thank you very much. >> that's all of our time for this newshour. thanks for being with us. i am tony harris in new york city "inside story university is next. head on over to our website, aljazeera.com for any of the stories we have covered. aljazeera.com. >> did you see that picture of the chinese leader and the russian leader sharing a toast? the biggest energy user and the big energy producer have a deal and share an appetite for occasionally snarling at the united states. is their deal a big deal? it's the "inside story."

hello. i am ray suarez. after the brack-up of the soviet uni union, the largest republic, russia was in freefall, influence in decline, life expectancy dropping, national self-evide -- self-esteem takin beating. china surged and became an engine of the world economy. china sucked in resources from every corner of the earth and sent out ships piled high with finished consumer goods. in big tower turns, the u.s. still had an open field to run in during the 1990s. nato expanded east into the old warsaw packet. parts of the empire joined the union. china became washington's banker buying a prod i knigious amount american debt but was not in a world power like the world meant it in the days of the cold war. now, it's the u.s. having

trouble working its will in the world, china making new friends and buying new friends in africa and latin america and russia undergirding its economic by selling natural resources for top dollar. >> it took 10 years to cut a deal, but china and russia, two world powers and formerly bitter rivals came together when their energy and political interests merged. they both got what they wanted and needed including the visual message that the u.s. is not alone in dominating the world stage. vladimir putin called it epic. >> this will be the biggest construction in the world without any exaggeration, it is gas production and chemistry, a helio factory. >> the 30-year agreement between russian gas giant gazprom and china's national petroleum corporation is involved at

$400,000,000,000. a pipeline will move gas every year through siberia to china's populous northeast. a second pipeline to the western prove convinces is reportedly in the works. chinese president trumpeted the growing friendship with putin's russia and the power of asia. >> translator: the asian nations are members of the big family of asia, and we should sher issue the opportunities of development which are hard to win. we should go hand-in-hand to consolidate the good developing trend in asia. each country should, while realizing its own growth targets, push forward the unity, cooperation of the whole of asia so asia can realize its own glory as early as possible. >> the question is: why this? why now? for russia, the answer may lie in ukraine. russia's pipeline causeway to

the european market with europe threatening sanctions and thinking about new sources of natural gas, vladimir putin is looking for a new market, and russia needs the money with its economy teetering on the edge of research. what does china get out of this? for one thing, a good bargain locking in a price point what rope pays for russian gas. china's appetite for energy is enormous and growing. in 2000, china consumed half of the energy of the united states. in 2009, china passed the u.s. in consumption and last year became the world's number 1 oil importer. china also burns more coal than all of the countries in the world combined. the deal with russia would represent 15% of china's energy needs and allows china to diversify the sources and in the long-term could help ease the horrible pollution problem from the burning of fossil fuels. what message does the

china/russia energy pack sends to the united states? the state department downplayed it as a routine busy story. >> energy is a global market. and there are negotiations about deals happening all over the world pishly between major consumers and major producers, and that looks like -- it looks like the discussion was about exactly that. >> vladimir putin has been promoting his vision for a new russia that's second to none. it was on display at the winter olympics in sober. after outrage in the west over russian annexation, this deal raises the profile of putin and russia on the world stage. this is the biggest energy deal russia has made since the break-up of the soviet union. china is also unhappy with the united states. while it holds the largest investment in u.s. debt and is america's third largest trading partner behind canada and mexico, china has concerns about the united states' full-throated

military and economic backing of old friends in asia, including scrapan. the u.s. expressed concern over china's aggressive actions in disputed regions of the south china sea. recently, the u.s. made the unprecedented step of indictmenting members of the chinese military for hacking american corporations. . >> the post cold war years have given way to something new: time to redraw the power map of the world. in the united nations, in the south china sea, in venzuela, cuba and sub is aharan africa. foreign policy intellectuals have been talking about a multi-polar years. does that picture that shot around the world of a toasting shi and putin signal that it's here? joining us to discuss the significance of russia and china's gas deal are, from don ver, professor su shun jow,

