The Great Game Changer: Belt and Road Intiative (BRI; OBOR)

[TaiShang]

Should have been around 500 billion yuan.

But China and Russia already had a currency swap in 2010 so this might be a renewal just like China renewed the currency swap with South Korea.

Yes, this is basically an expansion of the deal signed earlier.

And there is more to it:

Russia, China ink deal to build high-tech parks
October 14, 2014, 5:32 am

Chinese Premier Li Keqiang (left) with his Russian counterpart Dmitry Medvedev during the signing of documents at the 19th Regular Meeting of the Heads of Government of Russia and China on 13 September 2014 [Xinhua]

China and Russia on Monday signed a memorandum of understanding (MOU) to jointly build 2 high-tech parks, one in each country.

The park in China will be located in the new town of Xixian Fendong in Shaanxi and will initially occupy four square kilometers. In Russia, 200,000 square meters of buildings will be built in the Skolkovo Innovation Center in Moscow, the Russian Direct Investment Fund said in a press release Tuesday.

Part of China’s revival of the “Silk Road”, the high-tech parks are being developed by the Russian Direct Investment Fund (RDIF), Russia-China Investment Fund (RCIF), the Skolkovo Fund, and the local government of northwest China’s Shaanxi Province.

RDIF said under the agreement RCIF and the local government of China’s Xixian will establish a joint venture for the construction of the parks.

Authorities expect to open satellite offices for the Chinese park in the Chinese cities of Beijing, Shanghai, Guangdong and Heilongjiang, while the Russian park will open offices in Kaliningrad, Vladivostok and the Russian republic of Tatarstan.

RDIF plans to help the Russian park attract high-tech companies from both countries and promote development of international companies within the parks.

RCIF is a private equity fund created by the RDIF and China Investment Corporation, two sovereign wealth funds.

Earlier on Monday, Chinese Premier Li Keqiang and his Russian counterpart, Dmitry Medvedev, witnessed the signing of about 40 agreements after holding the 19th China-Russia Prime Ministers’ Regular Meeting in Moscow. Medvedev described the agreements signed as representative of “the special character of the partnership”.

“We are interested in attracting Chinese investment into agrarian projects in Siberia and the Far East. In turn, as the world’s largest country with the biggest reserves of arable land we can supply China with food products, especially agricultural products,” Medvedev told his Chinese counterpart in Moscow.

Further consolidating the partnership, the two allies also signed a currency swap deal worth 150 billion yuan ($24.4 billion) between the central banks of China and Russia.

The Chinese Premier in Moscow also said Beijing will advance the establishment of a Eurasian high-speed transport corridor linking Beijing and Moscow, adding that the current priority should be the high-speed railway between Moscow and Kazan.

 

[vostok]

 

[TaiShang]

We sincerely thank the US and its smart and powerful allies to cement and reinforce the China-Russia cooperation to a new level.

Either country may not have achieved that in such a short time and on such a scale.

Another crown jewel for US democracy which recycles same old garbage every four year.

 

[TaiShang]

 

[raazh]

have you guys noticed another arm twisting by the US and the western axis of terror. They are deliberately crashing the Oil price; the real backbone of Russian and Iranian economies .. Notice how Saudi Arabia and Kuwait have unusually agreed to keep pumping crude even though the price is tumbling. Wake up call for Russia ??

 

[TaiShang]

have you guys noticed another arm twisting by the US and the western axis of terror. They are deliberately crashing the Oil price; the real backbone of Russian and Iranian economies .. Notice how Saudi Arabia and Kuwait have unusually agreed to keep pumping crude even though the price is tumbling. Wake up call for Russia ??

But, on the other, good news for China. Hence the importance of composing a historical bloc: When you act as a bloc, the adversary cannot hurt one of you without benefiting the other.

Hopefully, with greater and more diverse cooperation with China, Russia will be able to reduce its reliance on the export of natural resources.

The following Global Times essay sums it up nicely.

Sino-Russian bond more than expediency

The ongoing visit of Chinese Premier Li Keqiang to Russia has yielded fruitful results. The two sides on Monday inked 38 inter-governmental, inter-departmental and corporate agreements on different aspects of bilateral cooperation involving energy, aviation and space, high-speed railways, tourism, and finance. The Western world has conflicted feelings as it witnesses the hug between the Russian bear and the Chinese dragon these days. Many Western media outlets hold that it's Western sanctions that have pushed Moscow to side with Beijing, making China the biggest beneficiary of the West-Russia confrontation.

