BEIJING, March 22 2006-Russian President Vladimir Putin called on China Wednesday to broaden bilateral trade, saying an excessive focus by Beijing on securing Russia's abundant natural resources could trigger "instabilities".
"Despite significant advances in Russian-Chinese links, it must be recognized openly that we still have here more than a few serious problems," Putin said in a speech to a business forum with Chinese President Hu Jintao sitting alongside him on stage.
"Chief among them are unfavourable structural changes in Russian-Chinese trade and the 'raw materials' character of Russian exports to China."
Despite booming sales of Russian oil, gas and other natural resources to China, Russian exports of machinery and equipment plunged last year to around half of 2004 levels, he said.
This was against the background of "marked growth" in Chinese exports to Russia of the same products.
Russian-Chinese economic relations were too dependant on fluctuations in raw materials prices, Putin said in the speech, which inaugurated the new Sino-Russian Industrial and Commercial Forum grouping the two country's top business leaders.
"This presents the danger of instabilities in bilateral trade," Putin said, arguing that more trade in technology and industrial goods was required to offset these risks.
Russia, the world's second largest exporter of oil and by far the largest provider of natural gas, is already rapidly accumulating wealth through global sales of these and other natural resources amid high commodity prices.
But with China's fast-expanding economy anxious to lock in new sources of energy and raw materials to keep the momentum going, Putin's comments reflected a Kremlin strategy to link development of its coveted natural resources to investment in other sectors of its economy.
Putin tantalizingly raised the prospect for Beijing of building a much-anticipated branch of a planned oil pipeline between western Siberia and the Pacific coast into China.
"If this project were to be implemented, which I do not doubt, it would bring about a significant increase in the volume of oil shipments from Russia to China," Putin said.
But hopes among Chinese officials -- increasingly frustrated by Moscow's perceived prevarication on the project -- that Putin would use his two-day visit here to announce a timeframe and other firm details for the pipeline were dashed.
President Hu said in his address to the forum that China was prepared to diversify trade, but again stressed the importance of energy to the bilateral relationship.
"Russia is becoming our increasingly important partner for energy supplies, and we should work for closer co-operation between the two countries in this area as it will be beneficial for economic development on both sides," Hu said.
Among the energy agreements signed on Tuesday, the Russian state oil firm Rosneft inked a deal with the China National Petroleum Corp to create two joint oil ventures this year.
"The joint venture in Russia will be for licensing, exploration and extraction," Rosneft chief Sergei Bogdanchikov told AFP.
"The one in China will take care of refining and sales of petroleum products. The joint ventures are to be established by the end of this year."
An agreement was also signed to pursue an ambitious project for construction of two separate pipelines for shipment of natural gas to China with a combined capacity of up to 80 billion cubic meters (2.8 trillion cubic feet) of gas annually.
Putin departed Beijing on Wednesday afternoon for the central province of Henan, where he was due to become the first sitting world leader to visit the famous Shaolin Temple known to most Westerners as the home of Kung-Fu martial arts.
A Kremlin spokesman confirmed that Putin, himself a black belt expert in judo, planned to meet Shi Yongxing, the abbot of the temple that is also known as the birthplace of Zen Buddhism.
Nu, zayats, pogodi!
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