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Russian PM in China for talks focusing on energy

(AP)
Updated: 2006-11-09 15:57

Russian Prime Minister Mikhail Fradkov arrived in China Thursday for a two-day visit likely to focus on growing energy ties between the giant neighbors.

Fradkov was set to meet Chinese Prime Minister Wen Jiabao and attend the closing ceremony of the "Year of Russia" in China later Thursday, before holding separate talks Friday with President Hu Jintao and top legislator Wu Bangguo.

Energy supplies for the rapidly expanding Chinese economy will be high on the agenda.

China and Russia had signed eight agreements, covering sectors as diverse as trade, energy, car production and infrastructure construction. The contracted investment volume from the Chinese side is US$800 million (euro626.17 million).

Xinhua News Agency quoted Chinese Vice Premier Wu Yi as saying at the start of the Sino-Russian Investment Promotion Week that the volume of bilateral trade should hit US$60-US$80 billion by 2010.

Bilateral trade totaled US$29.1 billion (euro22.78 billion) in 2005, and had reached US$24.64 billion (euro19.29 billion) in the first nine months of this year, up almost 20 percent form the same period a year earlier.

Russian Deputy Prime Minister Alexander Zhukov told Xinhua that an agreement would be signed by the countries to promote and protect investment.

"The agreement aims to provide a legal foundation for expanding bilateral trade, and further facilitate two-way investment and cooperation," Zhukov said.

In October, Russian state oil company OAO Rosneft said it had set up a joint venture with China National Petroleum Corp. to explore for oil in Russia, with Rosneft holding 51 percent of the new entity, called Vostok Energy, while CNPC has 49 percent.

The deal marks the latest advance by China to tap into Russia's vast energy resources, and comes after CNPC bought a US$500 million slice of Rosneft's US$10.4 billion midyear initial public offering.

Russia is the world's second-largest oil exporter after Saudi Arabia, while China has accounted for about 40 percent of global demand growth over the past several years.

Also in October, Exxon Mobil Corp. signed a preliminary agreement to sell all the natural gas it exports from Sakhalin island in Russia's far east to the China National Petroleum Corp.

The Exxon-led project includes OAO Rosneft, but talks are going on with Russian state-controlled gas monopoly OAO Gazprom, which has a monopoly on Russian gas pipelines, effectively giving it veto power over independent gas projects.

China buys Russian oil and weapons, while Russia's imports of Chinese-made appliances and other consumer goods have been rising.



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