not just from where it was before China’s rapid economic growth from the mid-1990s but also from where it was even before Russia invaded Ukraine. In economic terms, China’s GDP is now over ten times the size of Russia’s (US$20.2 trillion in 2023 versus US$1.9 trillion). Militarily, Beijing spends nearly three times more than Russia (US$296 billion last year compared to US$109 billion). And politically, China’s degree of influence across the world has continued to expand, most notably through its ‘Belt and Road Initiative’ (BRI) and its now de facto leadership of the Shanghai Cooperation Organization (SCO), as also detailed in my new book on the new global oil market order. The SCO has become the world’s biggest regional organisation both in terms of geographic scope and population, covering 60 percent of the Eurasian continent (the biggest single landmass on Earth), 40 percent of the world’s population, and more than 20 percent of global GDP. The operational scope of the SCO ranges from collective security and military cooperation (in the mould of the North Atlantic Treaty Organization, ‘NATO’) to economic union (in the manner of the European Union ‘EU’). In philosophical terms, the SCO can reasonably be said to still believe in the idea and practice of the ‘multi-polar world’. However, following the economic decline seen in China through its Covid years, and the increased political cohesion between the U.S. and its key security alliance partners in the West and East after Russia’s invasion of Ukraine, Beijing is aware that it must tread lightly in any attempts to challenge the U.S. and the West directly, as also analysed in full in my new book on the new global oil market order. The idea that China will overtake the U.S. as the world’s leading economy by GDP in the next ten years or so now looks increasingly fanciful. Militarily, China also knows that the U.S. has been an economic superpower for well over 100 years, which means that Washington has been spending a lot more money on a lot of things that matter militarily – personnel, technology, communications, global political connections - for a lot longer than Beijing. It has also fought many more wars, giving it much greater operational awareness than China and a command and communications coordination capability far greater than that of either Beijing or Moscow. Even now, the U.S.’s military spending per annum is more than three times that of China’s, at over US$916 billion. In sum, in a direct non-nuclear confrontation with the U.S., the high likelihood is that Beijing would lose, and would lose quickly. Moreover, the ability to date of the U.S. and its allies to leverage their influence in key Middle Eastern states to stop the Israel-Hamas War from escalating across the region – at the same time as supporting Ukraine in its fight against Russia - still shows that the Western alliance can deal with at least two ongoing wars simultaneously. It does not appear out of the question that the alliance could even deal with three such conflicts should China indeed try to invade Taiwan by 2027. Given this and China’s still-vulnerable economy, Putin will likely have been aware that the latest joint communiqué of 17 May 2024 – underlining a “new era” of opposition to the U.S.’s hegemony in several key issues – is just words. In the world of realpolitik, U.S. Secretary of State Antony Blinken made it clear during his recent trip to Beijing that China is “helping fuel the biggest threat” to European security since the Cold War by exporting technology and components essential for Russia’s ongoing conflict in Ukraine. Privately, according to the Russian and E.U. sources spoken to by OilPrice.com, the U.S. has expressed the same concerns about such technology transfers being used by Russia through its Iranian proxies Hamas and Hezbollah in the Middle East. “China’s insistence that these exports are used solely in a regular commercial capacity cuts no ice with anyone, and this is a sharp red line now [for the U.S., U.K., and E.U.,” the E.U. source exclusively told OilPrice.com last week. As part of what will be a laddered approach of escalating sanctions from now on, depending on how China continues to act regarding Russian aggression in Ukraine and the Middle East, is the U.S.’s slew of new sanctions against Beijing and Hong Kong-based banks and companies that work with Moscow in allegedly helping to evade existing sanctions. “The same applies to the new E.U. tariffs on China’s electric-car makers – a major growing part of its economy – and these can be ramped up at any point,” the E.U. source added. These signals of a greater cohesion between the U.S., the other four members of the ‘Five Eyes’ security alliance (the U.K., Australia, New Zealand, and Canada), the E.U., and allies in the East, to act in concert continue to isolate Russia and any country that meaningfully enables it, is likely to see the China-Russia relationship increasingly limited, and favouring Beijing, not Moscow, highlighted the E.U. source. “China wants oil and gas from Russia, which it will continue to get,” he said. “It also wants the yuan to be the key trade currency between the two, which Russia has also now agreed, despite previously wanting a joint rouble-yuan basket structure,” he added. “And China wants the latest military and space technology from Russia, which Moscow had been unwilling to share up until recently, but now it is cooperating with that as well,” he underlined. “Russia, on the other hand, is going to increasingly find that all it gets back from Beijing is money for the oil and gas it supplies, which the U.S. and E.U. is happy enough with for the moment, as it continues to take the edge out of global energy prices,” he concluded.
https://oilprice.com/Latest-Energy-...w-as-Chinese-Firm-Quits-Russian-Projects.html Russia’s LNG Plans Suffer Fresh Blow as Chinese Firm Quits Russian Projects
The Demolition of Russia's Economy topic demonstrates the Demolition of the brains of its active participants.
