Economic Diplomacy And The Russia-china Gas Deal2014

An important change has been occurred in global and regional natural gasindustry. Natural gas became a useful tool to enhance energy security in China and inRussia. Energy relationship between Russia and China is characterized likestraightforward. China like the “country of consumption” is one of the largest andfast growing market. Russia is the largest producer of hydrocarbons and needs todiversify its export. Strategic energy relations between Russia and China arecommercially reasonable and inevitable. However, the difficulty is the long-standingnegotiations on gas supply from Russia to China. The Sino-Russian30-year,$400billion gas deal was signed between Gazprom and CNPC but it took more than16years to conclude the contract.The aim of the thesis is to find the reason why it took almost16years forRussia and China to conclude the gas deal. The thesis has two plausible reasons toexplain the delay, which are mistrust and price. The Sino-Russian energyrelationships was explained by using the economic diplomacy as the framework.Economic diplomacy explains economic relations between China and Russia regardingexport on gas, decision-making process, how they negotiate internationally and howthese processes interact.The thesis employs methodology of case study analysis. The case of gas dealhas been analyzed in the thesis, the history of negotiations, what happened over anumber of years, how both sides had to deal with difficulties that occur and theirresponse to the problem. Process tracing which helps to trace causal mechanism, thelinks between possible causes and outcomes is used in the thesis. The researcher usessecondary sources to examine the timeline of Sino-Russian energy relationsconcerning gas deal in order to make conclusion and to find out the reasons why ittook a long time for deal. In addition, the researcher applies interviews withemployees/executives from Gazprom and CNPC, industry expert, academics andgovernment official to prove the main argument.