It is indeed one of the reasons for the further advancement of Sino-Russian relations. But noticeably, this was the 19th China-Russia Prime Ministers' Regular Meeting. If the West merely takes China-Russian cooperation as subordinate to the Western attitude toward the two, it is ridden in excessive Western centralism.

Moscow and Beijing were once locked in long-lasting confrontation. But since the 1990s, both have drawn lessons and been engaged in developing friendly ties. In contrast, the Americans, who are obsessed with their experience of crushing the Soviet Union through the Cold War, have never reflected upon their long-term confrontation with Moscow.

The West has been trying to sting Moscow now and then, which helps foster the recognition of the significance of equitable and friendly Sino-Russian cooperation. Beijing and Moscow have been accustomed to a long-term amicable relationship. In other words, even when the West lifts their sanctions against Russia, Sino-Russian relations will continue to prosper.

Western countries fail to learn from how China and Russia overcame a myriad of conundrums to enter into overall cooperation. Instead, they keep calculating how China and Russia benefit from them. They are more willing to believe China and Russia should be entangled into cooperation, competition and even confrontation as are the relationships between China and the US, or between China and Japan.

Contrary to the "master-servant" relationship between the US and other Western countries, the relationship between China and Russia and other new emerging economies is equal, which is more appealing. US-Russia relations after the Cold War have never developed on an equal footing.

Washington has kept suppressing Moscow's strategic space. Only when the US and the whole Western world reevaluate, can there be a new driving force in major power diplomacy.

Western countries fail to grasp the essence of the China-Russia relationship. They are laboring under the misperception that the two countries are engaged in a temporary courtship and the 38 cooperative agreements signed on Monday are candidly a "gift" of the West. By sticking to such views, they will continue their confrontation with Russia and be stuck in complicated relations with China.

 

[Beidou2020]

have you guys noticed another arm twisting by the US and the western axis of terror. They are deliberately crashing the Oil price; the real backbone of Russian and Iranian economies .. Notice how Saudi Arabia and Kuwait have unusually agreed to keep pumping crude even though the price is tumbling. Wake up call for Russia ??

That's exactly what's happening.

I noticed this too. Oil prices should be climbing considering the geopolitical tensions in the Middle East where oil supplies might be disrupted. Yes, the global economy is slowing but oil has dropped $20 in a very short period of time after hovering around $100-105 (I'm talking West Texas Intermediate, not Brent. Although Brent is considered the pricing benchmark for the world whereas WTI is mostly for US).

Oil prices are determined by the crude oil futures contract in COMEX. US banks (on behalf of the US regime) can manipulate the futures prices however they want. Like they do to gold prices to help the dollar.

The US along with the Saudis used this method of collapsing the price of oil in the 1980's (by Saudi Arabia pumping extra oil into the market and the US manipulating the oil futures down) to hurt the main source of fiscal revenue to the Soviet Union. This way the Soviet Union economy will be hurt and it won't have as much money to spend on military.

Oil represents around 50% of the entire Russian fiscal revenue. If oil prices go down, that will hurt Russia.

In 2013, Russian oil revenue was $194 billion and gas revenue was $28 billion. The total Russian fiscal revenue was $386 billion. That means oil accounts for around 50% of the Russian government revenue.

Russia's budget had revenues of $191-$194 billion from oil and $28 billion from gas in 2013, Russian President Vladimir Putin said during his hotline on Thursday. "This is a significant part of Russia's budget revenues," he said. Putin said main revenues in this sector come from oil, not gas. "Last year, revenues from oil were $191-$194 billion; revenues from gas - around $28 billion. Do you feel the difference?" he said. The drop in oil prices from $90 to $85 per barrel is not critical for the Russian economy, Putin said. Russian President Vladimir Putin said he thought the European Union would not be able to stop buying Russian gas. He said during a hotline on Thursday that Russia supplied mainly pipeline gas to Europe, covering 30%-35% of its needs. "Will it be possible at all to stop buying Russian gas? In my view no," he said.
Russia had revenues of $191-$194 bln from oil, $28 bln from gas in 2013 - Putin | Russia Beyond The Headlines)