director for the center for china corporation. david sedny, deputy secretary of defense for east asia from 2007 to 2009 and in moscow, a research fellow at harvard's geo politics of energy project. david, let me start with you. i mean we have a state department spokes woman talking about this as a routine busy deal and the president of china talking about asia realizing its glory. how should we understand this? >> it certainly is a business deal, but it's a business deal with huge strategic implications. we have got a situation here where there is a fund mentioned realignment of the great power structure going on. and this deal is an inflection point in that. it's important for russia, because it gives it a counterweight to the europeans and u.s. sanctions that it's under now. it gives china hope for the

future, that it's energy costs won't continue to balloon. the u.s. is gaining an advantage in shale gas. the chinese easy see that. there is talk of reshoring of manufacturing from china to the u.s. by the time this gas begins to flow in 2018, the united states will probably be the biggest oil and gas producers in the world again. >> will give us a large economic advantage. in addition to all of the points you made in your report, ray, i would add that the chinese are very strategic. they look ahead not onor two years, five or 10 years. and this very good price they are getting from the russians on gas helps cement china's am? growth for years to come. >> is this more than a routine business deal? >> i think this is mainly a commercial deal, but it has high implications. it was scratchily for russia to find a new marketcruelty for ru find a new market.

>> it was enhanced after the crimea crisis. if you think that 82% of russia's extra ref notions depend upon hydro car bons, russia is desperate to find another market. china is a natural answer. so, it is important but it has a strategic value as well. >> professor, is it possible to overthink this? i mean, china needed something. russia has it, and it may be we are making a mistake in overreading this? >> i think it is much bigger than normal business deal. if it was business deal, it would not sign as a high-profile deal. there are a lot of questions about if he would reach the deal. why they reached that deal? both countries feel they have to reach this deal at this strategic moment. >> for russia, as mentioned earlier, they had not a lot of problems. on china's side, in fact, china,

at this time, they need russia on their side because they have so many problems with the united states. the balance to asia pacific, japan, vietnam, philippines under territory y'all disputes in the east china sea and now, the indictment of officers. the chinese president thought the u.s. now is fighting a war with china. china has to find someone on its side. in this context, i see, as someone mentioned, the multi-polar world is coming for sure. in this multi-polar world alignment and alliances are very important. in this relationship which performed in the 1970s and '80

did, the third power is another nation. now, the u.s. is in isolation in this power game. u.s. has to wake up to the reality of the multi-polar world. the u.s. is no longer dominance. u.s. has to find a strategy to deal with this. in fact, i think u.s. has to find a way with both china and russia. if the u.s. work with both powers, they will not work together. it's very strategic. >> do you agree with the professor, david? >> on the importance of it. but i would expand his definition. there are two other powers that are really relevant. the first is europe, which is still feeling its way as to whether it's going to be a real power or just a collection of states. and the final, the other one, is india, with the election of a new -- i predict very strong prime minister. india is growing rapidly economically and will play a beg role in this future multi-polar world. the playing pieces are multiple. the ability of nations to

successfully navigate that knew geo strategic reality is vital. right now, it looks as if mr. putin and president shi are doing a pretty good job. >> we are going to take a short break right now, and when we come back, we will talk about whether china got the better end of the deal because of russia's worries about its western markets. stay with us. this is "inside story."

welcome back to "inside story." i am ray suarez. on this edition we are talking about the natural gas deal between china and russia. china needs the energy, and russia needs a new market. if it's a win for both, what does it mean for post-cold war geo politics and the business of energy. marina, there is some talk that this was not such a great deal for russia, more like a desperation deal because china locked in such a great price for so long. >> yes. some speak about that. they speculate about that. and i think that's right. russia is increasingly desperate to find the new market and probably russia was willing to concede on a lot of issues due to that fact. in fact, putin and his enteroage, for a long time from

russia's perspective, the outside western routes was the faved one. in 2013, russia was willing to concede and accept the eastern route, target the chinese northeast market, the most p populous one. the second would be equity stakes which the chinese would acquire in western siberia and the far east. i think there have been some concessions from russia's side in order to stimulate this deal and make it a propitious moment from the political side but what sund under pins the deal are economics from both sides. >> professor, you heard vladimir talk about a eurasian union, about looking east. when china looks west toward russia, does it see what putin sees? is there a shared vision here? >> i think so. in fact, that reminds me of something during the wall, there

