Why is China in no hurry to build the China-Russia-Mongolia gas pipeline?
There is a gas pipeline project called "Power of Siberia 2" between China, Russia and Mongolia, which has been delayed for a long time and has not been officially launched. The Russians are keen to start construction as soon as possible, because they believe that it will increase energy exports to China and increase their income and influence. But the Chinese side did not show much interest, and even showed some lukewarmness. This makes Russia strange and unhappy. They wonder why China is not in a hurry to build this gas pipeline and what else they need to do to convince China.
Recently, a Russian newspaper "VZGLYAD" published an article analyzing the current state of Sino-Russian cooperation in the field of energy and came to the conclusion that China may not want to allow the "Power of Siberia-2" gas pipeline to be opened soon. The article also cites the views of two Russian energy experts to support its assertion.
The main arguments of the article are as follows:
1. China's natural gas imports from Russia are very low, even lower than those imported from other countries. Russia's natural gas to China is about $300 thousand cubic meters, while China's gas imports from Central Asian countries such as Turkmenistan are between $350 and $370 thousand cubic meters. This shows that China has a lot of room for bargaining and can wait for Russia to offer more favorable terms.
2. China's energy demand has been growing, and China is also helping Central Asian countries improve their energy infrastructure and increase their gas transmission capacity. China has adopted the method of loan-for-energy to help Central Asian countries get rid of the dilemma of energy backwardness, and also increase their own energy ** and diversity.
3. China's attitude towards the "Power of Siberia 2" gas pipeline is very cold, and it has not expressed a clear will and position. It stands to reason that China should be interested in energy cooperation with Russia and Mongolia, which would increase China's energy security and stability. But in fact, there is not much comment and feedback on this project in China.
4. Mongolia is still trying to win China's support, and the Mongolian prime minister even announced in advance that the "Power of Siberia 2" gas pipeline project will start in 2024. But China has not signed the contract, making the prospects for cooperation uncertain. Russia believes that this shows that China's energy cooperation with Russia has reached its limit, and there is no more space and motivation.
Is China's reluctance to cooperate with Russia and Mongolia because China does not need energy? Apparently not. China is one of the world's largest energy consumers, and its demand for energy is almost endless. However, China is not a country without energy, China has its own energy production and reserves, and China also has its own energy strategy and balance. China will not put all its eggs in one basket, nor will it completely submit to the will of its neighbors, especially when China has huge ideological differences from Russia and Mongolia, and China will make reasonable choices out of its own interests and security.
I would like to make a few comments about myself:
First, China will not easily get involved in Russia's affairs, China only cares about its own affairs.
The Power of Siberia-2 gas pipeline project, if it is to be carried out, must be borne by Russia and Mongolia for all construction costs. China will not enter into a vague agreement with its neighbors for an uncertain project. What will China do if there are problems with Russia and Mongolia in the future? Besides, everyone knows how much strength and credibility Mongolia has.
In addition, we should pay attention to one phenomenon: Russia wants to pull China to its side. China refuses to provide military equipment to Russia, and Russia openly advertises its import of Chinese off-road vehicles; China just provided military uniforms to Ukraine, and Russia made a fuss and directly seized 8 containers.
It is necessary to distance itself from Russia, so that Russia can withstand more pressure from confrontation with NATO. Wouldn't it be more cost-effective to wait until Russia is unable to do so, and China can take the opportunity to reduce imports of natural gas, coal, timber, and oil**? We should learn from our forefathers and educate ourselves with the mistakes of others.
Second, Russia and Mongolia do not know enough about China.
To clarify: in 2023, China imported about 500 million tons of oil, but also produced 200 million tons of oil. Since 70% of the oil is used for automobile consumption, if China fully promotes electric vehicles, then this part of the demand will be reduced, and China will no longer need to rely on Saudi Arabia, Russia and other major producers.
Similarly, last year, China produced 229.7 billion cubic meters of natural gas and imported 1200 million tons (about 170 billion cubic meters), accounting for only 42% of China's total demand5%。If China intensifies the extraction and production of natural gas, it is estimated that the proportion of this part will fall to less than 30%.
On the whole, China is not short of energy, but in order to balance industrial production capacity and enhance its connection and cohesion with the world, China has taken the initiative to divide part of its market share. In this case, Russia's insistence on expanding energy exports to China is somewhat redundant and will interfere with China's overall planning.