China will benefit from cheap Russian gas – eventually

Notwithstanding the “unlimited” friendship between China and Russia, President Xi Jinping of China seems to be at least somewhat miffed by Russian President Vladimir Putin. To find out why this might be, consider the energy sector.

In theory, in the long term, Russia’s isolation from its major Western oil and gas customers could be a boon for China, especially when it comes to natural gas, since the two countries have already agreed to expand the network of pipelines existing between them. But there is a problem: for now, China is a coal-and-oil economy, and the transition to gas will be long and costly. Meanwhile, Mr. Putin’s war in Ukraine has helped to skyrocket coal and oil prices. All of this comes as China’s economy is already grappling with a punishing housing downturn and deeply discouraged consumers.


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