Cooperation between Russia and China in the field of energy and its development was discussed at the seminar "Prospects of Russian-Chinese energy cooperation". The event was organized by IMEMO RAS, the seminar was held on April 19, 2022 within the framework of the Global Energy Dialogue Forum.
Speaking about the prospects of cooperation Alexander Lomanov, Deputy Director of IMEMO RAS, stated that it is important to understand what are the prospects of the economy of the country with which cooperation is planned to develop. Lomanov drew attention to the statement of the Chinese leadership that China is entering the era of "new normality", which means that there will be no double-digit economic growth rates. "This is very important for Russia not to be afraid of objective transformations of the Chinese economy," the expert warned.
The Deputy Director of IMEMO RAS spoke about the key provisions of the Plan of the Modern Energy System of the 14th Five-year Plan of the People's Republic of China and analyzed how these provisions can be correlated with the development of energy cooperation with the Russian Federation.
The main difference of the new plan is that it is about creating a complete energy system. It should be environmentally friendly, efficient, low-carbon and safe, the system should be created taking into account global trends and the demands of domestic economic development.
According to Lomanov, China's expansion of natural gas purchases is in line with its plans for a gradual transition to carbon neutrality. The development of cooperation with Russia in this area also looks natural. China is interested in reliable and safe transport communications for energy supplies, and in a difficult international situation, land corridors from Russia gain an advantage over sea supplies. A revision of the supply structure is possible: in case of deterioration of relations with major LNG suppliers (Australia accounts for 40% of all LNG imported to China, the United States – 10%), China will have to look for a substitution for this segment.
According to Chinese statistics, Russia accounts for 15.5% of crude oil imports and 10% of natural gas imports in China. According to Lomanov, the improvement of cooperation is possible by increasing purchases of natural gas in Russia and intensifying cooperation in the nuclear energy sector.
However, such a development scenario involves a number of problems that need to be solved.
First, there are technological difficulties: the issue of replenishing technologies after the withdrawal of Western companies from Russia and the imposition of sanctions, as well as reducing China's access to advanced Western technologies in case of deterioration of relations with it.
Secondly, these are logistical difficulties: the limited capacity of railways, the problem of sources of investment in the construction of a new gas pipeline to China, the inability to purchase abroad or independently produce special vehicles for the delivery of energy carriers.
At the same time, China will not limit itself to cooperation with one supplier putting itself in dependency. China has alternative sources of energy supplies, and Beijing will strive to diversify them.
Mikhail Krutikhin, an economic analyst and partner of RusEnergy Agency, holds more restrained views on the prospects of Russian-Chinese energy cooperation. According to him, China's cooperation is based on pragmatism, which has nothing to do with altruism. Also, according to Krutikhin, China is pursuing an ambush strategy against Russian energy: it observes, does not interfere, but as soon as there is the slightest possibility of benefits from cooperation with Russia, it immediately comes out of the bushes.
"If you look at what electricity generation in China will look like at the end of the five-year plan, which is currently being implemented, coal, the development of nuclear and hydropower remain the main things for China. Gas and other energy sources will make up less than 8%. Therefore, I would not count on China needing Russian gas right now," Krutikhin warns.
