Russia turns east to embrace looming China

MOSCOW (Reuters) - When Russia opens a "billion-dollar bridge" on its Pacific coast this summer, Vladimir Putin can expect an enthusiastic audience among the 5,000 islanders whom it will connect to the mainland, at an eye-popping cost per head.

But the president will be looking, too, for attention from a few miles further off, in China, whose rise as a trading and diplomatic partner but also as a potential rival for control of thinly populated Siberia's resources has brought a new focus in Moscow on both business and military investment in the far east.

Putin, who meets Chinese leaders in Beijing on Tuesday as he settles back into his role in the Kremlin, has poured money into the Vladivostok area since it was chosen five years ago to host this September's Asia-Pacific APEC summit.

The bridge, which with a central span of 1.l km (1,200 yards) can claim to be the longest of its type in the world, is a sweeping statement of intent. It connects Russia's main Pacific port to Russky Island, where just 20 years ago, as Soviet Communism collapsed, soldiers starved to death for want of rations being dispatched to this remotest of outposts.

Today, though some question the efficacy of bureaucrats pouring taxpayers' roubles into the region, it shows a will in the Kremlin to engage in the east, where Putin must balance the opportunities and risks presented by the rapid growth of China.

"If Peter the Great were alive today he would relocate the capital to Vladivostok not St Petersburg," said Dmitry Trenin of the think-tank Carnegie Moscow Center, referring to the 18th-century tsar's drive to push Russians into the heart of Europe.

"The Pacific is the equivalent of the Baltic Sea in the 18th century. It's where the action is," Trenin said. "But Russia needs to divert far more attention to the Far East than it has been devoting recently ... It will remain a challenge."

TRADE, RIVALRY

Newly re-installed as president after four years as prime minister to his prot?g? Dmitry Medvedev, Putin met EU officials in St Petersburg on Monday before embarking on a state visit to China. He will meet President Hu Jintao and attend a summit of the Shanghai Cooperation Organisation, which also includes former Soviet states in central Asia.

Among the talks between Russia, the world's biggest energy producer, and China, the largest consumer of energy, will be a natural gas deal which Moscow hopes to finalize after years of negotiation. Also on the table is a multi-billion dollar joint venture to build a long-haul aircraft, Russian media have said, and a state-run fund to invest in Russian and Chinese projects.

Russian trade with China has risen at least 40 percent year on year for the last two years and Russian officials say that a target to have $100 billion in bilateral trade by 2015 is likely to be reached ahead of time.

China's widening sphere of economic influence is already being felt on a local level in Russia, especially in areas close to the frontier, far from Moscow, where Chinese-made goods stock the shelves at local grocery stores and Russians make shopping trips to China for clothes and consumer goods.

The worry in Moscow, which forged an imperial dominion over sparsely populated Siberia in the 19th century, is that China's influence is now challenging Russian hegemony in its own lands.

"(Russia has) a neighbor that is becoming more and more powerful economically and its eastern territory is becoming increasingly focused on that powerhouse next door," said Trenin.

"Literally, they are becoming an appendage to China's growing industry."

In an attempt to parry China's growing influence, Moscow has tried to boost its political presence in the region. The new government formed last month has for the first time a Minister for Far East Development.

A state company is also being created with the purpose of exploiting the resources of Russia's Far East. But some analysts say that the bureaucratic, state-led approach to Russian-Chinese relations may indicate lack of a more nuanced plan.

"Putin understands the importance of dealing with China - hence the formation of the new ministry," said Pavel Baev, an analyst at the Peace Research Institute Oslo.

"But he has no clue about how to deal with it."

In an attempt to beef up Russia's presence on its Chinese border, where a territorial dispute killed nearly 60 as recently as 1969, Moscow has reinforced the dwindling local population with migrants from across the former Soviet Union, who are given money and jobs in return for agreeing to settle in the remote areas.

The government program has already transported 400 Russian-speaking families from other countries to the Far East.

Other programs, some of them more colorful than of obvious strategic significance, are aimed at strengthening Russia's borders. The next school year will include the training of the region's first corps of Cossacks, according to local media - a reference to the informal frontier force used by the tsars to repel enemies and whose name has been revived amid a general nostalgia for the imperial past under Putin's 12-year dominance.

SHARED POSITIONS, MUTUAL SUSPICIONS

Both President Hu and Premier Wen Jiabao are expected to step down at the end of this year, but Putin has succeeded in cultivating a relationship with Vice Premier Li Keqiang, Wen's likely successor. The two had a chance to talk earlier this year when Li quietly visited Moscow while the premier was on a much-publicized trip through Europe.

One of the central themes of the talks on Tuesday will be the violence in Syria and the future of President Bashar al-Assad. Russia and China - both permanent members of the U.N. Security Council - have stymied efforts by Western powers to condemn or call for the removal of the Syrian leader in formal resolutions.

The Security Council voting reveals an often repeated pattern in which China follows Russia's more vocal lead on issues from Syria to Iran, allowing Russia to take the lead shielding China from international scrutiny.

"China and Russia have an informal agreement over how to vote in UN security council. China basically follows the Russian vote when it comes to issues where china is not vitally interested," said Fyodor Lukyanov, editor of the magazine Russia in Global Affairs.

"But China will expect Russia to take its side when Beijing wants it," he said, especially on issues in East Asia.

Russian officials emphasize that their positions on Syria reflect shared interests in maintaining centers of power outside of Washington and Brussels as well as a policy of non-interventionism, code for limiting Western influence in regions where either of the two countries have interests. Russia and China have voiced opposition to new sanctions against Iran, whose President Mahmoud Ahmadinejad is to meet the leaders in Beijing, over its nuclear program.

Critics see Putin and the Chinese leadership interested mainly in discouraging demands for democracy.

While the two countries agree on a common front to defend common interests globally, their relationship is thornier closer to home.

"Russia can talk about a strategic partnership with China but they will never be actual allies because China is too much of a potential threat to Russia," a Western diplomat said. "Russia cannot avoid being concerned about China."

Suggesting Russia's fears over China, Moscow has been bolstering its military presence in the Far East and around China with plans to move the first of its newest class of submarines to the Pacific Fleet at Vladivostok, a force it hopes to turn around from the long rot that, a couple of decades ago, saw forgotten men dying of malnutrition at Russky Island.

(Additional reporting by Christopher Buckley in Beijing; Editing by Alastair Macdonald)

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