The Russian president, Vladimir Putin, departed Beijing on Friday without the pipeline deal he had sought, despite a lavish state banquet and carefully choreographed displays of unity. The failure to finalise the long-awaited Power of Siberia 2 gas pipeline underscores the growing strains in the Sino-Russian partnership, as China uses its economic leverage to drive a hard bargain.
Sources close to the negotiations confirmed that Xi Jinping’s government refused to commit to the 50 billion cubic metre per year pipeline, which would have redirected Russian gas exports from Europe to Asia. Instead, China demanded a deep discount on the contracted price, arguing that Moscow’s loss of European customers after the Ukraine invasion had weakened its bargaining position.
The outcome is a blow to the Kremlin, which had hoped the visit would cement a strategic alliance and provide a financial lifeline as Western sanctions bite. For months, Russian state media had portrayed the trip as a triumph, with images of Putin and Xi shaking hands in the Great Hall of the People. But behind the scenes, Chinese negotiators remained intransigent, insisting on terms that would leave Russia with minimal profit margins.
“Xi gave Putin the red carpet treatment but his wallet stayed firmly closed,” said Dr. Li Wei, a political economist at the China Institute of International Studies. “China is acting like a monopolist buyer. They know Russia has few alternatives now, so they can dictate terms.”
The failure of the pipeline deal comes at a time when household energy bills in Britain and Europe are beginning to stabilise, partly due to reduced reliance on Russian gas. But for Russia, the loss of the European market has been crippling. The Kremlin had bet on China as a replacement customer, yet Beijing has used the delay to push for more favourable infrastructure connections and lower prices.
At the industrial heart of the Ural Mountains, the news will be met with dismay. Workers in Russia’s gas fields have seen their wages stagnate as export revenues shrink. “We were told the Chinese deal was ready to go. Now what?” asked Mikhail, a pipeline operator from Novy Urengoy, who asked not to be fully named. “The bosses say we might have to cut production or even lay people off.”
The diplomatic spectacle in Beijing masked a deeper tension. While both nations claim a ‘no limits’ friendship, the economic reality is that China holds the upper hand. Russia’s economy is increasingly subservient to Chinese manufacturing, selling raw materials at discounted rates while buying finished goods at marked-up prices. This asymmetry is now playing out in the hardest bargaining yet.
For British readers, the collapse of the deal offers a moment of perspective. The cost of living crisis at home was exacerbated by energy price shocks. But it also reveals how global power shifts are playing out: China is not rescuing Russia out of solidarity but for profit, and on its own terms. Regional inequality in the UK may feel distant from a pipeline wrangle in Siberia, but the wages of workers in Doncaster or Dundee are linked to these global currents. The price of gas and the health of unionised industries here depend on who wins these energy wars.
The Kremlin, for its part, put on a brave face. A spokesperson insisted that “negotiations are ongoing” and that “mutually beneficial cooperation” will continue. But the body language told a different story. As Putin’s plane lifted off from Beijing Capital International Airport, it carried a leader returning home with a diplomatic smile but empty hands. The question now is whether Russia can afford to wait much longer.
