Debaltseve – After the Capture

The recent capture of Debaltseve by the forces of the Donetsk and Luhansk People’s Republics has been widely regarded by many commentators as a major defeat and a humiliation of Ukrainian arms.[1] This view, as this post intends to lay out, is an incorrect one. To analyze and assess properly the results of the battle, I will begin with an examination of the arguments for why it was a “defeat” made by commentators. Firstly, they argue that the Ukrainians lost territory which they had expected to hold. Secondly, commentators argue that the withdrawal from Debaltseve was characterized by “hastiness” and ipso facto weakness, indecision, nearly leading to a rout. Thirdly, they argue that the Ukrainians were overmatched and overpowered on the ground, and the results of the battle clearly show it. After examining these arguments, it is worth examining a parallel issue with parsing the results of Debaltseve – accurately determing strengths and losses. Having analyzed all of these, it will then be possible to gauge whether and in what degree Debaltseve can be considered a defeat for Ukraine.

 

The Area of Operations for the Debaltseve Pocket
The Area of Operations for the Debaltseve Pocket

 

Why a defeat? The three main justifications

As stated before, the first and most obvious justification is that the Ukrainian forces retreated from a position which they were ordered to defend. This is clearly unsurprising. It is uncontroversial to state that it is undesirable for the Ukrainian military, nominally sworn to militarily retaking all of Donetsk and Luhansk oblasts, to lose its only salient into the enemy frontline. However, the physical scale of the retreat, as has not been pointed out by these observers, is relatively limited – only 20km to the NW.[2] As a result the mere fact that Ukrainian forces gave up territory to the separatists cannot be seen as important in and of itself. Realistically, it will only be seen as important if the retreat was brought on by losses, logistical issues, or was a preemptive withdrawal brought about by the concentration of immense enemy strength in the region.

The second justification for the characterization observers have noted that the retreat was “hasty” and seemingly not-planned. Protestations from volunteer battalion commanders of the poor planning have been widely covered.[3] However the commanders of some of those units couple these protestations with demands that that the high command should afford the volunteer battalions a separate intelligence and command structure, a fanciful demand and one which would serve to strengthen these commanders political ambitions.[4] However, while the Ukrainian forces in the Debaltseve salient were clearly withdrawing rapidly, there are genuinely strong military logics as to why a “hasty” withdrawal would be the correct one. The main reason is arguably to ensure that Russian and separatist intelligence was not able to pick up on such a withdrawal.

As has been outlined on numerous occasions, not only do the separatists, with Russian help, have a relatively clear intelligence picture in Ukraine. The high quality of Russian SIGINT is engendered by Russian dominance in electronic warfare capabilities, with Ukrainian secure communications regularly jammed.[5] As a result of this, many Ukrainian units, especially in the National Guard are forced to use insecure communications such as mobile phones. These, being insecure, are then regularly tracked and monitored by the Russian forces including the FSB and SVR.[6] In addition to their sophisticated ELINT, the separatist forces also gather significant human intelligence (HUMINT) from within the Ukrainian military.[7]

Operational security then, is likely to be responsible for the haste of the withdrawal – with inefficiencies within the Ukrainian military itself likely contributing to the reports of tanks and ammunition being abandoned.[8] These inefficiencies are likely to be logistical in nature. Fuel, or the lack of main gun ammunition, would likely be a reason for abandoning tanks given the logistical issues and heavy fighting.[9] With the Ukrainian defense industry capable of refurbishing many more, tank and vehicle losses are arguably not as important as retaining a trained cadre of troops.[10]

The third understanding for why the retreat from the Debaltseve pocket was a defeat is simply a general lack of understanding on behalf of the correspondents. Take, for example, Channel 4’s Alex Thompson, who stated: “Across the day, hundreds of Ukrainian troops have been leaving town, telling stories that speak of just one word: Defeat.”[11] The soldier’s stories that he edits into the broadcast are therefore particularly important. He stated (translated into English):

