A Study of the Catalyst and the Practical Significance of the Energy Cooperation Between China and Russia in the New Period〔*〕

Sun Yang,Du Nini,Yin Lili

(School of Foreign Languages,Southwest Petroleum University,Chengdu　Sichuan　610500)



A Study of the Catalyst and the Practical Significance of the Energy Cooperation Between China and Russia in the New Period〔*〕

Sun Yang,Du Nini,Yin Lili

(School of Foreign Languages,Southwest Petroleum University,ChengduSichuan610500)

Ⅰ.The development and breakthrough of oil and gas cooperation between China and Russia in the new period

Since “China dream” was put forward,the new national leadership have been regarding “Empty talks would lead the country astray,and hard work can rejuvenate the nation” as the guidelines for work,have been carrying forward the spirit of being realistic and pragmatic,and work diligently,have been sparing no efforts to achieve the China dream of great rejuvenation of the Chinese and have made brilliant achievements in politics,economy,culture and energy.China entered a new period of all-round development.

The China-Russia eastern gas pipeline is 3968 kilometers long.The Russian section — “Siberian power pipeline” has officially started.In order to ensure the eastern gas pipelines construction go on smoothly,in October 2014,the two countries signed the agreement on the technique of the eastern gas pipeline construction and operation and the agreement about further strategic cooperation.

As one of China’s four big oil and gas strategic channel — the China-Russia crude oil pipeline (Mohe-Daqing section) has been completed.Soil and water conservation,environmental protection,safety facilities and occupational health protection have been certificated by Ministry of Environment Protection.After the completion of the pipeline,15 million tons of Russia low-freezing-point crude oil is carried to China every year.By the time of July 31,2014,the Mohe-Daqing line normally carries around 46,000 tons of oil a day,adding up to carry 54.68 million tons of Russian oil since it was competed.

With the continuous development of energy cooperation between China and Russia,energy transport has opened a new way.Since the first cargo ship carrying 60 tons of liquefied petroleum gas from Russia arrived at the wharf of Hayu island,Tongjiang city,Heilongjiang province,China has started to transport Russian energy by water transportation.It is also the first time that China transports cross-border liquefied petroleum gas through the border and in-land river.As the traffic volume increases massively,the two countries plan to open the second water energy channel which is from Khabarovsk to Fujin.

Ⅱ.Driving factors in continuous development and breakthrough of Sino-Russia oil & gas cooperation

Cultural cooperation plays a significant role in Sino-Russian relations,which continuously enhances the friendship between the peoples of the two countries and even accelerates the economic development and cultural prosperity of the two countries.〔1〕Cultural cooperation,involving aspects of youth,culture,and health care,is a significant part of Sino-Russian strategic partnership of coordination.

As a kind of deep-going cooperation method with enormous potential,cultural cooperation has promoted people-to-people contacts affected by frequent high-level exchanges of the two countries.Cultural cooperation is an important force to push forward development of bilateral relations.Cultural cooperation,political mutual trust,and Economic and trade cooperation are supplementary to one other and benefit by associating together.〔2〕Closely cultural cooperation has promoted the cooperation and development in energy field between China and Russia and made great contribution to the development of China-Russia comprehensive strategic partnership.

Russia,crowned as “world’s gas station”,is an energy superpower rich in oil and gas resources.Energy is the basis of Russia’s economic development.By 2013,export of oil and gas in Russia accounted for 68% of total export volume.As world’s largest energy consumer,China always has high degree of external dependence on oil and natural gas.By 2013,China has ranked the third largest natural gas consumer in the world.In the perspective of supply and demand,Russia needs to develop its energy sales market and seek countries with stable demand so as to maintain its status of economic power,while China must find countries rich in oil and gas as its partners to solve the problem of lack of oil and gas import sources.Thus,China and Russia can greatly complement each other in the perspective of market supply and demand.

The profound changes of global energy structure brought opportunity for cooperation between China and Russia.Since the international financial crisis,the economy of developed countries,including Europe and America,has gone down,and accordingly,energy demand of these countries has reduced.As the emerging economies have rapid evolution of industrialization,they become the new growth areas for energy demand.With significant increase in energy production in North America,global supply and demand relations in energy have the tendency of oversupply.It has become increasingly obvious that the production of energy is shifting to the west,and the consumption is moving to the east.Now,although Russia is faced with severe challenges,it still has the leading position in non-OPEC producers.At the same time,as a new energy-hungry county,China’s status is still rising.Strengthening the all-round cooperation in energy field between China and Russia not only promotes economic development in both countries,but also plays a leading role in economic and social development in Eurasian region.Besides,China-Russia cooperation in energy field will further enlarge the scale and speed the evolution of energy cooperation in Asian-Pacific region and add new impetus to regional economic and social sustainable development.〔3〕

