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bn). About 40 contracts were signed by Russian and Chinese
businessmen and officials, Russian deputy prime minister Alexander
Zhukov said. The head of Russia's Gazprom, Alexei Miller, said a
preliminary deal had also been struck on supplying 70 bn cubic metres
a year of gas to China. The agreements came during the second day of
a visit to Beijing by Russian Prime Minister Vladimir Putin. Russia is
keen to bolster its economy, which President Dmitry Medvedev has said
will decline by 7.5 % in 2009. ANALYSIS Rupert Wingfield-Hayes, BBC
News, Moscow Beijing and Moscow call it a "strategic partnership",
but in reality it is a lot more complex and fraught with tension. The
trade relationship could be described as "you dig it up, we buy it".
Russia is rich in resources: oil, gas, metals and timber. China has a
huge appetite. But Russian nervousness about China can be seen in
their energy deals. Russia needs to invest billions to build new
pipelines to send its oil and gas to China. Beijing has the money,
but Moscow will not allow Chinese companies to build and own these
pipelines. Instead, China is having to lend Russia the money. It is
all about history and demographics. Big chunks of the Russian Far
East were once part of the Chinese empire and there is deep concern
in Russia that a rich, powerful and over-populated China will one
day want it back. It is keen to sell more oil and gas to China - the
world's second-biggest energy user. Mr Zhukov told reporters that the
deals included two $500 m loans from Chinese banks to Russian
financial institutions. One was from the China Development Bank to its
Russian counterpart Vnesheconombank, while the other was from the
Agricultural Bank of China to Russia's state-run VTB bank. He said
other deals included investments by Chinese firms in Russian
construction facilities, but gave no details. Currency ambition Trade
between Russia and China has risen from less than $10 bn to more than
$50 bn annually over the past six years. The heart of the
relationship is Beijing's thirst for Russian energy - oil and gas
make up more than half of Russian exports to China. Earlier this
year, Moscow signed a $25 bn agreement to help fund a pipeline to
supply oil from Siberia to China. In exchange, China was guaranteed
a 20- year supply of crude oil. However, Moscow is also keen to boost
exports of machinery, especially aviation equipment and nuclear
power plants - though analysts say that China's appetite for Russian
goods other than energy and raw materials is limited. The countries
are seeking to expand the amount of business they do in their own
currencies, rather than the US dollar. However, currently only about
1 % of their dealings involve roubles or yuan.