It was very heavy. We couldn’t even go to take food or water.  Yes, we were urinating in a can all the time we were sitting in a bunker; very very heavy shelling. We were praying all the time and said goodbye to our lives a hundred times; they had really good and heavy artillery.[12]

While this description of “defeat” is harrowing, it clearly differs very little from accounts of successful sieges. For instance, in describing the siege of Khe Sanh, Marine Cpl. Steve Wiese stated: “We knew we were going to be overrun and the whole world was going to end — but that happened every night(my italics). People were wounded and killed every night.”[13]

Khe Sanh, it should be noted, was a siege where the Marine defenders were outnumbered at more than 3:1.[14] It was also a siege in which, while harrowing, Marines killed at least 8 times the number of NVA as they lost themselves. Even while absolutely pummeling their opponents, Marines faced great dangers and tackled monstrous fears while fighting them. Strong opponents and tough fighting are not stories that speak clearly of defeat, however, they are merely stories that speak to the ferocity of war itself.

It should also be noted that this account backs up the majority of the positive accounts of the performance of Ukrainian troops in Debaltseve. The separatists have largely sought to discredit accounts of this performance of Ukrainian troops, primarily by continually iterating that large numbers of Ukrainian troops are surrendering.[15] While these allegations may be politically convenient to spread over the Internet, they do not accord with the reality, which is that separatist forces were continually beaten back by Ukrainian forces. Were the pro-Russian accounts true, the separatists would have completely encircled the Ukrainian forces in late January.[16]

ORBATs

Having examined the first three points we will now examine the parallel to these justifications of why Debaltseve was a defeat: determining the strengths of Ukrainian forces that were in Debaltseve, and also determining the casualties they took.

Understanding the casualties either side suffered is so difficult due to the lack of reliable statistics produced by either side. In the highly propagandized environment, careful examination of the statistics of both sides is necessary, beginning with those of the separatists.

Pro-Russian narrative

Going by the claims of separatist forces, particularly, the deputy chief of the DPR defense ministry, Eduard Basurin, some 3,048 Ukrainian soldiers were killed by the separatist forces.[17] That figure is, as will be demonstrated, extremely high, as will be demonstrated. Pro-Russian estimates of the number of Ukrainian soldiers present in the pocket tended to be in the range of 8,000 to 9,000 soldiers.[18]However, using fairly standard wounded:killed ratios, this figure of 3,000 killed seems fairly nonsense, as it would indicate that the entire Ukrainian force of 9,000 soldiers had been incapacitated through casualties.[19]

If we examine battles roughly comparable to Debaltseve, such as the siege of Khe Sanh during the Vietnam War, the wounded : killed ratio for the U.S. forces was 8:1. Using this ratio, for the 3,000 Ukrainian deaths, 24,000 casualties, and a total of 27,000 troops, would be present. Even taking from other more “compliant” examples, such as the 2013 Battle of Bangui, it seems apparent that the minimum wounded: killed ratio in modern combat is 2:1.[20] As stated would mean that 3,000 combat deaths would mean 6,000 Ukrainian casualties – and a completely wiped out Ukrainian force. If this was actually the case, one would expect to see separatist tanks ploughing into Artemivsk right now; the fact that this is not happening demonstrates that the separatist statistics are ludicrous.[21] They also quite clearly play into the propaganda narratives of the pro-Russian governments, which are designed to make Ukraine look weak, fascist and cruel.[22]

Ukrainian narrative

Going by the claims of the Ukrainian government after the operation losses totalled 13 soldiers killed, 157 wounded with 172 captured and missing.[23] Pro-Ukrainian estimates of Ukrainian troops that were present in the salient ranged from anywhere from 2,000 to 5,000 troops.[24] The official Ukrainian figure, delivered on 18 February, indicates that roughly 3,400 troops were present in the salient, given that upon the announcement of the withdrawal, “80%” of the troops were listed as comprising of 2,475 troops and 200 vehicles.[25] That would indicate that there were roughly 3,000 troops remaining after the casualties had been accounted for.[26]

However, while this is presumably a figure backed up by more paperwork than the separatist account,[27]  a rigorous assessment will still be necessary to arrive at something approximating the truth.  In particular, it will be necessary to compare the official figures with the intensity of the fighting and the performance of the Ukrainian forces.

