The locals are doing the wrong dances. These Mandarin speakers must have sipped a little too much Stoli and besotted themselves into a state of ethnic confusion that causes them to skip and kick about, low to the ground like Cossacks. That, or they just love Russia.

Fresh ink on contracts between Russia's natural gas monopoly Gazprom and the Chinese government lead me to believe that the latter is true: China is fawning over her Slavic neighbor to the north. The one with the resources that China needs so badly Hu Jintao is willing to gloss over half a century of tension between the world's giant red rivals.

Though one of these countries has shed its Leninist stripes in public and the other maintains a façade of socialism, there is more than meets the eye when it comes to pipelines and politics.

You've read about Gazprom before in Energy and Capital (Gazprom King), but that was largely in reference to Russia's fuel giant and its relationship to the western supply chain i.e. Europe. Now we see an earth-moving step by the natural gas giant in the southern direction, over the Great Wall and into the world's thirstiest economy.

Russia's ability to choke off gas supplies to countries like Ukraine worries the European Union to no end. Following the January incident when Moscow turned down the juice on the line to Kiev (in this case a "no pressure deal" is a bad thing), EU countries set astir with internal and Union-wide debates on how to achieve energy independence.

Their response was one of fear and frustration in the face of Russia's action, and EU countries are more likely to turn a cold shoulder to Putin and his successors (if he ever leaves office) when the other shoulder can stay toasty warm with renewable fuel.

Impatient Putin

Putin is not a patient man, however, and he will certainly not wait around for the Europeans anymore than they are willing to wait for Russia to dismantle Gazprom in favor of market competition.

So the Russia-China deal is being framed as one of energy independence, not just on the buyer's part, but the seller's. BBC Monitoring's sampling of news outlets in Russia and China finds the Muscovites giddy not just for the new market but also for the freedom not to deal with those pesky EU members and their spoony desire for reliable energy.

And both countries are moving to bolster support for a partnership by operating on a grassroots, cultural level as well as the political echelon.

2006 is the Year of Russia in China, and 2007 is to be the Year of China in Russia. Both jubilees are intended to increase the frequency of interaction and thus understanding between the two countries.

There is no greater indicator for cooperation than state visits, and Hu Jintao and Vladimir Putin have huddled 5 times in the past year alone.

Since Russia turned first toward Europe following the breakdown of the Soviet Union and opening of life to a market-based reality, it has only recently come around to realizing the bling bubbling just beneath, in China.

In 1998 there were approximately 700,000 Russian visitors to China, and last year more than 2.1 million. But Chinese interest in Russia has lagged, some say due to images of Russia rooted in the 1950s and the era of the "great friendship" that soon went sour due to rivalry for the Marxist standard.

Today, cooperation is the keyword. The Shanghai Cooperation Organization, largely ignored by investors, media, and leaders alike, united China and Russia with four of the -stans (Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan).

Circling the Resource Wagons

The SCO pact is little more than a circling of the resource wagons for China, and it aims to secure the Middle Kingdom's energy supply from resource-rich and Central Asia and Siberia for years to come. It is in this context that Russia and China stand side-by-side in their deflection of UN action against Iran, and the SCO also creates conditions conducive to joint military exercises like the ones recently carried out by Russia and China.

The pipeline deal announced Tuesday will send some 2.8 trillion cubic feet of gas to China from Siberia every year, and the 2500 mile-long pipeline will take some 5 years to construct. Russian sources put the cost at somewhere around $10 billion, and we will see how much of the bill China foots.

Though the gas deal is huge, there is a gaping hole in this news where many expected an oil arrangement to appear. Russia and China have been in ongoing talks regarding China's desire to reduce its dependence on Middle Eastern oil (over half of its current supply) and Russia's position to supply 1/3 of Chinese oil consumption by 2030. Yet no verdict was reached on the flow of black gold from the taiga and steppe down to Shanghai.

What this means is that Russia is playing its oil card on two tables: China and Europe.

If Europe gets uppity again, Russia will make an overture to China.

If China holds its ground and waits, Moscow will probably give Beijing a good offer on a hydrocarbon conduit.

But if Beijing decides that, even with the relief of its new Siberian gas, it is still falling far short on energy requirements, the Chinese may use their ample cash on hand to make the Russians an offer they simply cannot refuse, and the construction of an oil pipeline could be announced early enough for the two projects to begin concurrently.

- Sam Hopkins

Media / Interview Requests? Click Here.