Caspian Report - Issue: 08 - Fall 2014

additional pipeline of similar capacity
is due to be completed later in the
year. The new lines, along with the
increased production in Turkmenistan,
will increase the total capacity
through the Central Asia-China
pipeline to 65 bcm annually. That
far exceeds what Russia will supply
annually to China. 20 During his
keynote speech at the 4 th Summit of
CICA-Conference on Interaction and
Confidence Building in Asia, 21 Chinese
President Xi Jinping proposed
creating a mechanism for Asian
security cooperation based on the
foundation of CICA. In other words,
he proposed creating a security cooperation
mechanism for Asian nations
that excluded the United States.
China’s proposal is a direct counter
to U.S. plans for the creation of an
“Asian version of NATO” with the
U.S.-Japan alliance at its centre. Just
as NATO targeted the former Soviet
Union as its main foe, the Asian version
of NATO, as advocated by the
certain circles in the United States
and Japan, plans to create a security
mechanism in the Asia Pacific region
aimed at China and North Korea. 22
In one further step, Russia is ready
to control the relations with the
U.S. and the EU, but it is not easy
to manage China’s power in Eurasia,
which may result in uncertain
developments in the future. This
critical contract has secured Russia
a share of the world’s fastest growing
gas market and laid the basis
for its participation in future Asia-
Pacific coast LNG projects. Because
most important concerns will effect
the over-dependence on China
and will reinforce Russia’s focus as
an exporter of natural resources
and hold back the development of
ENERGY HUNGRY CHINA CURRENTLY FAVOURS
COAL AND OIL IN ITS NATIONAL ECONOMIC
DEVELOPMENT MODEL.
high-technology balance in the next
decades. In connection with this, US,
Australian and Canadian lawmakers
have expressed concerns over a new
multibillion dollar gas deal between
Russia and China, urging Washington
to take action over the case on
exports of LNG to Europe, so that
they have alternative sources. 23 As
a result, for Russia, the gas contract
with China meant gaining access to
new strategically promising Asian
markets, showing a readiness to
develop new gas fields and winning
a major bargaining chip in its talks
with European consumers, who are
bearish on gas prices amid a shale
gas revolution. 24
CHINA’S ENERGY ADVANTAGES
Energy hungry China currently favours
coal and oil in its national
97
CASPIAN REPORT, FALL 2014
20.
Reid Standish: “Hungry for Gas, China Muscles Onto Russian Turf”, Foreign Policy, 20 June 2014, http://
www.realclearenergy.org/2014/06/20/hungry_for_gas_china_muscles_onto_russian_turf_261927.
html
21.
CICA is a regional forum started through Kazakhstan’s initiative in 1992, and is composed of 26 member
nations, including China, Russia, all the Central Asian countries and some Southeast Asian countries.
South Korea is a member country, while the United States and Japan have observer status.
22.
“China-Russia Alliance Threatens U.S. Hegemony”, 3 July, 2014, http://zoominkorea.org/
china-russia-alliance-threatens-u-s-hegemony/
23.
“US lawmakers worried about Russia-China gas deal”, Press Tv, http://www.presstv.ir/detail/2014/05/25/364102/us-worried-about-russiachina-gas-deal/,
Babs McHugh: “Russia China
gas deal threat to Australian LNG ‘underestimated’”, ABC Rural, 28 May 2014, http://www.abc.net.au/
news/2014-05-28/russian-gas-threat-for-australian-producers/5484124.
24.
“Vladimir Putin in Shanghai: Russia Is Turning East”, Valdai Club, 23 May, 2014, http://valdaiclub.com/
asia/69045.html