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China Will Benefit From Cheap Russian Gas—Eventually

The “limitless” friendship between China and Russia notwithstanding, President Xi Jinping of China appears to be at least somewhat miffed at President Vladimir Putin of Russia. For a hint of why that might be, consider the energy sector.

In theory, over the long run, Russia’s isolation from its major oil and gas customers in the West could be a boon for China—particularly with regards to natural gas, since the two nations have already agreed to expand the existing pipeline network between them. But there is a problem: For now, China is a coal- and oil-powered economy, and the transition to moving toward gas will be long and expensive. In the meantime, Mr. Putin’s war in Ukraine has helped push coal and petroleum prices through the roof. All this comes as China’s economy is already struggling with a punishing property downturn and deeply discouraged consumers.