What Putin wants from China

Russian Prime Minister Vladimir Putin hailed "unprecedented levels of cooperation" with China, including $7 billion in new investment deals, as he kicked off a two-day visit to Beijing Tuesday.

The main item still under negotiation: a potential $1 trillion contract to export Siberian natural gas to China's industrial heartland, which would see Russia providing a third of China's energy needs by the end of this decade.

Though the main substance of the burgeoning Russia-China relationship remains trade – Chinese cash and consumer goods for Russian arms, hydrocarbons, and engineering products – the strategic dimension is becoming more important, experts say.

Putin, who's expected to return to his previous job as Russian president early next year, is making his 16th visit to China since becoming Russia's top leader almost 12 years ago.

"While Putin remains prime minister, the focus of Russia-China relations will stay on economics," says Alexander Khramchikhin, an expert with the independent Institute of Political and Military Analysis in Moscow. "The main subject today is gas. The political dimension will wait until Putin's president again."

China overtook Germany as Russia’s biggest trading partner last year. Annual turnover in Russia-China commerce may exceed $70 billion in 2011 and reach $200 billion in 2020, up from $59 billion in 2010, Putin told journalists.

Putin's 'Eurasian Union' ...

But the crucial political subtext of Putin's visit is an article he published last week in the Moscow daily Izvestia calling for the creation of a "Eurasian Union," a confederation of former Soviet states that might eventually rival the European Union or the United States.

"We suggest creating a powerful supra-national union capable of becoming a pole in the modern world, and at the same time an effective bridge between Europe and the dynamic Asia-Pacific Region," Putin wrote.

That suggests Russia may be moving away from its previous priority of building relations with the European Union, and seeking to build stronger ties with China and the wider Asian region.

"Putin's proposal of creating a Eurasian Union is the necessary political background for this visit to China," says Andrei Klimov, deputy chair of the Russian State Duma's international affairs commission. "And after Putin voiced his ambition to return to the presidency, it must be noted that he's not just an ordinary head of government or party leader making this trip."

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