1. Sino-Russian Relations

In 2013, the comprehensive strategic partnership of coordination between the People’s Republic of China and the Russian Federation continued to move forward from a new historical starting point. Their political mutual trust was further strengthened, exchanges and cooperation in various sectors produced important results, and strategic coordination was further intensified.

The two countries had close exchanges at the top and other levels. In 2013, the two presidents had five meetings, three telephone conversations and 16 exchanges of messages, jointly ushering the China-Russia comprehensive strategic partnership of coordination into a new stage. From 22 to 24 March, President Xi Jinping paid a state visit to Russia. On 5 September, President Xi Jinping and President Vladimir Putin held a bilateral meeting on the sidelines of the Eighth G20 Summit in St. Petersburg, Russia, where they had an in-depth exchange of views on the growth of China-Russia relations and cooperation in various sectors. On 7 October, the two presidents met on the sidelines of the 21st APEC Economic Leaders’ Meeting in Bali, Indonesia, where they had an in-depth exchange of views on the growth of bilateral ties and cooperation in a whole range of areas.

The two prime ministers had two meetings, three telephone conversations and nine exchanges of messages, which boosted China-Russia relations and cooperation in various sectors. From 22 to 23 October, Prime Minister Dmitry Medvedev paid an official visit to China and attended the 18th Regular Meeting between Chinese and Russian Prime Ministers with Premier Li Keqiang. He also met with President Xi Jinping and NPC Chairman Zhang Dejiang respectively. The two heads of government signed and issued the Joint Communiqué on the 18th Regular Meeting Between the Heads of Government of the People’s Republic of China and the Russian Federation. On 29 November, Premier Li Keqiang met with Prime Minister Medvedev on the sidelines of 12th Meeting of the Council of Heads of Government of the SCO Member States in Tashkent, Uzbekistan.

Exchanges between legislatures of the two countries were frequent. On 28 January, NPC Chairman Wu Bangguo met with Federation Council Chairwoman Valentina Matvienko on the sidelines of the 21st Annual Meeting of the Asia Pacific Parliamentary Forum in Vladivostok, Russia. From 22 to 25 September, NPC Chairman Zhang Dejiang visited Russia. He held talks with Federation Council Chairwoman Matvienko and they attended the Seventh Meeting of the Cooperation Committee of the NPC and the Federation Council. He met with President Putin and State Duma Chairman Sergei Naryshkin. He also visited Irkutsk and met with Governor Sergei Eroschenko. From 26 to 28 May, State Duma Chairman Naryshkin visited China. He held talks with NPC Chairman Zhang Dejiang and they attended the Sixth Meeting of the Cooperation Committee of the NPC and the State Duma. He also met with President Xi Jinping.

Institutional exchanges in various sectors were carried out smoothly. From 14 to 16 August, State Councilor Yang Jiechi visited Russia. He held the Ninth Round of China-Russia Strategic Security Consultation with Federal Security Council Secretary Nikolai Patrushev and met with President Putin and Foreign Minister Sergei Lavrov. From 29 to 31 October, General Xu Qiliang, Vice Chairman of the Central Military Commission, visited Russia and co-chaired the 18th meeting of China-Russia Intergovernmental Joint Commission on Military Technology Cooperation with Defense Minister Sergei Shoigu. From 20 to 23 November, Vice Premier Wang Yang attended the closing ceremony of the "Year of Chinese Tourism" in Russia and met with Deputy Prime Minister Olga Golodets. From 8 to 9 January, Federal Security Council Secretary Patrushev held the Eighth Round of China- Russia Strategic Security Consultation with State Councilor Dai Bingguo in Beijing. He also met with CPC Central Committee General Secretary Xi Jinping and State Councilor Meng Jianzhu. On 25 February, Deputy Prime Minister Arkady Dvorkovich had a meeting in Beijing with Vice Premier Wang Qishan as co-chairs of the China-Russia Energy Cooperation Committee. From 19 to 21 August, Deputy Prime Minister Dmitry Rogozin had a meeting with Vice Premier Wang Yang as co-chairs of the China- Russia Prime Minsiters’ Regular Meeting Committee in Harbin. On 24 September, Deputy Prime Minister Golodets and Vice Premier Liu Yandong held the 14th Meeting of China-Russia Cultural Cooperation Committee in Guilin. On 15 October, Deputy Prime Minister Dvorkovich and Vice Premier Zhang Gaoli held the 10th Meeting of the China-Russia Energy Cooperation Committee in Beijing. On 18 October, Deputy Prime Minister Rogozin and Vice Premier Wang Yang held the 17th Meeting of the China- Russia Prime Minsiters’ Regular Meeting Committee in Xi’an.

