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    Peace plans and pipelines: What came out of the Putin-Xi talks?


Russian President Vladimir Putin hosted Chinese President Xi Jinping for a two-day summit in Moscow this week. Here's a look at the key outcomes.

by: Reuters

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Peace plans and pipelines: What came out of the Putin-Xi talks?

March 22 (Reuters) - Russian President Vladimir Putin hosted Chinese President Xi Jinping for a two-day summit in Moscow this week. Here's a look at the key outcomes.



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Putin said Chinese proposals could be used as the basis of a peace settlement in Ukraine, but nothing emerged from the meeting to tie his hands militarily. A joint statement from the summit echoed language from China's 12-point paper last month in calling for dialogue, though it did not include the reference in that document to respecting the territorial integrity of all countries. It did, however, warn against "bloc confrontation" and condemn unilateral sanctions - references to NATO's arming of Ukraine and to the West's hammering of the Russian economy. Russia knows that Ukraine will not agree to any peace deal that fails to restore all of its captured territory, and the United States says any ceasefire now would just lock in Russian gains and give the Russian army time to regroup. So Putin can say he backs China's plan in the knowledge it is not going anywhere, barring any surprises from possible follow-up diplomacy between Xi and Ukrainian President Volodymyr Zelenskiy.

Bottom line: The agreed summit language suits Putin's purposes, enabling him to continue fighting while saying he is open to talk peace.


Gas pipeline

The summit produced 14 agreements on topics from soybeans to atomic energy, but it did not yield the big prize Russia wants: a deal on a new gas pipeline, Power of Siberia 2, to pump an extra 50 billion cubic metres (bcm) of Russian gas annually to China via Mongolia. Putin said "agreements with Mongolia" had been reached but Deputy Prime Minister Alexander Novak made clear it was not a done deal, saying instructions had been given to gas giant Gazprom to clinch a contract as soon as possible. There are two likely sticking points: who will build the 2,600 km pipeline and how the gas will be priced. China is well placed to drive a hard bargain, as Moscow needs the deal more: Gazprom is looking to China to make up for the collapse of the European market that used to account for 80% of its exports. Due to sanctions and last year's unexplained explosions in the Nord Stream pipelines under the Baltic Sea, analysts expect Gazprom to deliver only 50-65 bcm to Europe and Turkey this year, down from a peak of about 200 bcm in 2018.

Bottom line: Russia is still waiting on a deal and China has powerful leverage to secure advantageous price terms.


Putin-Xi friendship and the Sino-Russian relationship

The fact of Xi's visit was a timely boost for Putin, three days after the International Criminal Court accused him of war crimes in Ukraine. It enabled him to show that despite Western attempts to isolate him, he has the backing of a powerful friend who shares his opposition to the idea of a U.S.-dominated "unipolar world". The personal nature of the relationship - they have met some 40 times and call each other "dear friend" - binds Xi to Putin in a a way that means any defeat for Putin in Ukraine would also damage the Chinese leader.

In other respects, however, the visit showed the increasingly lopsided nature of the relationship and the gains accruing to Beijing, which has already saved billions of dollars on discounted oil and coal from Russia since the start of the war. Putin said Chinese companies would be first in line to replace Western companies that have quit Russia. He also said Russia backed the increasing use of China's yuan in its own trade with Asia, Africa and Latin America.

Bottom line: Short-term gains for Putin but a longer-term shift in favour of China.


What was in it for Xi?

Analysts said Xi's promotion of Beijing's peace proposals on Ukraine fits China's narrative of itself as a constructive, responsible global power: it wants to portray itself as impartial and deflect criticism that it is siding with an aggressor against a sovereign country. China values Russian support in the face of pressure from the West and sees practical benefits from deals on trade, investment, finance and energy - for example, in the event of a military conflict over Taiwan, Russia would be able to provide China with a reliable supply of energy and other resources.

Bottom line: China seeks to position itself as a mediator in the Ukraine crisis while sealing useful deals with Russia at a time when it is in a strong bargaining position vis-a-vis Moscow. (Reporting by Mark Trevelyan in London and Yew Lun Tian in Beijing, Editing by Angus MacSwan)