Tag Archives: Russia

When Will China Get A FIFA World Cup?

Where does FIFA’s award of the World Cup to Russia in 2018 and Qatar in 2022 leave China’s possible aspirations to host the 2026 tournament? We noted in July that the Chinese Football Association was considering the feasibility of a bid for 2026, despite its current tribulations and China’s relatively lowly standing in the football world. The CFA’s head, Wei Di, has now repeated that he favors China giving it a go.

In one sense both awards should give the Wei some encouragement. FIFA set great store in hosting its World Cups in countries where the tournament will give a boost to the game. Russia is a footballing power of long standing, but its football infrastructure is woefully antiquated and will need a thorough overhaul. Qatar, on the other hand, ranks even lower than China as a footballing nation, but bears the standard for the Middle East, a region that hitherto has not hosted the tournament.

FIFA’s informal continental rotation meant the 2022 tournament was always going to be awarded to an Asian nation. That is went to West Asia, and not to South Korea, Australia or Japan, the three other contenders, may leave the door open for an Asia-Pacific nation in 2026. Two East Asian World Cups in succession would have been out of the question.

Beijing hosted the 2008 Olympics with spectacular success, so FIFA should have little doubt that China can pull off staging its flagship event. The question will be is 2026 the right moment to endorse a world power that is not as yet a footballing one. While it is way to early to say, FIFA may first prefer to give a boost to the game in another Asia-Pacific nation, the U.S., and have China bide its time until 2030.

 

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No Time To Buy Time On The Korean Peninsula

When you don’t know what to do with a problem, punting it to a committee is usually  a safe option. It buys time to come up with an answer if nothing else. That is what China has done with North Korea’s most recent outburst of belligerency in calling for international six-party “emergency talks” to be held in Beijing in early December.

The six would be the same sextet that have been fitfully trying to deal with Pyongyang’s nuclear program — the two Koreas, the U.S., Russia, Japan and China. Those talks have been stalled since April, 2009. Neither South Korea nor Japan have shown much enthusiasm for going along with China’s latest proposal; the U.S. and Russia are still to be heard from, but are likely to be as non-committal.

Meanwhile, the chairman of North Korea’s parliament, who is close to his country’s leader, Kim Jong Il, has been invited to Beijing next week. With the four days of joint U.S.-South Korea naval exercises now underway in the Yellow Sea and North Korea, according to South Korean press reports, deploying surface-to-surface missiles on launch pads in the Yellow Sea and readying land-based surface-to-air missiles, a bit of firm two-party talking between China and North Korea might be the most effective — and most needed — emergency diplomacy.

 

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China Looking To Buy More Russian Energy On The Cheap

Russia’s president, Dmitry Medvedev, is due in Beijing at the start of next week for a state visit during which energy deals between the two countries will be on the agenda, particularly kicking on a stalled long-term deal for Russia to supply China with natural gas. The two countries are already striking deals on several energy fronts — coal, oil, atomic power and renewable energies, as well as natural gas — as Moscow seeks to expand its sales to what is now the world’s largest energy consumer and Beijing seeks stable long-term supplies to meet its needs.

At the end of August, a Chinese spur to Russia’s Siberian Pacific Ocean pipeline was completed, part of a 20-year $25 billion loans-for-oil deal between struck in 2008 between China National Petroleum Corporation (CNPC) and Russia’s largest oil company, Rosneft, and its largest pipeline operator, Transneft. Earlier last month, China said it would  lend Russia an additional $6 billion repayable in increased coal supplies over the next 25 years. This week, Russia’s Deputy Prime Minister Igor Sechin has been in Tianjin for an annual bilateral meeting on energy, during which three specific oil and coal deals were signed.

Sechin and his Chinese counterpart, Vice-Premier Wang Qishan, also found time to attend  a foundation-laying ceremony for the centerpiece of the oil deal, a new $5 billion joint venture refinery that will be 49% owned by Rosneft, 51% by CNPC. Rosneft will supply some two-thirds of the 10 million metric tons of crude a year that will be processed  by the Tianjin refinery. This will be the first time a foreign oil company has had such a significant presence this far downstream in the Chinese oil industry, and that will be extended in a planned second stage of at least 500 retail gas stations in China.

