Russia signs deals with China to help weather sanctions

[Moscow] Russia and China signed energy, finance and trade deals on Monday hailed by Moscow as evidence a policy turn towards Asia will help it weather Western sanctions imposed over the Ukraine crisis.

The agreements, signed during a visit to Moscow by Chinese Premier Li Keqiang, built on moves by President Vladimir Putin to look east for business and financing that are now out of bounds in the United States and the European Union. "I consider it important that, in spite of the difficult situation, we are opening up new possibilities," Russian Prime Minister Dmitry Medvedev said after 38 agreements were signed.

They included a governmental accord to cooperate on natural gas supplies via what is called the eastern route, essential for a US$400-billion, 30-year gas supply deal signed in May to go into force.

State oil producer Rosneft and China National Petroleum Corporation signed an agreement on deeper cooperation, and banks VTB, VEB and Russian Agriculture Bank, which like Rosneft are hit by sanctions, signed framework agreements with China Exim bank to open credit lines.

The two countries also finalised an agreement on a local currency swap worth 150 billion yuan (US$25 billion), allowing them to increase trade in domestic currencies and reduce dependence on the US dollar in bilateral payments.

Mobile phone operator MegaFon and China Development Bank agreed to arrange financing of US$500 million.

The deals were among the first concrete signs that Russia's decision to turn more to Asia is producing results since the gas supply deal was reached during a visit to Shanghai by Putin.

The EU and the United States show no signs of lifting sanctions imposed over Russia's annexation of the Crimea peninsula and backing of separatists who have risen up in east Ukraine. Moscow denies sending troops and weapons to Ukraine. REUTERS