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Russia's Medvedev seeks deals, assurances in China

BEIJING (Reuters) - New Russian President Dmitry Medvedev arrives in Beijing on Friday, offering energy deals and military cooperation but seeking pledges of solidarity with resurgent China at a time when ties with the West are strained.

Russia's President Dmitry Medvedev (L) visits a missile base in Teikovo in the Ivanovo region, May 15, 2008. REUTERS/Pool

Moscow has been annoyed by what it sees as Western attempts to contain its diplomatic ambitions and keep Russian companies out of lucrative markets. It will be keen to shore up support in China, which it sees as a potential ally against a Western world order.

“Our foreign policy must be reasonable, pragmatic, but also friendly and open. And we certainly count the People’s Republic of China among our most important foreign partners,” Medvedev told Chinese reporters in an interview, a transcript of which was posted on the Kremlin government website on Thursday.

Medvedev is to meet Chinese President Hu Jintao on Friday, with the leaders expected to sign a joint communique outlining common ground in international policy.

“In these documents there will be a lot of answers and elaborations showing the shared position of China and Russia on major international issues including new world order, international stability, new challenges and threats and so on,” Russian ambassador to China Sergey Razov said this week.

“Also on sensitive issues, including Iranian and Korean nuclear issues among others, we have a common position.”

China and Russia have frustrated Western moves to thwart Iran’s atomic ambitions, using their permanent membership on the U.N. Security Council to water down sanctions. Both are involved in multilateral talks to rein in North Korea’s nuclear program.

The two countries have also proposed a treaty to ban weapons in space, in the face of U.S. plans for a missile defense shield in eastern Europe which Moscow suspects will be used to spy on Russia’s missile arsenal.

“I have to reiterate that the decisions that have been taken so far cannot make us happy, and we will be forced to respond appropriately to any decisions that are taken,” Medvedev said.

Moscow and Beijing are also the leaders of the Shanghai Cooperation Organisation, a regional grouping which claims a strong security role in Central Asia and is seen in Moscow as an alternative to Western political domination.

But the new Russian president also has to address concerns at home about China’s growing military and economic clout and its rivalry for influence in resource-rich Central Asia.

Medvedev arrives only a day after visiting neighboring Kazakhstan, a country seen as key to Moscow’s strategy of keeping Central Asia’s gas out of Western hands and a rival supplier for China’s prodigious energy appetite.

Seeing huge potential for developing trade ties with Beijing, which represents a largely untapped market for Russia’s abundant oil and gas, Medvedev is accompanied by a delegation packed with senior energy and investment officials.

Trade between the two rising powers has soared seven-fold over the past decade, from $6.83 billion in 1996 to $48 billion in 2007, largely driven by burgeoning crude oil exports to China.

But Medvedev faces pressure at home to improve the terms of trade, with exports of cheap Chinese electronics and cars flooding Russian markets, fuelling an $8.8 billion trade deficit.

“Our task is not just to increase the amount of trade overall ... it’s also to optimize it,” Medvedev said, touting cooperation in aviation and space technology.

The visit may yield an agreement on nuclear energy cooperation, but preliminary deals to transport Russian gas into China via planned pipelines are unlikely to make further headway, remaining bogged down over long-standing pricing disputes.

Reporting by Ian Ransom; Editing by Nick Macfie and Roger Crabb

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