Other high-level contact between the two countries were frequent. From 24 to 28 April, State Councilor Guo Shengkun visited Russia. He held talks with Federal Security Council Secretary Patrushev and had meetings with Prosecutor General Yury Chaika, Interior Minister Vladimir Kolokoltsev, Federal Security Service Director Alexander Bortnikov and Federal Investigative Committee Chairman Alexander Bastrykin. From 19 to 22 June, Vice Premier Zhang Gaoli attended and addressed the 17th St. Petersburg International Economic Forum in Russia. He also met with President Putin, First Deputy Prime Minister Igor Shuvalov and Deputy Prime Minister Dvorkovich. From 2 to 4 July, Meng Jianzhu, member of the Political Bureau and Secretary of the Political and Legislative Affairs Committee of the CPC Central Committee, attended the Fourth International Meeting of High Representatives for Security Issues in Vladivostok, Russia. He made a keynote speech on cyber and information security and met with Federal Security Council Secretary Patrushev. From 14 to 15 April, First Deputy Prime Minister Shuvalov visited China. He had a meeting with Premier Li Keqiang and held talks with Vice Premier Zhang Gaoli. From 10 to 11 September, Deputy Prime Minister Dvorkovich attended the Annual Meeting of the New Champions of World Economic Forum in Dalian and met with Premier Li Keqiang.

Foreign ministers of the two countries stayed in close touch. From 20 to 22 February, Foreign Minister Yang Jiechi visited Russia and met with President Putin and Foreign Minister Lavrov. Foreign Minister Wang Yi and Foreign Minister Lavrov met on multiple international occasions, had telephone conversations and exchanged correspondence to exchange views and coordinate positions on major regional and international issues.

The two countries extended to each other even firmer support on issues concerning sovereignty, security, territorial integrity and other core interests. China supported Russia in fighting terrorism and safeguarding its sovereignty and security. Russia supported China’s principles and positions on the Taiwan question, Tibet-and Xinjiang-related issues and other issues.

Pragmatic cooperation was fruitful. The two sides actively expanded and deepened their business cooperation and accelerated investment cooperation. The China-Russia Investment Fund operated smoothly. Energy cooperation was advanced in an all-round manner. Integrated upstream-downstream oil and gas cooperation made important progress. It was agreed that Russia would increase crude oil supply to China through oil pipelines and maritime transport. Cooperation in the areas of coal, electricity and new energy continued to expand. Nuclear energy cooperation saw positive results, as the building of generators unit 3 and unit 4 of the second phase of the Tianwan Nuclear Power Station was successfully launched. The two sides made progress in the preliminary feasibility study for joint R&D of long-range and wide-body passenger planes, and had active discussions on the joint R&D of heavy helicopters. Scientific and technological cooperation was further expanded. The two sides took solid steps to implement the cooperation agreements that the Torch Hightech Industry Development Center of the Chinese Ministry of Science and Technology and the Zhongguancun Science Park had signed with the Skolkovo Innovation Center of Russia, which was about exchanges and cooperation in science park, enterprise incubator, technology transfer and financing for innovation. Cooperation at the subnational level was carried out on various fronts. The two sides officially launched the cooperation mechanism between the upper and middle reaches of the Yangtze River and Volga Federal District, the first cooperation mechanism between non-adjacent regions of the two countries. Cross-border infrastructure development made steady progress. The Tongjiang River railway bridge project was expected to start soon. Thanks to the close coordination between and direction by the two heads of government, the two sides jointly fought the severe flood in the Heilongjiang River basin and minimized losses in the disaster-striken area. Environmental cooperation in the border areas was productive.

2. Sino-Russian Economic and Trade Relations

There are remarkable results in bilateral energy trade. In 2016, Russia became China’s biggest source of imports of crude oil and electricity as well as the fifth biggest source of import of coal, and China’s crude oil import volume from Russia hit a new historical record again. Both sides have constantly pushed forward major strategic cooperation programs, and made positive progress in upstream and downstream integrated cooperation in energy. In 2017, Russia’s exports in crude oil, coal and electricity to China have maintained a sound momentum.