Taking that casualty estimate as a starting point, however, the total listed losses by Poroshenko amount to 448 losses from January 18 – February 18.[28] Given the stated size of the force in the salient, that indicates a 13.2% loss rate. Being suspicious of these figures (justifiably, given the Ukrainian issues with C3, and the example set by Iloviask), it is likely that the loss rate will be higher than this. How much higher though has to be estimated through an understanding of the dynamics and history of the battle itself.

The Debaltseve “cauldron”, “kettle” or “pocket” had been reportedly singled out for assault by the separatist forces as early as 7 November 2014.[29] However, by pretty much all accounts, separatist attacks, when mounted, had been firmly repulsed with heavy losses in their attacks throughout December and January, with regular shelling of Ukrainian positions the predominant means of attrition.[30] In the last week of January, however, the situation on the ground began to change. On 24 January, 2015 after Alexander Zakharchenko, the leader of the Donetsk People’s Republic stated that his forces would cut off and encircle Ukrainian forces in Debaltseve.[31]

From that point onward, the separatist attacks were stepped up in intensity. And yet, even though separatist attacks steadily grew in intensity and frequency, their progress was hard-pressed. On 31 January, they reportedly captured Vuhlehirs’k, a significant turning point, as it allowed them to more easily bleed Ukrainian supply lines by shelling the main E40 /M03 road to Debaltseve itself.[32] However, rebel attacks against the belt of towns sitting astride the road the Ukrainian forces – Svitlodarsk, Luhanske, Myronivsky, and Krasni Pakhar, were repeatedly repulsed by Ukrainian armored counterattacks.[33] This belt now forms the frontline of the Ukrainian forces in the region.

Given Ukrainian C3 difficulties, the CONOPS they appeared to adopt – a system of outposts and checkpoints that served as trip-wires for the armored “fire-brigade” worked remarkably well, though this meant that checkpoints often traded hands between Ukrainians and the rebels. Importantly, at no point could it be confirmed that large numbers of Ukrainian troops were lost to single enemy actions. That being said, in the aftermath of the capture of Debaltseve, approximately 100 Ukrainian captured servicemen were displayed by the separatists, though it does not appear that these prisoners necessarily surrendered en masse. [34] Due to its trumpeting by separatist forces it is likely the most substantial single loss suffered in the Debaltseve salient.

Given this reading of the battle how are we to modify the loss rate given the reluctance or incapability of the Ukrainian side to fully disclose accurate figures or estimates? The 13% loss rate seems low based on the relatively high tempo of Ukrainian operations, outlined above, the numerical superiority of the opposition,[35]  length of time of actual operations,[36] and the Ukrainian penchant for deflating the numbers of killed and wounded, demonstrated most dramatically in the debacle at Iloviask.[37]

The rate is likely to be higher than that, though not much higher – as the haste of the withdrawal and the ineffectiveness of the enemy’s artillery in producing casualties against prepared Ukrainian positions would indicate. A fair estimate for a loss rate would likely be roughly 20% of the available units, or roughly 1.5 times the stated number. This higher rate takes into account the additional 100 Ukrainians captured, losses incurred before the arbitrary 18 January starting point, and the “fudge factor” which the current figures are likely incorporating, to contribute to the reputations and careers of officers in the Ukrainian military. [38]As a result of this rate, the numbers of losses would range from 700 to 1,000 men lost, depending on the size of the force that was in fact deployed.[39]

Defeat or draw?

With that estimate of losses in mind, can the Battle of Debaltseve be regarded as a crushing defeat for Ukrainian arms? I would suggest not but due to the retreat and likely significant casualties, it is clearly not a victory for the Ukrainians. Rather than being seen as a defeat though, it would make sense to see the battle for Debaltseve, at least tactically, as a draw. The Ukrainians extracted the majority of their force out against a stronger force that had it surrounded on three sides; the forces in the pocket generally fought hard and well against the separatist forces, in all but the most die-hard separatist accounts, and did so with significant logistical shortages and little to no air support.

