HONG KONG -- Russia is in the enviable position of being wooed simultaneously by Asia's two main powers, China and Japan. At the same time, it has to walk a fine line because it is unlikely to be able to please both countries.
Two years ago, China and Russia signed a strategic agreement concerning the construction of a 2,400-km pipeline at a cost of $1.7 billion to bring Russian oil from Angarsk, in eastern Siberia, to Daqing, in Heilongjiang province. The Chinese, who were self-sufficient in oil until about a decade ago, now require increasing imports to fuel their modernization drive and have become the world's second-largest oil consumer, second only to the United States.
However, Japan cast a cloud over China's plans by making a bid for a much longer and more expensive pipeline to be built from Angarsk to the Russian coastal city of Nakhodka, on the Pacific coast, from where the oil can be put aboard tankers to be shipped to Japan. The Japanese want to reduce their dependency on oil from the unstable Middle East. Last year, Transneft, the state-owned pipeline monopoly, put forward a plan for an Angarsk-Nakhodka pipeline and said it had been approved by Russian President Vladimir Putin.