The major news out of China this week has surely been Russian President Vladimir Putin’s two-day visit to Shanghai, which concluded with Wednesday’s agreement whereby Russia will supply China with Siberian gas for 30 years.

The Ukraine crisis has something to do with this, but not everything. Putin’s push for a gas agreement with his Chinese counterpart, Xi Jinping, has been in the works for close to 10 years, and reflects Europe’s move to seek greater energy autonomy from Russia.

But the gas deal was just one of many other economic-cooperation deals signed in Shanghai, and it should not obscure the larger context of what these deals mean for Russia-China relations. Their broader significance is that they confirm the Russian transformation going forward as a raw-materials supplier to a wealthier and more technologically advanced China.

The agreements mean that China will supply Russia with investment capital, industrial equipment and manpower (including skilled engineers as well as unskilled labour), not just for energy resources but in the whole range of metals and mining industries. In return, China will receive assured supply for decades to come.

In the run-up to Putin’s visit, the Russian side (but never the Chinese) proclaimed all issues decided except the price of Siberian gas exports. The agreed-upon price has not been made public. We know that Russia came down to $380 per thousand cubic metres (tcm) and was looking for a compromise around $350, but China hesitated to bid more than $300 to $310. Russia’s state-controlled Gazprom’s break-even point for its East Siberian project has always been $335. Gazprom’s head Alexei Miller said late Wednesday Shanghai time that the deal would be worth $400 billion over 30 years. With a maximum volume of 38 billion cubic metres per year, a back-of-the-envelope calculation yields an approximate price of $350/tcm.

Diplomatic momentum leading to the bilateral gas accord surely relieved Russian obstacles to concluding other agreements with China in Shanghai on industrial and raw-materials cooperation.

But it would be an exaggeration to say that the West is responsible for any “turn to the East” by Russia. Things have been going this direction for the last few years, ever since Putin announced his “Eurasian project” in opposition to the EU’s decades-old project for “constructing Europe.”

Putin’s insistence that Ukraine’s former president Viktor Yanukovych choose Russia’s Eurasian vision over European cooperation is what provoked Maidan, moving the Ukrainian crisis to the front pages. One result, not often mentioned, is that the already sluggish Russian economy threatens now to teeter on the edge of free-fall.

Putin’s turn toward China is not his own doing exclusively. It is cast in the inexorable logic of the system of “Putinism,” which as a system includes all the new oligarchs and their hangers-on, and their individual economic and personal financial interests. They work for Putin, but also Putin works for them.

[First published in the Montreal Gazette.]