Ⅲ.China-Russia energy cooperation’s realistic significance for realizing “Chinese Dream”

1.Relieving security risks of energy

徐州市中心医院对住院糖尿病患者在常规治疗和管理方法干预基础上，利用医院-社区分级诊疗平台开展延续性护理，分别于出院后1周护士进行一次电话随访，3个月后对社区卫生服务中心进行督导，6个月、12个月由护士进行门诊、电话或入户等方式进行随访，了解病情变化，血糖控制情况及依从性等。

First of all,energy security is a problem of supply security.With the rapid growth of economy and improvement of people’s living standards,China’s total demand for energy is larger and larger,especially for oil and natural gas.However,China’s oil and natural gas reserve cannot meet the need of its increasing demand so that inadequate energy supply has become a serious bottle neck constraining national economic development.Thus,the major approaches to solve this problem include expanding international cooperation and increasing energy imports.It has been estimated that apparent consumption of natural gas would be 168 billion cubic meters increasing 11.0% year on year and consumption of natural gas would account for 6.3% in primary energy consumption.〔4〕It is clear that to seek stable energy suppliers is one of the long-term strategies for China’s energy security.

Currently,more than 60% of China’s crude oil imports concentrate in Middle East and Africa,most of which are instable regions.Future American foreign policy and territory policy may make the situation in the Middle East worse.〔5〕If the supply places of the energy become too concentrated,the turbulence of these regions may affect the energy supply of demanded countries.Therefore,it is the best way for spreading risk to diversify the supply places of energy.Besides,the political situation in Russia is relatively stable.So China-Russia energy cooperation is in favor of reducing China’s energy dependence on Middle East and North Africa so as to secure China’s energy supply.

Secondly,China imports oil mostly by sea.There are two main marine lanes:one is from Middle East,through Strait of Hormuz (or the Suez Canal — Gulf of Aden) — the Indian Ocean — Strait of Malacca — South China sea — China’s coastal ports;another one is from West Africa — Cape of Good Hope — the Indian Ocean — Strait of Malacca — South China sea — China’s coastal ports.About 4/5 of China’s crude oil is transported through Strait of Malacca.But recent years,the pirates have frequently appeared so that the security situation is not going well.The “Malacca Dilemma” seriously restricts China’s energy security.〔6〕With the unique geographical advantages,China-Russia energy cooperation and construction of oil and gas pipelines on land can not only cut the cost of transport but also lower the risk for transport.

In the sixth conference of Leading Group for Financial and Economic Affairs,president Xi Jinping stressed that China should strengthen international cooperation in all round and achieve energy security under an opening-up condition.Mainly considering the domestic conditions,China should close the international cooperation in various aspects involving energy production and consumption revolution and make effective use of international resources.〔7〕China-Russia energy cooperation has great significance in securing China’s energy safety and realizing “Chinese Dream”.

2.Improving trade cooperation and driving economic development

China-Russia energy cooperation is the leading factor to drive the economic development of both countries since it holds an important position and occupies significant proportion of China-Russia economy and trade.〔8〕The sign of oil and gas contract must promote the development of energy industry including material,equipment,and technology.With the sign of the huge contract of China-Russia natural gas,the natural gas pipeline has begun to construct.China-Russia natural gas pipeline includes two sections,one in Russia and another in China.Its length totals more than 5,000 kilometers,among which the length in Russia is about 2,680 kilometers.In China,the trend of natural gas pipeline is Heihe River — Beijing — Shanghai and the new constructed pipeline length will be about 3,060 kilometers,which will greatly stimulate the development of Chinese tubing,welding,and electroplating so as to accelerate China’s economic development.In addition,Russia needs huge fund and market,and needs great support to its labor power and technology because it is now developing the oil and gas bases in East Siberian and Far East areas.〔9〕As Russia’s neighbor,China not only has unique geographical advantages,but also has sufficient foreign exchange reserve,labor power,advanced drilling and exploration technologies.China-Russia cooperation could promote China-Russia trade cooperation,drive economic development of China,and relieving the Chinese unemployment problem.

3.Improving the international status of RMB

During the Summit of Conference on Interaction and Confidence Building Measures in Asia in May,2014,both China and Russia heads of state jointly announced The Joint Statement of China-Russia Comprehensive Strategic Partnership of Coordination at New Stage.According to this statement,China and Russia will push forward the closely cooperation in financial area including expanding both countries’ local currency direct settlement in China-Russia trade,investment,and loan.And the following sign of huge order on natural gas will push the local currency settlement business into a new stage.Gazprom also plan to settle gas sum with RMB or ruble and will finish the negotiation about being listed in Hong Kong in autumn of 2014.On October 13,2014,Currency Swap Agreement of 150 billion yuan/815 billion rubles was signed between the People’s Bank of China and the Central Bank of the Russia Federation to make bilateral trade and direct investment convenient.On October 15,2015,in the conference of China-Russia Financial Cooperation in China - Russia Expo,35 China-Russia Financial Association participated by 35 financial institutions was formally founded,which would makes it convenient for coalition members to share resources and have cooperation of mutual benefits.

