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October 14, 2009

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China, Russia sign huge trade deals

CHINA and Russia bolstered their relationship yesterday when visiting Russian Prime Minister Vladimir Putin ushered through a tentative gas supply agreement and deals worth US$3.5 billion.

While Putin's talks with Premier Wen Jiabao also covered international hotspots on which the countries share many views, they focused on nurturing ties in trade and energy.

The centerpiece of the day was a preliminary agreement on Russian state-run gas giant Gazprom supplying China National Petroleum Corp.

"China is a colossal market. The diversification of supplies is a very important direction for Gazprom," Putin told reporters in Beijing after his talks with Wen.

"Our cooperation is growing in many ways: mining, joint work on pipelines, oil supplies and in the future, possibly, gas."

Gazprom Chief Executive Alexei Miller told reporters the deal could open the way to Russia, the world's biggest natural gas producer, supplying 70 billion cubic meters per year to China from Siberia and the Russian Far East, including Sakhalin.

This could make China the biggest buyer of Russia's natural gas, overtaking Germany, which imported around 37 billion cubic meters last year.

Russia's senior energy official, Deputy Prime Minister Igor Sechin, said gas deliveries could begin in 2014 or 2015, and that pricing issues could be decided at the start of 2010. Chinese and Russian companies also signed deals worth US$3.5 billion yesterday, the second day of Putin's visit to Beijing.

They included at least US$1.7 billion in loans from Chinese banks to Russian banks, among them a US$500 million loan from the Agricultural Bank of China to No. 2 Russian bank VTB.

Russian oil industry leader Rosneft and CNPC will build a refinery 100 kilometers from Beijing and plan to open 300 to 500 gasoline filling stations in China, Sechin said.

Wen hosted a welcome ceremony for Putin at the Great Hall of the People before their private talks and a larger session involving ministerial officials from both sides.

At the start of the larger session, Wen said bilateral relations have become stable and mature since the forging of diplomatic ties 60 years ago and particularly since the establishment of the Russia-China strategic cooperative partnership in 1996.

Sino-Russian relations are role models for relations between neighboring countries and relations between big powers, said Wen, adding that China is willing to work with Russia to make greater achievements in the future.

Putin said Russia-China cooperation is one of the most important cornerstones of world stability.

Putin said such cooperation played an important role in resolving a series of sensitive international issues and in safeguarding world peace and development.

"Both China and Russia have very peaceful foreign policies. We are not fighting wars anywhere. We don't have troops deployed overseas," Putin said. "The joint position of Russia and China on some issues restrains some of our hot-headed colleagues."

Later yesterday, Wen and Putin met with the businesspeople who attended a China-Russia economic forum.

"China-Russia trade has seen fruitful results and brought tangible benefits to the two countries," Wen said.

Wen said he hoped the businesspeople from the two countries would seize the opportunity to make joint efforts to tackle the global economic downturn.


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