China Takes Advantage Of Russia's Limited Economic Options

Oct 15, 2014 12:03 PM EDT

(Photo : Reuters/Sergei Karpukhin) Women walk past a building under a board showing currency exchange rates in Moscow, October 7, 2014. Russia's rouble resumed its slide on Tuesday following fresh central bank intervention and another shift in its trading band while Moscow stocks fell 1 percent, lagging broader emerging equities which held at one-week highs.

As Russia continues to struggle with limiting favors from United States and Europe, China immediately comes to rescue with billions worth of investments to boost energy and transportation among other sectors. But critics said that the Chinese empire is taking advantage of weakening Russian economy to advance its political power in the international arena.

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In a recent visit to Moscow, Chinese Premier Li Keqiang and President Vladimir Putin signed a 38-deal agreement covering energy, ballistic, and transportation schemes among others. Prior to the meeting, Putin signed a US$400 billion gas bond with China in May as well as the US$4 billion credit line channeled through different Chinese national banks.

There are also reports of Russia's intent to sell one of its advanced weapons technology to Beijing in exchange to technical, legal, and engineering support for its high-speed Russian Railway project connecting Moscow and Kazan.

Li also committed to provide US$10 billion additional fund to the new railway system as well as the development of an advanced passenger jet.

Prime Minister Dmitry Medvedev confirmed that Russia's economic ties will go a long way, evident in a US$24 billion yuan-ruble currency swap as the official means of bilateral trade.

Bilateral trade reached US$90 billion and is expected to grow to US$100 billion next year and US$200 billion by 2020, Putin said Tuesday.

Analysts said that Russia and China are a "match made in heaven" with the former. a haven of rich natural oil and coal reservoir and the largest land mass in the world while the latter as a consumer supplies giant and the biggest human resource available.

Alexander Salitsky, a China expert from the Institute of World Economy and International Relations, said that "Russian negotiators are not fool" and that they know the bottom line of the partnership.

China's alliance to Russia is also its way to express defiance to Washington's sanction rules concerning Ukraine conflict. "The Chinese have always been against sanctions on principle," Salitsky added.

TagsRussia, russian economy, Russia-China economic plans