David Brancaccio: Russia’s President Putin is in China today, where the two countries shared position on Syria will likely get the headlines. But there will be much talk about trade between the countries, which swelled to $84 billion last year. Russia is especially vulnerable when the economies of both Europe and/or China slow down.
Peter Van Dyk joins us now from Moscow to talk about Putin’s meeting. Peter, good morning.
Peter Van Dyk: Good morning, David.
Brancaccio: Russia clearly has lots oil and natural gas. China needs this type of energy to grow — is that a focus of the talks?
Van Dyk: That is definitely one of the focuses of the talks. But not just energy because of course Russia wants to modernize its economy and it doesn’t just want to be a raw material exporter. So we are expecting some deals to be announced, including perhaps an investment vehicle worth about $2 billion set up by the two countries’ state investment funds. And also possibly, the announcement that they will form a joint venture to create a new long-haul airliner to rival Boeing and Airbus.
Brancaccio: But there were reports of maybe some kind of deal involving Russian natural gas.
Van Dyk: That’s right. That is something that the two sides have been haggling over for a long time. And unfortunately for Russia, it seems they are going to continue haggling. What we’re hearing is that there won’t be an announcement. China doesn’t want to pay the price that Russia wants it to pay, and by now, it looks like, according to Mikhail Krutikhin, of RusEnergy consultancy in Moscow, that a deal on this may never be done.
Mikhail Krutikhin: The Chinese do not need Russian gas. They are satisfying their own demand.
Van Dyk: And they are satisfying their own demand by increasing their own domestic production through the techniques we’ve seen in the U.S., and because China is so economically powerful, it can strike these deals with other countries and its economic might is something that concerns Russia.
Brancaccio: Peter Van Dyk in Moscow, thank you very much.
Van Dyk: You’re welcome, David.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.