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This just in. It is reported that 45 countries want to join BRICs. However, the number 1 requirement to joining BRICs is you have not sanctioned any of its members. So, if a country has sanctioned Russia, China or any other BRICs country, you are barred from membership. Now, this would have the effect of making future sanctions imposed by the US and Europe on Russia and China useless because other countries will be less likely to go along and impose those sanctions which could get them banned from ever joining BRICs. Even those that imposed sanctions on Russia and China could very well ask for reconsideration of the ban with the promise of revoking all sanctions imposed and making restitution to Russia and China.
https://oilprice.com/Energy/Natural-Gas/China-Puts-Limits-on-No-Limits-Friendship-With-Russia.html China Puts Limits on 'No-Limits' Friendship' With Russia Gazprom CEO Miller was not a part of the high-profile Russian delegation in the recent visit to China. China seeks hefty discounts on the additional gas supplied through the planned Power of Siberia 2 pipeline. China has signaled it would commit to purchasing just a fraction of the proposed pipeline’s annual capacity of 50 billion cubic meters of natural gas. Vladimir Putin’s touted “friendship without limits” with China has reached at least one limit—Beijing is not committing to a massive new energy project to import Russian pipeline gas unless it’s favorable for the world’s second-largest economy. Russia has been trying for years to get China to commit to a new natural gas pipeline from the massive fields in Western Russia to China via Mongolia. The proposed Power of Siberia 2 pipeline, despite Russian assurances, is nowhere near a concrete commitment from China on the price and volumes at which the Russian gas would be imported. China is negotiating from a position of strength after becoming Russia’s key gas customer and key trade partner in all other areas following Putin’s invasion of Ukraine, which severed decades-long gas supply relations between Russia and Europe. Having lost most of its European market, Russian gas giant Gazprom turned to China to compensate for lost sales volumes. So far, it has failed. The current volumes of gas exports to China cannot offset the lost European sales, while China is exacting a hefty price for planned additional volumes—it seeks huge discounts and has refused to commit to all the volumes that Power of Siberia 2 would offer. Beijing seeks a deal, but not at any price. China has reportedly asked for a price of Russia’s gas close to the heavily subsidized domestic Russian prices, sources with knowledge of the matter told the Financial Times early this month. China has also signaled it would commit to purchasing just a fraction of the proposed pipeline’s annual capacity of 50 billion cubic meters of natural gas, per FT’s sources. Related: Crude, Gasoline Build Weigh on Oil Prices Last month’s visit of Putin to China failed to resolve the issue despite the camaraderie on display. Russia and China expect to finalize soon the preliminary work on the natural gas link Power of Siberia 2 and sign an agreement on the pipeline’s construction, Russian Deputy Prime Minister Alexander Novak said in China. Currently, Russia supplies pipeline gas to China via the Power of Siberia pipeline, one of the biggest projects recently completed by Gazprom and the first conduit for Russian gas to China. Now, there’s talk about the Power of Siberia 2, but negotiations between Russia and China haven’t progressed much, and they certainly didn’t progress during Putin’s visit to China in May. While Putin was in China with Russia’s key energy official Alexander Novak, the chief executive of Gazprom, Alexey Miller, was nowhere to be seen. His absence was “highly symbolic” as his presence would have been crucial for any specific in-depth talks on a Power of Siberia 2 agreement, Tatiana Mitrova, a research fellow at Columbia University’s Center on Global Energy Policy, told FT. Instead, during Putin’s trip to China, Miller visited Iran for high-level meetings with Iranian energy officials, including the petroleum minister of the Islamic Republic. Gazprom has been one of the biggest losers of Putin’s geopolitical choices over the past two years. Russia has seen its gas exports to Europe significantly reduced since the invasion of Ukraine. Before the war, Russia supplied around one-third of all the gas to Europe. Last year, Gazprom’s pipeline gas exports to Europe slumped by 55.6% compared to 2022. As a result, Gazprom booked its first annual net loss in 23 years for 2023, signaling a significant shift in financial performance attributed to dwindling gas shipments to Europe and pricing pressures. The invasion of Ukraine has badly hurt the gas sales and market share of the Russian giant, which may not recover lost sales volumes and revenues for more than a decade, or ever, according to a third-party report commissioned by Gazprom’s executives and reported by the Financial Times earlier this month. Now, Gazprom’s efforts to secure additional sales to China have hit a snag, and China is signaling that it will not be Beijing that will pay the price for Russia’s attempts to boost its gas exports to the East.