Having forged some pretty sturdy commercial ties with Africa and Latin America, China is now entering Eastern Europe. Long-time backyard of Russia, and some-time cold war battlegrounds in bygone days, many have become scourges of Europe in recent years.
Enters China with tons of cash.
China last July signed a memorandum of understanding to lend Moldova $1 billion – equal to a tenth of the east European country’s gross domestic product, and easily the biggest loan it will have received from anywhere.
Last June, it agreed to invest more than $1 billion to build power plants and roads in Tajikistan, an impoverished ex-Soviet state with limited natural resources. In March, China’s central bank agreed a three-year currency swap worth 20 billion yuan ($2.93 billion) with another former Soviet republic, Belarus.
And why would China want to throw its money into those economic basket cases? Political capital with its main energy provider, Russia.
China will increasingly need leverage with Russia as its dealings with its oil- and gas-rich neighbor expand. Russia provides nearly 8 percent of China’s total crude oil imports, and Gazprom is in advanced talks on a deal to supply gas.