Russia ran a budget deficit last year of 310 billion rubles ($9.2 billion), the Finance Ministry said in preliminary data for 2013 released Monday, the Prime news agency reported.
The figure amounts to about 0.5 percent of Russia’s gross domestic product and is slightly lower than the Finance Ministry’s latest prediction of 0.9 percent of GDP for the 2013 shortfall.
Rising oil prices and rapid economic growth allowed Russia to record a budget surplus for much of the 2000s, but sputtering economic growth last year has led to smaller revenues and changes to long-term fiscal planning.According to the budget signed into law last year by President Vladimir Putin, Russia is expected to record a budget deficit of 391 billion rubles ($12 billion) this year and 817 billion rubles ($25 billion) in 2015.
Russia’s total income last year was 13.02 trillion rubles ($386 billion), the Finance Ministry said.
Russia Records 2013 Budget Deficit of $9.2Bln | Russia | RIA Novosti

The US is using its old method of getting Saudi Arabia to pump extra oil and combining that with manipulating the oil futures down to hurt the Russian economy and their military funding.

Even though Russia has enormous oil and gas production and reserves, it doesn't have the power to set the market price.

China must quickly establish its crude oil futures contract which will make it harder for the US to manipulate oil prices.

 

[Beidou2020]

But, on the other, good news for China. Hence the importance of composing a historical bloc: When you act as a bloc, the adversary cannot hurt one of you without benefiting the other.

Hopefully, with greater and more diverse cooperation with China, Russia will be able to reduce its reliance on the export of natural resources.

Yes it will benefit China but it will cause massive damage to the Russian economy. China can manage relatively high oil prices, but Russia cannot afford very low oil prices.

What I'm trying to say is that China will benefit by say 10% but Russia will be hurt by say 30%.
Russia loses far more than what China gains through low oil prices.

 

[key-CN]

I think that all countries do not only China.

 

[Star Wars]

It's no wonder the Americans are going after Russia, defying the dollar is a worse sin than terrorism and murder in their book.

A lot of countries have been defying the Dollar for last 5 years , India , Bangladesh,Japan ,China and even European countries . Somethings up . If OIC decides to dump the dollar then its all over ...

 

[cnleio]

I see the RMB get closer to a international currency.

 

[senheiser]

have you guys noticed another arm twisting by the US and the western axis of terror. They are deliberately crashing the Oil price; the real backbone of Russian and Iranian economies .. Notice how Saudi Arabia and Kuwait have unusually agreed to keep pumping crude even though the price is tumbling. Wake up call for Russia ??

let them do this, saudi arabia needs oil at 90$ to have balanced budget and they have slowing growth. Russia isnt as much dependent on crude oil as we used to be unlike saudis, most of our oil exports is now gasoline and other oil produced products. Saudi arabia is mainly worried about shale oil so this is even hurting america more than russia as their whole shale revolution is dependent on high oil prices. They need to dig many more holes to achieve the same performance like russia or saudi arabia

 

[cnleio]

I forget, what about Russia selling Su35 fighter or China buying Su35 case ??????

 

[raazh]

let them do this, saudi arabia needs oil at 90$ to have balanced budget and they have slowing growth. Russia isnt as much dependent on crude oil as we used to be unlike saudis, most of our oil exports is now gasoline and other oil produced products. Saudi arabia is mainly worried about shale oil so this is even hurting america more than russia as their whole shale revolution is dependent on high oil prices. They need to dig many more holes to achieve the same performance like russia or saudi arabia

While the price of crude effects the global economy, I don't think it will hurt American + Western EXPORTS as much as it is hurting the Russian EXPORTS. US shale oil is now able to meet their local demand and has not been exported in any significant quantity so far. I do agree that the crude price dictates the economic viability of shale extraction however in the short term they are all good as long as the US demand can absorb their production.

On the other hand crude or any of its derivatives is the back bone of Russian EXPORTS. Even short term swings in the price will have serious consequences for Russians fiscal management. Perfect example of the term "financial terrorism".

 

[senheiser]

While the price of crude effects the global economy, I don't think it will hurt American + Western EXPORTS as much as it is hurting the Russian EXPORTS. US shale oil is now able to meet their local demand and has not been exported in any significant quantity so far. I do agree that the crude price dictates the economic viability of shale extraction however in the short term they are all good as long as the US demand can absorb their production.
On the other hand crude or any of its derivatives is the back bone of Russian EXPORTS. Even short term swings in the price will have serious consequences for Russians fiscal management. Perfect example of the term "financial terrorism".

only 33% of Russian exports are crude oil

What you dont get is that America is uses the dollar while russia is paying in ruble for its exploration. Russia is much cheaper to produce and explore