Tuesday, February 01, 2005

Pragmatism at an extreme

Quote of the day:
"They [the Chinese] understand property rights in Russia are not the most important rights, and they are more interested in guaranteeing supplies."
A Russian analyst quoted in a BBC story on the role of China in the sale of a unit of Yukos. China (Chinese state-owned banks, actually) provided the financing for little known Rosneft to purchase the Yukos unit. In return, China has been assured of a steady flow of oil. In short, China has pre-paid for $6 billion worth of oil, and in return for the privilege has helped the cronies of Putin to take control of the assets of a political rival.

This transaction speaks volumes about the reality of politics and the importance of democracy and property rights in China and Russia.

Putin has made it clear that property rights and the respect of institutions are secondary to keeping a strong grip on power, and the Chinese not only understand this, but seem to be fine with it as long as they get what they need.



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