Russia and China sign 100-billion-dollar deal of the century. Pravda.ru-June 18, 2009. A new deal between Russia and China in the sum of about $100 billion became the largest deal that has ever been signed between the two countries, Russian President Dmitry Medvedev said as a result of the meeting with his Chinese counterpart Hu Jintao. The two presidents signed a large package of documents, including those in the oil and gas industry, in Moscow. “It became possible owing to the use of the mechanism that we invented with the leader of the People’s Republic of China a year ago,” Medvedev said. Dmitry Medvedev and Hu Jintao conducted negotiations about the shipments of Russia’s natural gas to China. The presidents signed the Memorandum About Mutual Understanding on the Cooperation in the Field of Natural Gas.” It is an open secret that China suffers from the shortage of natural gas. The talks between the two countries about the deliveries of Russian gas to China last for several years already. Moscow was not satisfied with the conditions, which Beijing proposed for cooperation: the prices in question are a lot lower than those, which Russia has with its gas contracts in Europe. If China is willing to purchase large quantities of Russian gas, it will be necessary to build a new gas pipeline. A senior official of Russia’s gas monopolist, Gazprom, said that it did not go about the deliveries of natural gas to China in 2011. The two countries still negotiate the prices. Russia currently runs the Eastern Gas Program in the Far East and in Siberia. The program was developed with an intention to supply oil and gas to the Asian-Pacific region, including China , RIA Novosti news agency reports.
Russia and China are working on a possibility to use rubles and yuans in their mutual settlements !!!, Vice Prime Minister of the Russian government, Igor Sechin said.
China makes a choice in Iran (By Francesco Sisci) BEIJING - A movie recently released in China, The Empire of Silver by Guo Taiming, describes the cunningness, betrayals, fights, tribulations and passions accompanying Chinese traders' earnings and fortunes along the Silk Road. Their monumental mansions, still standing in modern Shanxi around the city of Pingyao, are a testament to the wealth they managed to accumulate. Pingyao itself, now a nearly god-forsaken town a few kilometers away from the sands of the desert, is being celebrated in China as the former capital of Chinese finance. It is the place where the hallmarks of contemporary monetary flow, such as checks and banknotes, were first invented and used. The history of Pingyao proves how China felt and still feels about the stability of the Silk Road. Now most of China's trade moves from the coast and not, as it did until about 150 years ago, across the continental route stretching through Central Asia and Iran. These lands were not just distant pieces in a game of geopolitical dominos or uncertain suppliers of fuel and raw materials. They were part of the bloodline that China could not control militarily - unlike the modern American sea lanes - but that were crucial for a good part of the Chinese economy. Thus, Chinese diplomacy and silver helped to stabilize the areas, no matter what. The flow of goods was ultimately what was important for Pingyao, not the particular political settlement in, say, Iran. That history resonates in the Chinese thinking about political upheavals in Iran in today. Immediately after the results of the recent Iranian elections were announced, Chinese experts smelled foul play. In a modern country, with electronic devices and spotless organization, it could take days to have the final results. In Iran, with a largely primitive organization and little or no electronic network, the top leaders announced the victory of incumbent president Mahmud Ahmadinejad just two hours after the polls closed. Moreover, random investigations and inquiries suggested that Ahmadinejad was actually third in the polls, after Mir Hussein Mousavi, a native of the East Azarbaijan province, and even after the other reform candidate, Mehdi Karroubi. According to the official results, Mousavi was beaten even in his home villages, among strongly clannish Azars, and some areas had 140% voter turnout. These are the reasons why at the beginning of last week, Chinese papers heaped criticism and derision on Ahmadinejad and Supreme Leader Ayatollah Ali Khamenei, his political patron and Iran's top leader, for their alleged victory with an astounding 71% of the total vote. The papers got a free hand on that because even China's top decision-makers thought Ahmadinejad had gone too far. Yet, within a few days, it was also clear that the official results would not be turned down. Khamenei ordered a recount of some of the vote, which confirmed the original numbers. Pro-Mousavi demonstrators could take to the streets and could also hope to storm Tehran, home of about one-sixth of Iran's population, but they could not hope to topple Ahmadinejad without a violent confrontation. The president controls the army and, most importantly, the vast network of the Iranian Revolutionary Guards Corps, which has vested interests in preserving Iran's status quo. And after all, now as in the times of The Empire of Silver, the status quo is also Beijing's political mantra. China is extremely concerned about the political stability along its borders because it is the one thing that could undermine the domestic stability necessary to carry on its reform and modernization program. Chaos in Iran then looks particularly dangerous. Iraq is in chaos; Afghanistan needs more soldiers, ie, more military activities; the Taliban are wresting political power in Pakistan; and the Kashmir region, between Pakistan and India, is still a powder keg. If Iran spirals into a new revolution or a civil war, neighboring Pakistan could soon follow, and in either case, political calm could be restored only at the price of violent crackdowns, condoned in Pakistan (where the government is pro-Western) and opposed in Iran (with anti-Western leaders). India would be hardly spared its share of troubles, with its large and restive Muslim minority. Its financial center in Mumbai, next to Pakistan and with large Muslim shantytowns, could again be attacked by terrorists. China would be in a state of alarm. Its Muslim region of Xinjiang, with an uneasy, pro-independence Uighur minority (a Turkic-speaking people), could be inspired to spark anew their protests. In any event, the whole region could soon be in flames. Oil prices could then spike again, as chaos in Iran threatens the security of the Gulf and the Arabian Peninsula. The Iraqi war could soon pale in comparison to the nightmare starting in Iran. Furthermore, inspired by Iran, North Korea could also try its hand at stirring chaos, perhaps winning new and dangerous benefits from the six-party talks, with governments too worried about Iran to have time to be fussy about concessions to Pyongyang. Against this background, China, in a June 18 editorial in the official English-language China Daily, wished for peace to soon be restored in Tehran and encouraged the US to not be tempted to push a new "color" revolution in Iran. China has a further political calculus. If Ahmadinejad, already domestically weak, were to emerge from elections that everybody knows he lost and to come to the fore to speak about Iran's nuclear program, he may be very vulnerable and thus willing to accommodate foreign requests. Conversely, if someone else, perhaps Mousavi, surfaces out of the ongoing demonstrations, he will have strong popular support and thus might be unwilling to make concessions on something considered a matter of national security and pride: Iran's nuclear program. Beijing makes political calculations on the basis of an ongoing, growing political and economic relationship, providing leverage with the incumbent president. In America, cut off from Iran for 30 years, there is no political relationship to speak of, and thus there is no leverage, either. It is easy for China to think of doing business with the existing man, Ahmadinejad, and for America, trusting no one, it is easy to bet on Mousavi, the new man - he could hardly be worse than the present one for Washington. Furthermore, the United States may think that as long as protests go on in Tehran, the Israeli pressure for a troublesome air strike against Iranian nuclear facilities can be put off. Strategically, the world, already in the middle of a grave economic crisis, can hardly spare the time and energy to cope with the expansion of the present geopolitical crisis, which already stretches from Iraq to Pakistan. This is in favor of China's interest for the status quo. Tactically, however, China's hopes for a quick, peaceful solution could be dashed. Despite all calculations, historical processes and protests have a way of developing independent of cold political scheming. Certainly, when the popular mood is hot, as in Iran now, it is easier to fan the flames of discontent than to try dousing them. This could bring trouble to China, but few others would be spared.
Francesco Sisci, Asia Editor of La Stampa