China is planning to buy or increase the share of Russian enterprise energy and commodities corporations.
Beijing is telling its state-owned firms to find any opportunities for potential investments in Russian companies or assets, including Aluminum Corp. of China and China Minmetals Corp, China National Petroleum Corp. (CNPC), and China Petrochemical Corp. Among them, some petro firms are in the first talks stage with Russian energy companies.
Bloomberg reported that the plan was based on intensified energy and food security.
The move from China comes as Western companies are abandoning the Russian market. Oil giants such as BP, Shell, and Exxon Mobil walked away, getting rid of their billion-dollar investments in the Russian energy industry.
China did invest in the Russian energy sector before, with CNPC having a 20% investment in the Yamal LNG and a 10% stake in Arctic LNG 2. China National Offshore Oil Corporation (Cnooc Ltd.) also has a 10% stake in Arctic.
Last month, two Russian energy giants, Gazprom and Rosneft PJSC, were with Putin in Beijing during the Winter Olympics visit to sign deals with China counterparts.
According to Bloomberg, Russian energy exports to China have doubled to about 60 billion dollars for the last five years.
The relationship between Beijing and Moscow was getting closer when both countries saw their trading get a new record,
Nikkei Asia, on March 8, reported that trade between the two countries in Jan and Feb had increased considerably. The data showed that Beijing’s imports from Russia rose 35.8 percent and outpaced the import growth rate of 15.5 percent for the same period.
China’s exports to Russia reached 41.5 percent. Russia has topped the list of major trading partners and outpaced China’s export growth rate of 16.3 percent in the first two months of the year.
Since Russia invaded Ukraine, Western countries cut off Russia’s economy from the global financial system; at least the four biggest Russian banks were removed from the SWIFT global financial messaging system.
Reuters reported on March 4 that as the country’s businesses face troubles as Western countries impose sanctions, a Chinese state bank received around 300 requests to open new accounts from Russian firms.