Xi Jinping and Putin oversaw the launch of Power of Siberia pipeline on Monday this week (Dec 2), which solidifies the geo-economically and geostrategically close ties between China and Russia. The EJInsight article [Putin and Xi open gas pipeline from Siberia to northeast China] unpacks the story of this pipeline, that will transport gas from Eastern Siberia to Northeast China. The launch of this pipeline ‘reflects Moscow’s attempts to pivot to the East to try to mitigate pain from Western financial sanctions imposed over its 2014 annexation of Ukraine’s Crimea’ and ‘cements China’s spot as Russia’s top export market and gives Russia a potentially enormous new market outside Europe.’ The project is supposed to last for three decades and generate US$400 for Russian state coffers. This is happening in the middle of Russian attempts to finalize two other major pipelines, the Nord Steam 2 undersea Baltic gas pipeline to Germany and the TurkStream pipeline to Turkey and southern Europe.
In other news, Austrian economists at the Vienna Institute for International Economic Studies [WIIW] are proposing an ambitious infrastructure project, or a European Silk Road, so to speak. Berlin Policy Journal article [The One Trillion Euro Idea] reports on this unorthodox and ambitious idea, which is estimated to cost 1 trillion Euros, and what's more, is not supposed to rely on European taxpayers. The plan ‘proposes building some 11,000 kilometres of new high-speed rail links and efficient motorways’ that would bypass local traffic. The four main aims of this proposed project are to ‘modernize the infrastructure, increase trade, give the European Union a common project, and […] compete with China’s (BRI)’. The financing could potentially come from setting up ‘a public limited company that could issue bonds to pay for the works’, the model being based on ASFiNAG, a company set up by Austria to finance highways. In parallel, a European Sovereign Wealth Fund would be set up to guarantee those bonds.
M. Forough
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