Chinese PM Li to meet Putin as ties deepen

Chinese PM Li to meet Putin as ties deepen

MOSCOW - Chinese Prime Minister Li Keqiang will meet Russian leader Vladimir Putin on Tuesday as Moscow, struggling with its deepest isolation since the end of the Cold War, seeks to deepen a key relationship.

The two nations on Monday pledged to increase efforts to promote a just world order as Li and his counterpart Dmitry Medvedev signed dozens of deals ranging from energy to finance.

They included an agreement to open a yuan-ruble swap line worth 150 billion yuan (S$31 billion) in an apparent bid to reduce dependence on the US dollar.

Li's first visit to Russia as prime minister comes at a sensitive time, with the Kremlin locked in a battle of wills with Washington and Brussels over the Ukraine, and with its economy shaken by several rounds of Western sanctions.

Accused by Kiev and the West of stoking a bloody insurgency in eastern Ukraine, Russia hopes intensified cooperation with Asia will help it ride out EU and US sanctions.

Russia's ruble on Monday slumped to new all-time lows against the euro and dollar despite the central bank spending billions to defend the currency as the spillover from the Ukraine crisis and falling oil prices pummel the economy.

The ruble dropped to 51.27 to the euro, breaking through a previous low seen in March in the wake of Moscow's annexation of the Black Sea peninsula of Crimea from Ukraine.

'Vast potential' for ties

After his talks with Li in Moscow, Medvedev said the two countries should think many moves ahead.

"My colleague Mr Prime Minister just recently noticed that our peoples like to play checkers and chess. And those who think strategically play checkers and chess well," Medvedev told reporters.

"And also those who think about the future play well, that is why we should think about the future, developing our relations for years to come." Li also resorted to allegory, saying Russia's famous nesting doll symbolised huge joint opportunities.

"I believe that the matryoshka symbolises the vast potential for cooperation between China and Russia," he said.

"Both countries are full of determination to develop eternal friendship and together defend peace and stability in the region and the world on the whole." Besides talks with Putin Tuesday, Li will attend an economic forum in Moscow with Medvedev.

The two countries also agreed to jointly celebrate the 70th anniversary of the defeat of Nazi Germany in World War II next year, a hugely symbolic date in Russia.

Li said the goal of the festivities would be, among other things, to "protect international justice and international order after the war." China has spoken out against Western sanctions against Russia and has called on all sides to reach a political settlement over Ukraine.

China a much-needed ally

Li's three-day Russia trip is part of a week-long visit to Europe.

Once bitter foes during the Cold War, Moscow and Beijing have over the past years ramped up cooperation, driven by a desire to counterbalance US global dominance.

The two nations often work in lockstep at the UN Security Council, using their veto power as permanent council members to counter the West on issues such as the Syria crisis.

Russia's showdown with the West over Ukraine has given Moscow a new impetus to court Beijing.

Resource-hungry China is seeking to diversify its sources of energy amid booming domestic consumption, while Russia is seeking to tap fast-developing Asian markets.

After a decade of tough negotiations China and Russia inked a 30-year, $400-billion agreement in May that will eventually involve 38 billion cubic metres of gas annually.

Critics however disparaged the terms, saying that Putin, in his bid to spite the West, signed a lopsided agreement that favoured China.

Ahead of his Moscow visit, Li travelled to Germany for talks with Chancellor Angela Merkel. He will also participate in a summit in Milan later this week.

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