According to the statistical data of the Russia Customs, the import and export volumes between Russia and China reached 66.11 billion dollars in 2016, increased by 4.0% year on year. Thereinto, Russia’s exports to China amounted to 28.02 billion dollars decreased by 2.0% year on year, accounting for 9.8% of Russia’s gross exports; Russia’s imports from China accounted to 38.09 billion dollars increased by 9.0% year on year, accounting for 20.9% of Russia’s gross imports. Russia’s deficit with China amounted to 10.07 billion dollars increased by 58.6% year on year. China is Russia’s second largest export market and the largest source of imports.

According to statistics from China’s General Administration of Customs, the bilateral trade volume between China and Russia in the first seven months in 2017 was 46.822 billion U.S. dollars, a year-on-year increase of 21.8 percent. China has remained as Russia’s largest trading partner for seven consecutive years.

3. Projects

(1) General Introduction

China and Russia enjoy sound foundation, broad space and great potential in energy cooperation. Under the current background of profound adjustment facing the world economy, both sides should continuously deepen energy cooperation, actively advance the processes of China-Russia East Route natural gas pipeline, Yamal liquefied natural gas and other projects, enhance upstream cooperation projects in oil and natural gas, carry out cooperation in gas storage, natural gas power generation and natural gas engine, and actively push forward cooperation in such areas as mutual recognition of standard and conformity assessment, so as to push bilateral energy cooperation for more practical achievements.

Since last year, the cooperation between the two sides in major projects like energy has been advanced steadily. The East Route natural gas pipeline project and Yamal liquefied natural gas (LNG) project are carried out smoothly, and the West-Route natural gas project is under negotiation.

①The China-Russia Crude Oil Pipeline

The pipeline starts in the Russian town of Skovorodino in the far-eastern Amur region and enters China at Mohe County before continuing to Daqing, a petrochemicals hub in northeastern China.

The pipeline is part of a bilateral loan-for-oil deal reached in February 2009 between the two countries. Under the deal, China makes a $25-billion-long-term loan to Russia while Russia supplies China with 300 million tons of oil through pipelines from 2011 until 2030.

Construction of the 999-kilometer pipeline began in 2009. Some 927 kilometers of the pipeline is in China while 72 kilometers of it is in Russia.

②The second China-Russia Crude Oil Pipeline

The second China-Russia crude oil starts in northeastern China’s Heilongjiang province, a move that expands the capability for oil transportation from Russia to China.

The pipeline, traversing the China-Russia border, is 941 km in length and 813 mm in diameter, with a capacity to transport 15 million tons of crude oil annually, according to China National Petroleum Corporation.

The pipeline is expected to be put into operation at the beginning of 2018.

It will run parallel to an existing pipeline－the first China-Russia crude oil pipeline that was put into use in 2011, which can also transport 15 million tons of oil each year.

③The China- Russia East Route Natural Gas Pipeline

Construction of the Chinese section of the China-Russia East Route natural gas pipeline was started in Heihe, northeast China’s Heilongjiang Province, June 29, 2015.

The 3,968-kilometer China-Russia East Route natural gas pipeline, which extends from gas fields in Russia’s Far East to east China’s Shanghai, started construction on Monday. It is designed to transport 38 billion cubic meters of natural gas from Russia to China every year.

The Russian part of the joint-venture pipeline, which started at the Kovyktin and the Chayandin gas fields, extended through existing pipelines in eastern Siberia and end in the Far East port city of Vladivostok.

The China-Russia East Route natural gas pipeline was jointly built by China National Petroleum Corporation (CNPC) and Gazprom of Russia, with the latter responsible for building the part within Russian borders.

The Russian part of the pipeline, officially named "the Power of Siberia" pipeline, has a designed capacity of transmitting 61 billion cubic meters of natural gas every year.

According to a CNPC-Gazprom contract, the Russian side will export 38 billion cubic meters of gas to China through the pipeline every year for a 30-year period starting from 2019.

4. The China-Russia Energy Cooperation Events

On July 4, 2017 local time, President Xi Jinping held talks with President Vladimir Putin of Russia at the Kremlin in Moscow. Speaking positively of China-Russia traditional friendship and outcomes of the development of bilateral relations, the two heads of state decided to make joint efforts to consolidate and develop bilateral comprehensive strategic partnership of coordination featuring equality, trust, mutual support, common prosperity and lasting friendship, so as to better benefit the two peoples and people of various countries.

