Russian President Vladimir Putin's visit to China last week marked yet another step in the two countries' move towards closer economic and political relations. It was the latest move in a 10-year-old effort to form a 'strategic partnership of co-operation'.
During Mr Putin's state visit, Beijing and Moscow signed 22 agreements covering politics, diplomacy, energy, investment, finance and communications. Mr Putin and President Hu Jintao signed a joint statement in which they agreed that 'bilateral relations are at an unprecedented level of development'. The two countries hold similar positions on major international issues, such as the Iranian and North Korean nuclear crises, the Palestine-Israeli negotiation process and Iraq.
Understandably, the media focused on the Russian agreement to build two large gas pipelines to China - costing up to US$10 billion - within five years. Each pipeline would be capable of delivering 30 billion to 40 billion cubic metres of gas per year. As for the crude oil pipeline from eastern Siberia to the Pacific Ocean, the two sides agreed to proceed with a feasibility study on building a spur line to China.
Still, the relationship is not trouble-free. Mr Putin, addressing a China-Russia business forum, pointedly referred to 'serious problems' in their mutual trade structure that could lead to 'instabilities'. He called on China to increase imports of Russian machinery and equipment, which have been plummeting in the past few years.
'In 2005,' Mr Putin said, 'Russia's export of mechanical and electronic products to China dropped almost 50 per cent. At the same time, China's exports of the same products to Russia increased remarkably.'
Although Russian exports are increasing on the whole, more than 90 per cent consist of raw materials. China is also the leading customer for Russia's defence industry, buying advanced warplanes, warships and missile systems. Overall, bilateral trade is increasing rapidly, from US$20 billion in 2004 to more than US$29 billion last year.
The bilateral relationship is, to a large extent, being driven by geopolitics since neither likes the United States being the only superpower. While Washington seldom reacts publicly to the improving China-Russia relationship, it is observing developments with some concern. The US has moved to improve its relations with Japan, Australia, Vietnam and India.