China Reform Monitor: No. 1044

June 21:

Over the next 25 years China will buy 365 million tons of oil from Russia at a total cost of between $60-$270 billion. The deal between China National Petroleum Corp. and Russia’s Rosneft was signed in St. Petersburg, at a ceremony attended by China’s Vice-Premier, Zhang Gaoli, and Russian President Vladimir Putin. Russia wants to sell China more oil and reduce its dependence on exports to Europe. In 2009, the Kremlin released a report entitled “Russia’s Energy Strategy Through 2030,” which stated: “The share of liquid hydrocarbon deliveries to Europe should steadily decrease in favor of deliveries to the east. The share of the latter should increase from 6 percent to 20-25 percent for oil and from 0 percent to 20 percent for gas. These deliveries should contribute to the development of Russia’s eastern territories, reducing the number of people leaving that region.” The Moscow Times reports that the new deal will stretch Rosneft’s current resources and hurt Russians: “To fulfill its export commitments to China, Rosneft has already stopped fulfilling its contractual oil supply obligations to the Omsk Oil Refinery that produces gasoline for Russia's domestic market.”

China Coal Technology & Engineering Group has won a $101.3 million bid to upgrade the coal mining system in Surxondaryo, Uzbekistan, the Novyy Vek newspaper reports. A $89.5 million loan from the Chinese Eximbank will finance the project along with $11.8 million from the Uzbek side. Meanwhile, in 2016 China’s Harbin Electric International Company Ltd will complete a new $242.6 million, 130-150 MW high-ash coal powered generator for Uzbekistan’s Angren thermal power plant. That project will be financed with a $165.6 million loan also from China’s Eximbank and $75.1 million from Uzbekistan.

"China Coal Technology & Engineering Group expands production of coal in Surxondaryo" published by Uzbek UzDaily.uz news website on 21 June.
“Harbin Power to modernize Angren thermal power plant" published by Uzbek UzDaily.uz news website on 20 June.

June 25:

Japan’s new Defense Ministry White Paper claims its Self-Defense Forces (SDF) “are vigilant against China’s military build-up,” Kyodo news reports. Over the past decade China has quadrupled its defense budget and its lack of military transparency remains “a concern,” it said. In response, Japan will “beef up the SDF’s capability to dispatch troops to remote areas and conduct joint drills with the U.S. military to prepare the SDF to recapture any lost control of remote islands.” The white paper also said Japan is watching U.S. defense spending cuts and their impact on Asia and noted that: “The U.S. military’s MV-22 Osprey aircraft are expected to strengthen U.S. deterrence.”

June 27:

In comments carried by the official People’s Daily, China’s Foreign Ministry spokesperson criticized Japan’s White Paper claiming: “China is transparent in its military’s strategic intent and poses no threat. Japan is deliberately creating tensions. We hope they follow the historical trend, seriously re-examine, take a deep look at their history of aggression and do more to facilitate regional peace and stability.”

June 28:

China will send nearly 400 peacekeepers to join the UN Multidimensional Integrated Stabilization Mission in Mali (MINUSMA) and for first time they will include armed security forces. Along with its engineering and medical teams, the PLA will now send “guard” teams. “The Chinese security force is a guard team that will mainly be responsible for the security of the MINUSMA headquarters and the living areas of peacekeeping forces,” the official People’s Daily reports. To date China has dispatched more than 20,000 military personnel, police and civil affairs officials for UN peacekeeping missions, making it the biggest contributor among the five permanent members of the UN Security Council. A total of 1,645 Chinese personnel are currently participating in nine UN peacekeeping missions.