The two countries agreed to boost the docking of the "Belt and Road" construction and the Eurasian Economic Union, facilitate trade development, expand mutual investment, push forward the implementation of major projects, actively build a strategic partnership in energy, promote cooperation in renewable energy sources, coal, hydroelectric development and other areas, drive transportation and infrastructure construction, deepen cooperation in such fields as science, technology, innovation, aviation, cyber security, commercial manufacturing, communication, agriculture, finance, environmental protection and Arctic affairs, and propel security cooperation.

On the afternoon of May 14, 2017, Premier Li Keqiang met with President Vladimir Putin of Russia at the Great Hall of the People who was in China for the Belt and Road Forum for International Cooperation. Li Keqiang expressed that China is willing to ride on the momentum with Russia to vigorously promote bilateral cooperation in finance, local affairs, agriculture, energy, civil aviation and other fields. Vladimir Putin expressed that Russia is willing to work with China to well implement the consensus on bilateral cooperation, promote cooperation on major projects in energy, transportation, aviation and aerospace and other fields, and expend people-to-people and cultural exchanges in education, sports, media, local affairs and other fields, in a bid to promote all-round development of Russia-China relations and cooperation.

On April 13, 2017 local time, Vice Premier Zhang Gaoli met with President Vladimir Putin of Russia in Moscow during his visit to Russia upon invitation.

Vice Premier Zhang Gaoli first conveyed the warm greetings and best wishes from President Xi Jinping. Vice Premier Zhang Gaoli said that in recent years, under the strategic guidance and the personal promotion of the two heads of state, China-Russia relations have kept setting new goals and reaching new strategic heights step by step, yielding fruitful achievements. Vice Premier Zhang Gaoli introduced the positive progress that China and Russia had recently made in the cooperation in such fields as energy, investment and finance, emphasized that the main task of his visit is to comprehensively review the achievements of cooperation in the fields mentioned above, and actively discuss new measures to implement the important consensus reached by the two heads of state, so as to prepare more achievements for the meeting between the two heads of state.

Vice Premier Zhang Gaoli pointed out that China will host the International Cooperation Summit Forum on the “Belt and Road” Initiative from May 14 to 15 this year in Beijing. China regards Russia as an important partner among the countries along the “Belt and Road” and will make considerate arrangements for President Vladimir Putin’s attendance at the forum. The docking between the construction of the “Belt and Road” and the Eurasian Economic Union (EEU) is the strategic consensus reached by President Xi Jinping and President Vladimir Putin. The relevant departments of the two sides are speeding up the promotion and implementation of the consensus and actively pushing forward cooperation in specific fields. China values most and actively supports the “Asia-Europe Partnership” initiative put forward by Russia, and the departments concerned of both countries will further study and discuss practical measures. The two sides should accelerate the construction of major energy projects, focus on expanding investment cooperation, and actively explore cooperation in fiscal and financial fields, so as to better promote the common development and revitalization of both countries.

President Vladimir Putin asked Vice Premier Zhang Gaoli to convey his warm greetings and best wishes to President Xi Jinping and expressed his delight for his future attendance at the International Cooperation Summit Forum on the “Belt and Road” initiative in China at the invitation of President Xi Jinping. He extended his welcome to Vice Premier Zhang Gaoli for his attendance at the relevant meetings of bilateral mechanisms in Russia, and pointed out that Russia-China bilateral trade volume had rapidly increased since last year, with the trade structure gradually improved. The cooperation between the two sides in major projects like energy has been advanced steadily. The East Route natural gas pipeline project and Yamal liquefied natural gas (LNG) project are carried out smoothly, and the West-Route natural gas project is under negotiation. President Vladimir Putin emphasized that Russia welcomes Chinese investors to actively participate in Russia’s economic development. The two sides, on the basis of the existing cooperation, should further explore new cooperation fields, so as to add new impetus into Russia-China comprehensive strategic partnership of coordination.

On April 12, 2017 local time, Vice Premier Zhang Gaoli and Deputy Prime Minister Arkady Dvorkovich of Russia held the Co-chairs’ Meeting of China-Russia Energy Cooperation Committee, exchanging views and reaching broad consensus on China-Russia cooperation in major energy projects. The two sides stressed to continue deepening energy cooperation, actively promote the progress of the China-Russia East-Route natural gas pipeline project and the Yamal LNG project, strengthen the upstream project cooperation in oil gas, carry out cooperation in gas storage, gas power generation, and gas engine fuel, and actively advance cooperation in standard recognition and conformity assessment, so as to push the energy cooperation between the two countries for more practical results.