Thursday, February 19, 2009

China and Russia New World Order: Cash and Energy

This news did not exactly shock me, but it reminded me of the new world order that is gradually emerging in international economy. For many decades, there was bitter relationship between China and Soviet Union or Russia. The two countries were both communist and they had bitter feud over who will be the leader in communist world. As a result, China entered into a good friendship with USA and in the end, there was a continuous sense of mistrust between the two neighbors Russia and China. Now, economics is more important than politics in our world today and that is why, Russia and China could enter into a $25 billion energy deal recently which would ensure a lot of cash for Russia and continuous fuel supply for China. Under the deal, China will give some money to Russia and in return, Russia will supply certain amount of oil every year for the next 20 years to China.

This is a very good deal for both the countries as they need cash and energy security. What is your idea about it? Will it be profitable for both the countries? Do you think that India should enter into this kind of deal with Russia and some other countries in Central Asia?