When 2 are in conflict, the winner is the 3rd. This is a wisdom widely known in my country. My country is not China, but it looks as China follows this concept. So while Russia and the West are in confrontation on Ukraine, Chine will benefit from both by staying neutral.
The visit of Vladimir Putin in Asia giant will bring political support and will start new projects for exporting Russian gas to China. For China it will mean lower price as Russia obviously needs a fast response to the sanction threat of the West. But the most interesting part of all this is that with or without Ukraine, it was inevitable Russian gas to start going East. So Ukraine crisis only helps China to get better business conditions.
China is the real an increasing economic power. It develops real industry and its hunger for resources will increase. The enormous and getting richer population will have to consume more and more energy. This means China will import more and more oil and gas, no matter what happens in Saudi Arabia, Venezuela or Ukraine.
At the same time, the main current buyer of Russian gas – EU, is in economic trouble. The real industry is fleeing (to China). At the same time consumers, being more and more unemployed, are consuming less. In addition a powerful madness called “green energy” is spreading, pressing consumption of traditional energy resources down. So in one or another way, the market of Russian gas is logically to decline.
So as a whole it is inevitable the gas to start going East. China has no other choice and Russia has no other choice. Their negotiations have been running for already a decade. With Ukraine crisis and pressure on Russia, this brings advantage to China. If the negotiations finish now, this will simply mean China has cashed the Ukraine jumble.
When 2 are in conflict, the winner is the 3rd.
Dobri B.
May-20th-2014
