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Xi hails deepening ties with Putin as US trade war flares

China's President Xi Jinping and Russia's President Vladimir Putin, attend an event in Vladivostok, Russia, on Sept. 12, 2018.

ANDREY RUDAKO/BLOOMBERG

By STEPAN KRAVCHENKO AND HENRY MEYER | Bloomberg | Published: June 5, 2019

Chinese President Xi Jinping touted a new level of relations with Vladimir Putin as he embarked on a three-day visit to Russia that highlights a deepening partnership between the two countries as both face growing tensions with the U.S.

"Step by step, we've been able to bring our relations to the highest level in history," Xi said, according to a Kremlin transcript of their meeting. The countries' position "on key world problems are close," the Russian leader said, referring to the Chinese leader as his "dear friend."

Xi and Putin presided over the signature of about 30 documents after the talks. including an accord for Huawei Technologies Co., which faces a U.S. ban from 5G networks, to start pilot zones in Russia with Mobile TeleSystems PJSC. Bilateral trade increased last year by about a quarter to a record $108 billion. The countries' first natural gas pipeline is due to open later this year and China is investing in Russia's Yamal Arctic LNG project.

Xi's warm embrace of Putin comes as China's locked in an escalating trade war with Washington. Russia and China have stepped up their economic and defense ties and are coordinating more closely on major international issues such as Syria, Iran and North Korea, amid a shared opposition to U.S. global dominance. Xi addresses a flagship investment forum Friday in Putin's hometown of St. Petersburg.

China sees Russia as a "large, friendly nuclear-armed neighbor" and as a key source of arms and energy, said Alexander Gabuev, head of the Carnegie Moscow Center's Russia in the Asia-Pacific Program. Its focus on Russia has grown since U.S. President Donald Trump came to power with a far more confrontational policy, he said.

Still, Russia needs China much more than the other way round. "For Russia, China is a big lifeline, but for China, Russia is not as important as the strategic relationship with the U.S. or Japan," Gabuev said.

While constrained by the huge imbalance in the size of the countries' economies, Russia has sought to attract more Chinese investment and trade to compensate for the chill in ties with the West since the 2014 standoff over Ukraine sparked a chill in ties with the West. The share of trade with Russia held by China has almost doubled to 20% since then, at Europe's expense. About 1,000 Chinese officials and business executives will attend the St. Petersburg International Economic Forum, the biggest foreign delegation.

Trump and other Western leaders gathered on the south coast of England Wednesday to commemorate the 75th anniversary of the D-Day landings in World War II. Putin participated in the celebration five years ago but wasn't invited this time.

Xi brought with him two Chinese pandas for the Moscow Zoo. The two leaders will also see a performance at Moscow's famed Bolshoi Theater. The Chinese president, who attends the opening of a Chinese car plant Wednesday, will leave for St. Petersburg Thursday, where he'll receive an honorary doctorate from Putin's alma mater.
 

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