China, Russia try to repair ties by signing trade deals worth several billion dollars

China and Russia, in a bid to repair ties strained by a trade spat this summer, signed contracts valued at several billion dollars but didn’t reach a breakthrough in protracted negotiations on a deal to supply Russian gas to China. Among issues discussed during a recent visit to Beijing by Russian Prime Minister Vladimir Putin was the prospect of settling trade between the two neighbours in their domestic currencies -- part of China’s efforts to bolster the yuan as a regional currency.

China and Russia are eager to reinforce relations that frayed in past months after Russia accused Chinese traders of selling smuggled goods, and shut down a wholesale market near Moscow where about 60,000 Chinese merchants worked. The two say they want to focus on common ground: China is hungrily eyeing Russia’s natural resources, and Russia, battered by last year’s collapse of oil prices and credit, wants Chinese investment to develop its economy.

“China is willing to work together with Russia to achieve greater developments in bilateral ties,” Chinese Premier Wen Jiabao said. One way to foster cooperation is “to create major projects in crude oil, natural gas and nuclear power”.
The nuclear powers also view each other with suspicion. Russia fears China’s rise and is concerned about the influx of Chinese traders to its sparsely populated east, while China is wary of Russia’s influence over the resource-rich Central Asian countries of the former Soviet Union.