Why the loss of Debaltseve is so troubling is not because of what actually happened on the battlefield, but what the relentlessness of the separatists, and Russian forces on the ground indicates. With Russian forces and support on the ground, Ukraine will find it hard-pressed to launch offensives strong enough to sweep back the separatists as they were able to do last summer before the disaster at Iloviask. While the Ukrainians acquitted themselves well in these defensive battles for Debaltseve, matching even the Russian forces at times, they needed a battlefield victory to garner support for their domestic and international political agenda. The retreat showed them incapable of doing this. In this environment, efforts at peace and ceasefire do make sense – but as Putin, Zakharchenko and Plotnizky have ruthlessly demonstrated in Debaltseve, both sides have to voluntarily submit to peace efforts. The lesson of Debaltseve, then, is that in spite of the valiant efforts of the Ukrainian forces, and European diplomats peace will take hold only once both forces have been literally stopped in their tracks.

[1] http://www.theguardian.com/world/2015/feb/18/ukrainian-soldiers-share-horrors-of-debaltseve-battle-after-stinging-defeat

[2] http://www.kentucky.com/2015/02/17/3698726/ukraine-army-rebels-miss-deadline.html

[3] http://www.unian.info/war/1046294-western-journalists-cast-doubt-on-general-staffs-debaltseve-pull-out-casualties-reports.html, http://www.jamestown.org/programs/edm/single/?tx_ttnews%5Btt_news%5D=43549&cHash=abfe364b97c12ad22bcb169643907066#.VO1LYPnF98E

[4] This last point is a plain reason why this accusation should necessarily be viewed with suspicion, especially as the proposal for a separate command and intelligence apparatus was rejected out of hand by many of the volunteer battalions. https://www.youtube.com/watch?v=TN5umzhOj9E, http://www.bbc.com/news/world-europe-31552773, http://news.bigmir.net/ukraine/877051-Semenchenko-i-Jarosh-sozdali-genshtab-dobrovol-cheskih-batal-onov

[5] http://news.yahoo.com/ukrainian-forces-face-drones-electronic-jamming-us-232953561.html

[6] http://foreignpolicy.com/2015/02/04/crowdfunding-the-war-in-ukraine-from-manhattan/ v

[7] http://www.newrepublic.com/article/117710/ukraines-army-small-sovietized-underfunded-and-poorly-trained

[8] http://www.unian.info/war/1046294-western-journalists-cast-doubt-on-general-staffs-debaltseve-pull-out-casualties-reports.html

https://empr.media/opinion/analytics/ukrainian-organized-withdrawal-from-debaltsevo-is-questionable – National Guard SF unit received a 10-minute warning for their withdrawal.

[9] https://www.youtube.com/watch?v=as42werbqlk

[10] http://ukraine.setimes.com/en_GB/articles/uwi/features/2015/02/19/feature-01, http://ukraine.setimes.com/en_GB/articles/uwi/features/2014/11/05/feature-01, http://www.dailymail.co.uk/news/article-2572149/Stunning-images-huge-abandoned-tank-graveyard-Ukraine-machines-come-retirement-tensions-Russia-continue-escalate.html

[11] https://www.youtube.com/watch?v=3Z1zS-6i3Ig

[12] https://www.youtube.com/watch?v=3Z1zS-6i3Ig

[13] http://www.stripes.com/news/special-reports/vietnam-at-50/the-bloody-battle-of-khe-sanh-77-days-under-siege-1.314627, http://www.legion.org/magazine/216976/siege-khe-sanh

[14]http://www.marines.mil/Portals/59/Publications/The%20Battle%20for%20KHE%20SANH%20PCN%2019000411000_1.pdf

[15] http://www.zerohedge.com/news/2015-02-18/hundreds-ukraine-troops-surrender-besieged-town-debaltseve-falls-rebels

[16] https://twitter.com/_darkhours/status/559296247451099136, http://americasdonewrongs.blogspot.com/2015/01/popasnaya-taken-boiler-in-debaltseve.html and many more.

