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Sunday, April 19, 2009

M K Bhadrakumar, "Cash-rich China courts the Caspian," Asia Times online, April 18, 2009.

[As we have long known, The economic crisis isn't just about housing and credit. The decline in oil and gas prices is prompting Russia to turn away from its traditional European market and to commit significant quantities of oil to China. No doubt politics in Ukraine and to a lesser extent in Georgia have played their parts too. -jlt]

The global downturn is spreading to Central Asia. It may lead to a marked shift of fortune in the Great Game for control of Caspian energy reserves. On the surface, the intensity of the rivalries may appear to have subsided, as the principal protagonists - Russia and the West - brood over the precarious state of their own finances and prioritize fixing their domestic economies.

But the slowing down of the Great Game bears a deceptive appearance. China gains out of any changing equations. Of all the major economies of the world, it is in China that the government's 4 trillion yuan (US$585 billion) stimulus package may have begun showing results, which puts the economy in a "better-than-expected" shape, as Premier Wen Jiabao said on Thursday.

  Central Asian producers would now assess that Russia lacks the financial resources to follow through on its commitments in the field of energy cooperation.

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