Chinese Prime Minister Li Keqiang and Russian Prime Minister Dmitry Medvedev signed 38 agreements promoting economic cooperation between the two countries on Monday in Moscow. Two major agreements concerned a natural gas pipeline and a yuan-ruble currency exchange.
The currency exchange deal—set to last for the next three years—is worth up to $24.5 billion. It allows China and Russia to trade with the yuan and the ruble without buying them on currency markets, with the intention of decreasing dependence on the US dollar and the euro. Their goal is to reach $100 billion in trade by 2015.
Li and Medvedev also finalized details involving the Power of Siberia pipeline, which will carry natural gas from Siberia to northeast China when it is completed in 2018. The culmination of a decade of negotiations, Power of Siberia broke ground in Russia at the beginning of September, and China is now set to start construction on its end of the pipeline. With the future completion of the Power of Siberia, as well as Russian natural gas giant Gazprom’s still-under-negotiation Altai pipeline, China would import a yearly total of 68 billion cubic meters of natural gas and would replace Germany as Russia’s largest natural gas customer.
The deals will help China diversify its energy sources, which are now heavily reliant on coal. They will also help Russia offset the pressure of western sanctions imposed over the past year in response to Russia’s involvement in Ukraine.
Li’s visit to Moscow comes as part of a week-long trip to Europe preceding the Asia-Europe Meeting, kicking off today in Milan, Italy.