The Russia-China Gas Deal — What Does It Mean for the West?

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In the short-run, the Russia-China gas deal means more to Russia than it does to the West. While the deal has been under discussion for more than a decade, the prospect of European sanctions, accompanied by the prospect of Europe looking to eventually wean itself off Russian gas made finalizing the deal more urgent in Moscow. As a result, the Russians seem to have given in on the main sticking point, namely price. Most press reports indicate that the Chinese will be paying around $350 per thousand cubic meters once various pre-payments and discounts are factored in. If accurate, this figure would be on the low end of what Russia’s European customers pay, and would make the overall profitability of the deal questionable. Once the planned pipeline to China is up and running, though, Russia will be more able to weather the impact of European sanctions, even those affecting its energy industry, by continuing sales to China. Ensuring that access to the Chinese market seems to be Moscow’s major concern. The deal does not by itself affect Europe that much, apart from sending a signal that Moscow has other options.

The potential impact for the West will be greater over the longer term. It provides an impetus for bringing online new gas fields in Eastern Siberia, which could can contribute to Putin’s aim of developing Russia’s Asian periphery and more fully integrating Russia with the dynamic economies of the Asia-Pacific region. Especially if this agreement is the start of a more strategic rapprochement between a revisionist China and a revisionist Russia, it could also signal that Russia feels less constrained by its ties to Europe and the West in general. Such a Russia could be more willing to challenge the status quo in Europe and the former Soviet Union, as it has in Ukraine, believing that Beijing will insulate it from the consequences of a deteriorating relationship with the West.​

Dr. Jeffrey Mankoff is deputy director and fellow with the Center for Strategic and International Studies (CSIS) Russia and Eurasia Program. He is the author of Russian Foreign Policy: The Return of Great Power Politics.

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