The 2008 loans-for-oil deal lets China import 300,000 barrels a day of Russian oil for 20 years starting in 2011 on pricing terms favorable to the Chinese side. Russia is hoping that any natural gas deal it can strike during Medvedev’s visit won’t be so one-sided, though the precedents aren’t encouraging. Late last year, tentative agreement was reached to build two gas pipelines with the capacity to deliver 68 billion cubic meters of Russian natural gas per year, but pricing issued have stalled further progress on a delivery contract for the natural gas. Medvedev is likely to propose a scaled back deal to supply 30 billion cubic meters per year. Given the competition from Central Asian natural gas, he may not be able to make much headway on getting Beijing to pay anything approaching market prices, but even getting the negotiations going again would be progress.

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Russia Looks East To China’s Energy Markets

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The oil pipeline from Siberia to Skovorodino on the Chinese border that Russia’s prime minister, Vladimir Putin, opened on Sunday, is a further sign of how Russia, like everyone else, is looking east for its trade as China’s economy becomes the epicenter of Asia’s growth. The line is a short 67 kms spur of the 2,750 kms pipe from Taishet in eastern Siberia to Nakhodka on the Sea of Japan that Russia will use to supply up to 1.6 million barrels a day to the growing Asian market once it is completed in 2012. The picture above shows a pumping station at Skovorodino under construction in April.

Last year, Beijing provided Moscow with a $25 billion loan repayable in oil that will let China import 300,000 barrels a day of Russian oil for 20 years from 2011, one of a series of oil-for-loans deals that Beijing has struck. Ten billion dollars of those loans, made via China Development Bank, are to Transneft, the pipeline operator. (The other  $15 billion went to the oil producer Rosneft). That flow of oil will start later this year, once China has built the 930 kms link from its own oil pipeline network in Daqing to the Skovorodino spur.

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An Unwanted North Korean Plane Crash In China

Tuesday’s crash of a North Korean military plane in Liaoning is a messy business all round. The assumption is that the pilot, who was killed when the plane ploughed into a house in rural Fushun county, was a defector. If so, Pyongyang won’t be happy that one of its pilots took flight in this way (the last one was in 1996), or that the picture now doing the rounds of the Internet shows an antiquated Soviet-era plane from its air force, an old MIG fighter jet or possibly a trainer, that apparently ran out of fuel while flying over China assumedly en route to Russia (all these assumptions coming out of unnamed South Korean intelligence sources). China has a repatriation agreement with North Korea, albeit one that is loosely enforced, whereas Russia does not, though in the circumstances that is now moot.

The nearest North Korean military base from which the plane could have taken off would be at Sinuiju, just inside North Korea’s border with China and 200 kms (125 miles) from the crash site. Flying north over Fushun would not have been the most direct route to the nearest Russian soil, though taking that would have meant heading north-east and flying parallel to the length of the North Korean border.

Beijing is now in contact with Pyongyang about the incident. Chinese state media have mentioned the crash only circumspectly. And questions are to be raised about how a foreign fighter jet made it 200 kms into Chinese airspace seemingly unchallenged. With the strained relations between the two putative allies not noticeably eased since Kim Jong Il’s visit to Beijing in May, both sides will want this latest incident to fade from view quickly.

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The Kazakhstan Dimension To Unrest In Urumqi

My thanks to my correspondent (as always e-mails welcome, but please also share with all via comments) who pointed out that Tuesday’s post, Uighurs, Repression, Assimilation And The Han Islanders, gave too little weight to the question of regional instability on China’s western borders and beyond. And in particular, in Kazakhstan.

Tibet, Inner Mongolia and Manchuria are buffer zones beyond which lie India, Russia and Korea and Japan respectively; and all geopolitically impassable. However, Xinjiang has become more of a gateway to Central Asia with its energy resources and trade routes to points further west. Chinese firms, including state owned enterprises, have steadily expanded their activity in Kazakhstan (see: Loan-For-Oil Deal Struck With Kazakhstan). Beijing is also improving transport links so oil can flow east and goods west.

In doing so China is moving into what has traditionally been a Russian buffer state against China. Indeed, Kazakhstan was formerly part of the Soviet Union. Moscow has been wary of this. If Chinese economic activity turns into political influence, for which read expansionism, wariness would turn to concern, or more. Uighur unrest spreading west from Urumqi to Central Asia’s other Muslim areas would offer opportunists in Moscow an excuse to reestablish Russian domination — yet one more reason for Beijing to come down hard and fast in Urumqi.