were two alliances. one is continental euro-asia. and some other continue mental powers. the other is marine time asia pacific. in these new power configurations, we see that type of the power come back. china and russia as the largest continental powers come together. many people had a lot of suspicions, myself included. these two strange bedfellows would not come together. in the last few years, more than a few years, it has been amazing to a lot of observers. these two countries have come together economically and militarily. look at the military exercise these two countries conducted a few days. in the last few days. in fact, there was in the water nearby the dispute. china, japanese territory and that means russia has into

bought into the chinese claims and chinese supported russia on many fronts against the united states. so, i really see a stattegic realignment taking place in a global stage on asia pacific. and chinese president talked so much in the last few days that asian affairs should be handled by asians. they are underlying a big merge, the de-americanization. china tried to get asia to be handled by asia. russia, the united states, is a pacific power but is not an asian power in the chinese mind. russia is euro-asia power. china is working with russia to reconfigure raate the power politics. >> david, does this mean that

russia's sort of conceding in certain ways that it's a junior partner? this is a country that's never been able to make, foipsz, consumer goods to satisfy the desiresr instance, consumer goods to satisfy the desir desires of its own people it's become a mine and an oil derrick for china. >> it's possible to over play this as a deal that has determined the future. i think it has the capability to do that, depending upon how it lays out. russia made some pretty serious concessions on the price side. at least that's what people think today based on the price of energy. >> may not be the case in years to come if this shale oil continues to reduce the world cost of energy. it might actually turn out to be a good deal from russia from that standpoint because the chinese, five years from now, may say we are paying too much. i would be cautious about predicting the cost of energy based upon this deal today. clearly this deal was reached after 10 years of tough negotiation because putin felt

under pressure. does that make him a junior partner? i would say no. he consolidated dated his position and are there other areas? georgia, moldova? other places in the former soviet union where additional russian pressure might be able to be applied more effectively because they have the bulwark of this deal? those were all possibilities that could lead to russia being more effective in the future as a result of this deal. >> morina, given what david said and he just said, i don't want to over emphasize this russian weakness. we are talking about a country with a big empty east that's next to the most crowded country in the world. >> yes. >> go ahead. >> that's right. and i have been -- i have been in russia, which is appropriate since yesterday for this interview. the observers i have talked to are emphasizing the fact that russia with this deal hasn't become a an appendage of china.

russia has received a lot in return for signing this deal. for example, development, the development of infrastructure in the far east and in eastern siberia, not only pipeline but, also, railroads. roads are part of this package, which according to the observers here in moscow is the usual package that china uses when it goats abroad in a country and it invests. also, they were very careful to point out that they would not import chinese workers, so the pipeline and the construction projects on the russian side will be done by russian workers. thanks to probably a large chinese moon. >> that's for -- chinese loan. >> that's for sure. as i pointed out in my already research project that i wrote recently we will take a short break right now. when we come back, we will talk about what the future holds for both these countries and what it means for the united states.

this is "inside story." stay with us. means for the united states. o.

>> must it could not? it you see? >> has been for many years. the two cases lined up together all the time. so that's been the case for a long time. the question as to whether that can be changed goes back to the issue of what other countries, what other big powers do. europe has a bigger economy if you take the european union

together. india, again, is emerging. the united states and the other countries will have to play skillfully, militarily to balance the new factors in the world. >> david sedeny, sui jao, morena, thank you for being with me. >> bring did us to the end of this edition of "inside story." thanks for being with us. i am ray suarez. >> promising a united nation, new fighting in donetsk. we are live with the latest and on memorial day, honoring the men and women who made the

ultimate sacrifice. >> and more coming up tonight at 6:00. >> the mountains of west virginia have provided generations with jobs in coal. but on january 9th, 2014, the state woke up to an example of the costs of it's industrial economy. a tank containing a chemical used the process of coal production had leaked its contents into the elk river, just a mile upstream from the largest water treatment plant in west virginia. >> water is scarce following a warning from west virginia's governor, do not drink, bathe, cook or wash clothes using tap water.., >>...chemical ak