WASHINGTON, May 21 (RIA Novosti), Lyudmila Chernova – A long-negotiated gas deal between China and Russia is part of the coming shift toward a multipolar world, Dr. Richard Wellings, Deputy Editorial Director at the Institute of Economic Affairs (IEA), told RIA Novosti Wednesday.
“It’s part of the monumental shift in world trade. And this is probably the first of many such deals, but we’ll see more of these,” Wellinngs told RIA Novosti Tuesday. “There is a shift to a multipolar world.”
Wellings believes that the gas agreement is very important and will have benefits in terms of current political difficulties, as it might significantly reduce Russia’s dependence on European markets.
“The European Union is a stagnating economic region, whereas China is a rapidly growing part of the world economy,” he stated. “There are potentially enormous benefits in terms of diversifying trade. It can also be a stacking stone to more deals and starting point of much more trade between China and Russia.”
Wellings warned that if Europe becomes too hawkish on economic sanctions against Russia, there is a danger for it to end up increasingly marginalized in terms of trade.
“It won’t happen overnight, because the European Union is far too dependent on Russian energy at the moment, and I don’t think it is practical to find alternative sources,” the expert said, adding that the process for Europe to begin importing US shale gas will take years.
The deal, if struck, will provide for gas deliveries amounting to 38 billion cubic meters per year via the eastern route to China, the largest market for Russian gas in the Asia-Pacific region.
The contract is expected to be signed for a 30-year period and according to analysts is worth about $400 billion. The signing of the contract has been delayed several times and many see Russian President Vladimir Putin’s current visit to China as the final stage of the negotiating process.
In a surprising turn of events, however, the two sides failed to reach an agreement citing a pricing issue as the main stumbling block. Nevertheless, experts think the deal will be sealed before Russian President Vladimir Putin leaves China on Wednesday.