Local currency direct settlement between China and Russia not only can reduce the time cost by US dollar exchange,but also avert the loss caused by fluctuations in the US dollar exchange rate so as to cut the cost of business.Besides,Local currency direct settlement between China and Russia could increase the ratio between RMB and international trade settlement and could speed the pace of internationalization of RMB.It plays an important role in national economic security.

Ⅳ.Conclusion

Since the strategic partnership of coordination between China and Russia has been established in April,1996,when Russian president Yeltsin visited China,the relations of both countries have entered into a rapid and comprehensive stage through the efforts of both countries’ leaders over 18 years common development.Energy cooperation,as the main component of relations of China-Russia strategic partnership of coordination,also tries to go into a higher level.China-Russia energy cooperation has many advantages including relieving China’s potential security of energy,promoting trade cooperation,improving the international status of RMB,driving economic development,and the great significance for realizing “Chines Dream”.

There is a “China Dream” in China while an “Asian Dream” in Russia.Besides,Russia needs the help of China featured prosperous and stable situation while China needs the help of the strong and successful Russia.〔10〕The realization of “China Dream” is closely related with the security of energy and the support from Russia while Russia’s stable economic development needs the help of China because China’s economy is critical for Russia’s economy.To further the comprehensive strategic partnership of coordination between China and Russia is the need for pushing two country’s common development and prosperity,and the necessary choice of development of multi polarization.Therefore,to maintain,develop,and consolidate the sound relations between China and Russia is the historic responsibility shared by both countries.〔11〕

References:

〔1〕Jiang Zhanmin,Facilitation Impact on People’s Friendship between China and Russia Made by People-to-people Exchanges and Cooperation,Journal of Heihe University,2011(6).

〔2〕Liu Yandong,Promote the China-US People-to-people Exchanges and to Build New Power Relations — A Speech in the 3rd Round of China-US High-level Consultation of People-to-people Exchanges,Journal of World Education,2012(5B).

〔3〕Hexun.com.New Factors for Promoting Energy Cooperation between China and Russia,http://opinion.hexun.com/2015-10-20/179963447.html,2015-10-20/2015-11-12.

〔4〕The Oil and Gas Industry Development Report at Home and Abroad 2013,CNPC Economics & Technology Research Institute,2014.

〔5〕〔6〕Experts Discuss Energy Security and New Energy Strategy,China Environment News,2014-07-25.

〔7〕National Energy Administration,Xi Jinping:Actively Promoting Energy Production and Consumption Revolution in China,http://www.nea.gov.cn/2014-06/13/c_133405839.htm,2014-6-13/2014-08-03.

〔8〕Jane Eyre,Practical Significance and Characteristic Analysis of China-Russia Energy Cooperation,Journal of Shaanxi Institute of Technology,2009(3).

〔9〕Zhang Li’ang,Study on Chin-Russia Cooperation in Energy,Jilin:Jilin University of Finance and Economics,2010,p.14.

〔10〕Vladimir Putin,Russia and the Changing World,The Moscow News,2012-02-27.

〔11〕Xi Jinping,Push China-Russia all-round strategic partnership to a New High,Oriental Morning Post,2014-05-20.

On 3,September,2015,China signed more than 20 cooperation agreements,six of which were about oil and gas.This is a breakthrough since the 400 billion natural gas supply deal which was signed in May 2014.These great achievements are inseparable from the continuous efforts of the new generation of collective leadership and multi-level and all-dimensional cooperation under the background of “China dream”.This paper aims to discuss the stimulative factors of the developments and breakthroughs from the aspects of the internal efforts between the two governments and external influences of international environment.Lastly,the paper explores the great significance of energy cooperation between China and Russia to the realization of “China dream”.

“China dream”;energy cooperation;stimulative factors;practical significance

About the author：Sun Yang,dean of School of Foreign Languages at Southwest Petroleum University,research Directions:English pedagogy,Intercultural Communication,Applied Linguistics;Du Nini,postgraduate of School of Foreign Languages at Southwest Petroleum University,research Directions:Intercultural Communication,Applied Linguistics;Yin Lili,Postgraduate of School of Foreign Languages at Southwest Petroleum University,research Directions:Intercultural Communication,Applied Linguistics.

〔*〕This work is supported by Development Research Center of Oil and Gas,Sichuan,China.