[17] http://www.dailymail.co.uk/news/article-2959891/Russian-separatists-claim-killed-3-000-Ukrainian-troops-battles-key-rail-hub-Kiev-says-90-forces-evacuated-siege-town.html

[18] http://www.washingtonsblog.com/2015/02/debaltseve-encirclement-complete-9000-ukrainian-soldiers-trapped-mercy-offered.html, http://sputniknews.com/europe/20150214/1018270783.html

[19] Soldiers have to be alive to retreat in great numbers as pro-Russian propaganda suggest.

[20] http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=35937:still-no-answers-on-the-battle-for-bangui&catid=111:sa-defence&Itemid=242 http://www.iol.co.za/news/politics/heroes-of-bangui-honoured-1.1749340#.VO1u0_nF98E

[21] In particular both battles were characterized by a heavy use of artillery, resupply and medevac issues faced as a result, and the significant outnumbering of the defenders. Granted, resupply and medevac at Khe Sanh could be carried out via air, but the runway was continually shelled by NVA limiting its operational availability. Similar parallels can be drawn with the E40/M03 road, continually shelled by separatist forces which limited ammunition resupply and medevac efforts. http://www.stripes.com/news/special-reports/vietnam-at-50/the-bloody-battle-of-khe-sanh-77-days-under-siege-1.314627  Afghanistan, a more modern conflict is even more pronounced with respect to its wounded:killed ratio, displayed here at 10:1 http://www.defense.gov/news/casualty.pdf

[22] See here: http://rt.com/news/230363-ukraine-real-losses-german-intelligence/, http://rt.com/news/227071-ukraine-troops-hide-losses/. Ukraine is not immune to this propagandistic streak, by the way: both sides have alleged the use of barrier troops (i.e., troops deliberately positioned to fire upon retreaters) to draw parallels with Stalin’s brutal way of making war and to discredit the other side: Ukraine’s propaganda, however, is less vocal and less powerful, because it does not have the broadcasting power that Putin’s organization does, especially in RT.  http://euromaidanpress.com/2015/02/03/russian-barrier-troops-used-during-assault-on-vuhlehirsk-ato/, http://rt.com/news/226831-ukraine-barrier-troops-donetsk/

[23] http://www.timesargus.com/article/20150220/NEWS04/702209956

[24] http://conflictreport.info/2015/02/09/the-worst-case-the-pocket-of-debaltseve-closes-trapping-thousands-of-ukrainian-troops/

[25] http://www.president.gov.ua/en/news/32302.html, http://blogs.reuters.com/great-debate/2015/02/19/debaltseve-debacle-put-ukraines-leader-in-jeopardy-and-that-suits-vladimir-putin-just-fine/

[26] Perhaps, however, there were 2,900 as Poroshenko did say that 100 troops were injured during the retreat: http://russia-insider.com/ru/ukraine/2015/02/19/3637

[27] And one with a greater potential for accuracy, given that attackers leave their casualties on enemy-defended territory, not the other way around.

[28] http://www.pravda.com.ua/news/2015/02/20/7059287/

[29] http://www.ukrinform.ua/eng/news/terrorists_announce_plans_to_surround_debaltseve_327047

[30] https://www.kyivpost.com/content/kyiv-post-plus/soldiers-return-from-gates-of-hell-south-of-debaltseve-373723.html

[31] https://en.informnapalm.org/zakharchenko-declared-attack-mariupol-debaltseve/

[32] http://en.interfax.com.ua/news/general/247823.html, http://conflictreport.info/2015/01/30/the-beginning-of-the-end-russian-forces-storm-vuhlehirsk/

