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22 May 2014

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It's a great deal for China. Russia's selling at a substantial discount, and it has to extend its Siberian gas line a good distance in order to deliver the gas. It was also a move that was bound to happen eventually.

I predicted this just after the first round of sanctions. This deal will help Russia's balance of payments, and give it more room for maneuver, but it will encourage Russia to stay reliant on its extractive industries.

In the mid to long term, Russia has much to be concerned about China's continuing development and expansion. I doubt China will be as accommodating as the European nations, should he monkey with gas deliveries. China may well find the need to push up into Siberia, or west in replication of the Great Khan's progress. Some of the Stans may feel more comfortable kinship with China than with Russia.

I'd also note that the USSR and the PRC started out as the closest of brothers, but rapidly found irreconcilable differences. Will this era's leaders be able to do better?

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