Medvedev Heads to China on His First Foreign Trip as Russia's New President

MOSCOW – For his first foreign tour as Russian president, Dmitry Medvedev this week heads east to China and not west to the old established powers.

It's a sign of how the two resurgent giants have buried Cold War rivalries and built a "strategic partnership" intended to serve as a counterweight to U.S. dominance.

But while the two countries share many common interests, there is continued friction in key areas — and the new cordial tone masks some harsh political realities.

Oil and gas are at the center of what brings the two together and threatens to drive them apart: China's hungry economy needs fuel, and Russia has lots of it to sell — but price disputes and geopolitics are getting in the way of their ability to cut deals.

Moscow and Beijing are locked in a struggle for influence in their own backyards: the countries of ex-Soviet Central Asia whose vast energy reserves and strategic location make them a critical prize in a new "Great Game" unfolding among world powers.

As if to stress that Russia remains the dominant player in the region, Medvedev is making a stopover Thursday in Kazakhstan before flying Friday to Beijing for two days of talks with President Hu Jintao and other Chinese leaders.

Still, there's rich symbolism in Medvedev's choice of China as the main destination of his first foreign trip. When his predecessor, Vladimir Putin, went abroad for the first time as president in 2000, he traveled to London — via Belarus — with a message that Russia wanted closer ties to the West.

In recent years, China and Russia have made highly symbolic political overtures to one another, holding joint military maneuvers and engaging in high-level talks on creating a "multi-polar world."

They have taken a coordinated stance on several global issues, sharing opposition to Kosovo's independence and U.S. missile defense plans, and taking a similar approach to the Iran nuclear crisis.

Putin greatly strengthened relations with China, reaching a long-delayed agreement on demarcation of the 2,700 mile (4,300-kilometer) border.

However, economic ties have lagged behind.

Bilateral trade rose by about one-third last year to some $48 billion (euro31 billion), but still accounts for only 2 percent of China's global trade. China does more than eight times as much business with the United States.

Beijing has shown a growing demand for Russian energy resources, urging Moscow to build an oil pipeline from Siberia. But construction has dragged on slower than expected, as Russia and China bicker over oil prices, said Vladimir Portyakov, a specialist in Sino-Russian ties.

A separate pipeline to Russia's Pacific coast will force China to compete for Siberian crude with Japan. And the construction of natural gas pipelines to China also has been blocked by price arguments, Portyakov said.

Russia has sought to retain its monopoly on transit of Central Asia's energy resources, but China has won a cut of the region's riches, reaching an oil pipeline deal with Kazakhstan and negotiating a gas agreement with Turkmenistan.

"The only problem with Central Asian energy resources for Russia is that it has a rival — China," said Dosym Satpayev, director of the Almaty-based analytical institute Risk Assessment Group. "And Central Asia may not have enough resources to go around."

There have been other tensions and uncertainties behind the friendly diplomatic facade.

Amid Russia's population decline, residents of its sparsely populated Far East have become increasingly worried about the growing presence of Chinese migrants.

"There are some 8 million residents living along the border on the Russian side and about 300 million people on the other side," said Alexander Konovalov, head of the Moscow-based Institute of Strategic Assessment. "The border is like a thin membrane under huge pressure."

The Kremlin has ignored critics who questioned the wisdom of arming a potential rival, selling billions of dollars worth of jets, missiles, submarines and destroyers to Beijing.

But the arms trade has slumped in recent years as China wanted more advanced weapons, which Moscow was reluctant to sell.

"There have been no new weapons contracts," said Andrei Ostrovsky, head of the Moscow-based Center for Economic and Social Studies of China. "China has reached a new level, and it no longer wants old Russian military technologies."