[33] Additionally, Lohvynove was a town repeatedly contested over (now ceded to rebel control) where Ukrainian forces repeatedly beat back the separatists: http://news.yahoo.com/photos/russia-backed-separatists-drive-tank-near-village-lohvynove-photo-181433164.html en.censorf.net.ua/news/324385/ukrainian_soldiers_took_lohvynove_by_assault_artemivskdebaltseve_motorway_unblocked_mp_semenchenko, http://www.conflict-news.com/fall-debaltseve/

Svitlodarsk: http://reliefweb.int/report/ukraine/ukrainians-flee-frontline-town-under-daily-crossfire

Kransnyi Pakhar: https://twitter.com/gbazov/status/560956348326612993, https://twitter.com/svarun_01/status/568352392183476224

Luhanske: https://twitter.com/Conflict_Report/status/570151160851668992 , http://www.wsj.com/articles/ukrainian-soldiers-describe-difficult-retreat-from-debaltseve-1424281353 , http://uacrisis.org/andrijj-lisenko-28/

Myronivsky: http://www.kyivpost.com/content/kyiv-post-plus/no-cease-fire-in-donetsk-oblasts-myronivsky-as-residents-dodge-constant-shelling-380865.html

[34] Excluding separatist reports, tweets and estimates, which, as we have showed, are very unreliable. https://www.youtube.com/watch?v=dTBGJaRqkU0

[35] http://www.pravda.com.ua/news/2015/02/20/7059287/

[36] http://www.pravda.com.ua/news/2015/02/20/7059287/ – Quoted the

[37] http://www.newsweek.com/2014/11/14/battle-ilovaisk-details-massacre-inside-rebel-held-eastern-ukraine-282003.html http://maidantranslations.com/2014/10/19/yuriy-butusov-ilovaisk-fatal-decisions/

[38] The intra-case comparison with Iloviask is an important one to draw. At that battle, the government claimed 108 soldiers were KIA, but after the investigation conducted by the Ukrainian parliament, that number was revealed to be 241: a factor difference of precisely 2.23. However, by pretty much all accounts, the Ukrainian forces fought much better at Debaltseve. Hence, the Ukrainian military does not necessarily have to fudge the numbers as much – though with propaganda wars almost as important as what goes on on the ground, wariness should be rewarded. http://maidantranslations.com/2014/10/19/yuriy-butusov-ilovaisk-fatal-decisions/

[39] It is arguable that due to the likely better combat performance of a larger force, casualties would occur at a similar rate to that of a smaller force.

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China’s deal with Gazprom – Friends Again?

“After a decade of talks,” in Bloomberg’s words, China and Russia have finally signed the deal for Gazprom’s “Eastern Program” gas, a process of negotiation which began in 2004 when Gazprom and China National Petroleum Corporation(CNPC) signed an initial agreement. However, does this deal really herald the warmest period in Sino-Russian relations since the 1950s? Answering that question will require an echeloned response involving composite questions.

Firstly, what is the content of this gas deal?

The gas deal signed between Russia/Gazprom and China/CNPC is reported to have a total value of $400 billion USD over 30 years (from 2018-2048). The deal stipulates that Gazprom will supply approximately 38 billion cubic metres of natural gas per year over these 30 years. The headline price for the overall value of the contract indicates a price per thousand cubic metres of $350.88 exactly.

The deal also solidifies the levels of investment that Gazprom and CNPC will put into the deal. Gazprom will invest $55 billion into completing the development of the Chayanda and Kovykta gas fields in Eastern Siberia, (See Figure I, Gas production centers 2 & 3) and CNPC will place $20 billion of investment into its own pipeline development.

Figure I: Gazprom’s Eastern Program

map_vostok_eng

Secondly, what matters in the gas deal and what does not?

That is a much better question. The price of the gas supplied is interesting to note: at a smidge over $350 dollars per thousand cubic meter, that price is at the rock-bottom of Russia’s European pricing. While analysts have stated that, yes, technically Gazprom will be able to make money at that price, and Putin himself stated that the pricing would be linked to the price of oil and oil products, it is probably the case that Gazprom’s margins on this project are razor-thin, and that the Chinese governmentand CNPC “drove a hard bargain” in Putin’s words.