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BRICs and Brickbats Over The Dollar’s Reserve Currency Role

Brazil, Russia, India and China meet on Tuesday in Yekaterinburg for the first summit of the so-called BRICs, the four leading emerging economies.

They see themselves as a leading voice for the developing world and as a counterweight to the developed world’s dominance in international economic matters as represented by the G-7. As such they want to want to boost their role as global players and increase their collective weight in international organizations.

So far, they share too little in common beyond large, fast growing developing economies to have acted as a bloc. One arena in which they might have been expected to exert collective clout and to speak as one for the developing world was the seemingly interminable Doha round of world trade talks. Yet the interests of China’s low-tech farmers were different from those of their Indian counterparts and far too different from those of Brazil’s high-tech farmers for there to be any unity.

There is one issue that is emerging, however, on which they could speak with a common voice, and it is one on which Beijing has already been a herald: the challenge to the role of the dollar  as the world’s sole reserve currency. Beyond the statistics commonly trotted out to describe the BRICs — they cover a quarter of the world’s land surface, are home to 40% of the world’s people and account for 15% of world GDP– is one highly relevant to this issue: they hold 42% of global foreign exchange reserves.

As well as giving repeated airings to its concerns about the falling value of the dollar on all the U.S. debt it owns, Beijing has switched $50 billion of its admittedly more than $1 trillion of reserves into multi-currency based bonds issued by the International Monetary Fund. Russia has moved $10 billion and Brazil’s central bank has just announced it is doing the same with a similar amount of its reserves. The BRICs want more say over the IMF and are putting a bit of the money at least where their mouths are, and Beijing in particular would be most pleased for the IMF emerge as more of a counterweight in the global financial system to the U.S. The issue will figure prominently at the meeting in Yekaterinburg, a town historically redolent of executing the old order.

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China, Cuba, Russia and Latin America

Not that he is likely to foreclose but Hu Jintao has some debt restructuring to do with Raul Castro. After the collapse of the Soviet Union in 1991, China kept Cuba afloat with soft loans. Many of those are now falling due. Renegotiating them is on the agenda of the Cuba leg of Hu’s Latin American trip.

So are trade deals. Cuba is China’s second largest trading partner in the region after Venezuela. Latin America is of increasing economic importance to China, and to Russia. President Dmitry Medvedev is due to visit Havana next week, en route to the Asia-Pacific Economic Co-operation summit in Peru later this month, where Hu will also be in attendence.

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China And Russia Settle Their Border

It has taken 150 years on and off but China and Russia have agreed where their border lies. The deal settles the ownership of two disputed islands in Russian hands since 1929 — Heilongjiang province will get back one and a half of them — and will help put relations between the two countries on a firmer footing.

The deal puts flesh on the bone of a skeleton agreement reached in 2004 but the timing is interesting. It comes hard on the heels of Moscow’s recognition of Abkhazia and South Ossetia separation from Georgia which has caused Beijing some concern as it sets a precedent that countries can recognize ethnic enclaves within the recognized territories of other countries. And China has plenty of those large and small.

But equally it shuts off any further Chinese claims to Siberia and the Russian Far East, if not necessarily to Chinese migration. Many Chinese are taught that the country unfairly lost territory to Russia in the region, and assert that China now has a full right to get it back.

The larger of the two islands, Heixiazi (Bolshoi Ussuriysky in Russian) which is close to Khabarovsk, one of the biggest cities in the Russian Far East , is likely to be turned into a special economic zone to facilitate Sino-Russian trade.

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Russia’s Medvedev Heads To Beijing, By Way Of Astana

Russia’s new president, Dmitry Medvedev, arrives Friday. Notable as it is that he is making China the destination for his first official trip abroad, the route he is taking is even more so.

He will arrive via Kazakhstan, the energy rich former Soviet republic that is both playing an increasingly pivotal role in Central Asia and looking to lessen its trade dependence on Russia by selling more to China. China, for its part, is becoming a big financier of Kazakhstan’s energy and infrastructure projects.  Medvedev will be looking to shore up Moscow’s traditional economic links with Astana.

Trade will also be a focus of the Beijing leg of the trip, with Russia wanting China to buy more than just its raw materials. A bevy of businessmen from the engineering and electronics industries will accompany Medvedev. Bilateral trade grew five-fold to $48 billion a year during President Putin’s time, reflecting the closer political relationship between the two countries who find common ground in seeking counterweights to the U.S.’s global power.

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