Reuters report that Russia and China failed to agree a price for the prospective gas deal between the two countries today. The $400bn supply agreement is now up in the air unless negotiators can iron out their differences before Putin leaves China on Wednesday.
Putin did receive a note of support from Chinese premier Xi Jinping who stated after meeting Putin that he hoped for a de-escalation in Ukraine and for peaceful and political ways to resolve the existing problems. In a dig at the West both countries referred to the crisis as “domestic”
The gas deal with China is a big play for Putin without the Ukraine problem but an even bigger one with it. If there’s any further escalation in bad tensions between the West and Russia, that forces either the EU to switch gas supplies or Russia to turn them off, the Chinese deal will go a long way to plugging the gap and potentially strengthening Putin’s hand. Conversely a failure to get the deal done will not go down well in the Kremlin.
Update: On a different front, during Putin’s talks Russia’s second largest lender VTB signed a deal with chinese counterparts to pay each other in domestic currencies thus bypassing US Dollars.
“Under the agreement, the banks plan to develop their partnership in a number of areas, including cooperation on ruble and renminbi settlements, investment banking, inter-bank lending, trade finance and capital-markets transactions,” says the official VTB statement.
Details gleaned from RT.com via Zerohedge