Admittedly, if one takes the opinion that Asia’s forecasted appetite for energy, and especially gas, will continue to increase dramatically, simply getting access to the Chinese market can be seen as a boon for Russia and Gazprom, especially given that 38 billion cubic meters of gas is approximately 23% of China’s 2012 gas consumption, itself a quickly growing 4% of China’s overall energy mix.

Thirdly. what can and should we extrapolate from this deal in terms of overall Sino-Russian relations, given the answers to the first two.

So it’ll probably be profitable for Gazprom, but what does the deal really mean with regards to Sino-Russian relations overall? In Zhou Enlai’s opinion, it’s probably too soon to tell. While much of the Western (and indeed English-speaking Russian) commentary has been focused on how much a possible shift this deal represents in terms of Sino-Russian relations, possibly increasing cooperation on a whole breadth of affairs, it might be important to point out a few basic, overriding facts.

1. The Chinese government is not interested in nor approving of current Russian foreign policy.

China’s position with regards to Russia’s actions over the Ukraine is quite strongly not a supportive one. While Chinese media outlets and commentators do not hesitate to also criticize the U.S. for its perceived role in the crisis, the facts remain that the Chinese have been muted on such actions. The reasoning on this is quite simple. Russia’s actions are carried out to ‘protect ethnic Russians in Crimea and the Ukraine’ – overturning global understandings of the boundaries of the Russian state. China’s international priorities are to preserve global understandings of the boundaries of the Chinese state, (with the possible exception of Taiwan, which China needs no international support in its policies for). The two are, currently at least, diametrically opposed.

2. China consumes a huge amount of energy. Russia is the world’s biggest gas producer and exporter.

The deal makes a lot of economic sense; and surely further Chinese cooperation on energy projects can be expected as a result of this deal, especially given their ability to drive such a hard bargain even with Putin there. But where the Chinese do not have outstanding territorial or political disputes with a country, their general approach to business deals is ‘you stay out of my way and I’ll stay out of yours’ – an approach that has arisen time and time again and which directly applies, given that Russia and China have recently (in 2008) signed agreements resolving longstanding territorial disputes. (The Chinese approach differs in East Asia where it has strong territorial interests, however).

It makes a lot of sense for this deal, which keep in mind, has been negotiated for ten years, to reflect quite strongly business priorities and not political ones. Sure, Putin may have tried to time the signing of the contract to “show” to the West his independence, but 38 billion cubic meters of gas covers about 1/5th of Russia’s exports to Europe, which are estimated at  about 170 billion cubic meters per year. Putin will be hard-pressed to turn Gazprom’s attentions away from Europe anytime soon, even if the Eastern Program eventually supplies 60 billion cubic metres of gas as it is predicted to do eventually.

In short, does China’s deal with Gazprom and Putin mean that China and Russia are on the road to a blossoming friendship? While Putin would like to allege so, it seems unlikely given the current trajectory of economics and international politics in the two countries, which demonstrate a real divergence in interests. It is more likely, rather than friendship developing, that the two sides will stay as colleagues.

 

 

http://www.bloomberg.com/news/2014-05-21/tumbling-gas-prices-signal-europe-is-stuck-with-russia.html

http://news.bbc.co.uk/1/hi/7517380.stm

http://www.bloomberg.com/news/2014-05-21/russia-signs-china-gas-deal-after-decade-of-talks.html

http://www.ft.com/cms/s/0/d9a8b800-e09a-11e3-9534-00144feabdc0.html?siteedition=uk#axzz32LpssDco

http://www.eia.gov/countries/country-data.cfm?fips=ch#ng

http://en.ria.ru/russia/20140521/190004220/Russia-China-Ink-Historic-Gas-Supply-Deal.html

http://www.bbc.co.uk/news/business-27503017

http://www.bbc.co.uk/news/world-asia-china-27076190