China-Russia Energy Trade and Investment: Ties That Bind and Ties That Break

• In Event: Russia's Engagement in Asia: the Russian Far East and Beyond

Abstract

This paper examines the evolving China-Russia economic relationship, with a focus on bilateral energy trade and investment. Their bilateral trade relationship is highly imbalanced and complex. China’s interest in Russian exports has until now been largely focused on natural resources. In 2015, Russia became the largest supplier of oil to China. But in reality they have struggled to turn past energy agreements into real supply deals and China has constantly been seeking to diversify its energy trade partners. Pipelines announced last decade have still not been built because of disagreements over pricing and other conditions. This paper will examine the contrasts between Chinese and Russian preferences, interests and approaches in making bilateral energy trade policy. What are the domestic and international drivers and constraints for energy cooperation between China and Russia? How will China’s recent initiative of New Silk Road and Asian Investment and Infrastructure Bank (AIIB) affect bilateral economic relations?

Author

• Wei Liang, Middlebury Institute of International Studies at Monterey