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13 Oct, 2009 08:22

Putin visits China: $5.5bln in deals expected

Prime Minister Vladimir Putin is leading a high-powered delegation to China which is sealing deals worth more than $5 billion in energy, infrastructure and telecoms.

The delegation comprises more than one hundred senior Russian business leaders. They are hoping to win a bigger slice of one of the world’s largest markets.

Putin was greeted by his Chinese counterpart Wen Jiabao on his arrival, with two way trade and energy agreements worth $3.5 billion already signed.

During his visit he is also scheduled to meet with China’s President Hu Jintao, and take part in a meeting of the Shanghai Cooperation Organization (SCO) on Wednesday.

Gazprom CEO, Aleksey Miller, has announced on Tuesday that China and Russia have agreed on ramping up gas supplies to the booming Asian economic powerhouse.

Russia is looking to expand machinery exports to China, but also to increase yuan-ruble trade, which soared to 58 billion dollars in 2008 from just over 9 billion in 2002. So, it’s obvious the growth of trade between the two countries is tremendous.

This comes following recent rumors that Gulf states are going to try to dump the dollar, perhaps with Russia and China joining in, as the currency used for oil transactions.

Robert Fisk, the journalist for the Independent newspaper who revealed the scheme, told RT earlier that “one of the Chinese bankers said to me, including a broker sitting at the table, he said: ‘Believe me, your report is correct, but you will receive a thunder of denials,’ and indeed that is what happened. It is interesting that China has not come out with any huge denials. Russia has of course up to a point and the Gulf Arabs. But it is in the interest of the Arabs, and all the nations involved, to deny this is happening at the moment.”

The demise of the dollar would be catastrophic for China, but there has been great interest expressed from both China and Russia on the idea of a new world reserve currency to replace what financial forecaster Gerald Celente calls “phantom money”.

“This is where the real battle is going to happen. China does not want to see the dollar collapse because they are holding trillions of them. They do not want to be paid back with cheap money and nobody does. This is really a worldwide problem, not just America’s.”

Dropping the dollar as the key trading currency, which would be of interest for the Russia-China partnership, isn’t realistic, believes Natalia Zaderey from the Institute of Far Eastern Studies in Moscow.

The meeting is expected to focus on the strengthening of humanitarian and economic cooperation between the SCO member states, including their cooperation in overcoming the consequences of the global financial crisis.

Heads of Government of the SCO member states are also to discuss joint projects in the transport, energy, information and telecommunication spheres.

The SCO, founded in 2001, consists of Russia, China and the ex-Soviet republics of Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.