The Asia-Pacific Economic Cooperation summit
Russia and China are getting cozier, and it could spell bad news for the West.
Bloomberg reported Monday that the two powers had signed a second energy deal, one that was nearly as large as the $400 billion deal Russia and China reached earlier this year.
The accord came as President Barack Obama arrived in Beijing for the Asia-Pacific Economic Cooperation summit, and some are speculating that the deal is part of a concerted effort by Russia and China to undermine the strength of the U.S. dollar and its role as an international currency.
Russia’s economy has been hurt by U.S.-led Western sanctions following the Russian annexation of Crimea earlier this year, but the gas deal cements the fact that, while Russia may not be able to freely trade with Western neighbors, it has a close friend and eager buyer in the east — one that can help mitigate the impact of sanctions.
The deal, negotiated by Russian oil firm OAO Gazprom, will pump as much as 30 billion cubic meters of gas annually from western Siberia into China over the next three decades, which would put China in the spot currently occupied by Germany: Russia’s biggest gas market.
The dollar is often used to facilitate international trade, but in this energy deal, that won’t be the case.
According to the Moscow Times, Putin pledged to cut the dollar out of energy trade with China.
