- The Washington Times - Tuesday, November 11, 2014

Behind the scenes in Beijing this week, the U.S. and Russia are engaging in a high-stakes power struggle as the two former Cold War foes vie to become the No. 1 economic ally of rising superpower China.

President Obama and Russian President Vladimir Putin — who had a series of brief, chilly exchanges over the past two days — are competing for China’s affection and, more important, to become the nation’s key business partner. Each leader is pushing hard for deals with Beijing, and early results indicate Mr. Putin may have the upper hand.

Mr. Putin and Chinese President Xi Jinping signed a memorandum of understanding Monday to construct a natural gas supply route to China. The project reportedly would provide China with more than 1 trillion cubic feet of gas each year.


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The deal isn’t final, but it would represent a major coup for Russia, which desperately needs new business and trading partners in the wake of major economic sanctions imposed by the U.S. and its economic allies.

The sanctions were brought as retaliation for Russia’s aggressive actions in eastern Ukraine.



Meanwhile, Mr. Obama is struggling to bring a major trade deal with China to the finish line, though there are signs of progress at this week’s Asia-Pacific Economic Cooperation summit.

The president said this week that the two nations are nearing an agreement to expand the scope of goods covered by the Information Technology Agreement. An expansion of the deal would remove tariffs on a number of high-tech products.

The White House also is touting an extension of visa validity between the U.S. and China.

But analysts say Russia’s looming gas deal with China is closer to the kind of groundbreaking economic agreement that the U.S. has failed to reach with Beijing.

“You have to give some credit to Washington and Beijing that they have now made some compromises to move forward on [the Information Technology Agreement]. It’s not an earth-shattering deal, but it’s hard to have earth-shattering deals these days. The mega-[gas] deal between Russia and China comes closer,” said Patrick M. Cronin, senior director of the Asia-Pacific Security Program at the Center for a New American Security.

“Everybody is wooing China in Beijing at APEC. China is an important partner for Russia, especially at a time when Russia is being squeezed by Europe and the United States and others over its aggression in Ukraine. Russia’s pushing back and saying, ‘We’re not going to be contained,’” he said.

That resistance, former Obama administration officials say, is evidence that Moscow senses a power vacuum in the region and wants to fill it by deepening ties with Beijing.

Speaking on CNN on Monday, former U.S. Ambassador to China Jon Huntsman said he fears Mr. Putin may nudge America out of the picture.

“When there’s a vacuum, something fills that vacuum, and right now it looks like Putin is making some moves to fill that vacuum,” he said.

As they compete behind the scenes at the summit, Mr. Obama and Mr. Putin also have come face to face.

On Monday, they walked along a lake outside of Beijing with Mr. Xi and had brief, cold words, according to reporters traveling with the president.

“It’s beautiful, isn’t it?” Mr. Putin asked Mr. Obama, who responded with a simple, “Yes.”

The two men also spoke three times Tuesday for a total of 15 to 20 minutes, the White House said. Their conversations centered on Iran, Syria and Ukraine, though administration officials would give no further detail.

Mr. Obama hasn’t acknowledged publicly that he is competing with Moscow. Instead, he has touted U.S.-Chinese cooperation, particularly on the visa validity extension and the Information Technology Agreement.

“This is where the trade facilitation agreement started. It was APEC’s work that led to the Information Technology Agreement — the ITA — which we are now negotiating to expand,” the president said Tuesday during an APEC session. “So it’s fitting that we’re here with our APEC colleagues to share the news that the United States and China have reached an understanding on the ITA that we hope will contribute to a rapid conclusion.”

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