POLICY makers and industry leaders have been closely monitoring the potential for expanding strategic energy ties between China and its producer neighbour, Russia. Many worry that Russia, if it moves quickly and is flexible enough on price, could cement a deeper energy trade relationship with China on a scale that has grave strategic conse-. quences. They cite similarities with the gas trade between Russia and Europe, which has often curbed European criticism of and action toward Moscow. But Beijing is unlikely to let the Kremlin get one over. A paper China's energy hedging strategy: less than meets the eye for Russian Gas Pipelines from the US-based National Bureau of Asian Research. (NBR) suggests China's growing energy relationship with Russia might best be understood as a hedging strategy to lock in multiple suppliers to cut Chinese exposure to supply disruptions and to leverage cheaper energy imports.
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