In 2004, the Russian Foreign Ministry blocked the sale of the Su-35 and Tupolev Tu-22M bombers to China due to concerns about Chinese production agreements for Sukhoi Su-27SK (known as Shenyang J-11).  Initially, the licensing agreement required that engines and avionics be purchased from Russian suppliers, but until 2004, these components were manufactured domestically.  The growing economic proximity also seemed to indicate a growing political alliance. In an interview with China Central TV on the day of Hu`s arrival in Russia, Medvedev cited high-level exchanges and other bilateral successes in what the two governments call their “strategic partnership” as evidence of what he called “the highest level of relations in the history of Russian-Chinese relations.”  A joint statement by the two heads of state addressed how the two governments generally promise mutual support for their sovereignty and territorial integrity. The Russian government expressly reaffirmed that Tibet and Taiwan are “inalienable parts of Chinese territory,” while the Chinese support “Russia`s efforts to maintain peace and stability in the Caucasus region.”  During Hu`s visit, however, Gazprom announced that due to price disputes, it would not be able to start delivering natural gas to China in 2011 as planned. Construction of the West Altai gas pipeline, which could supply more than 30 billion cubic meters of natural gas per year to China, was scheduled to begin in 2008. A senior Gazprom official said: “As soon as there is a price, we will start construction, but it`s a complicated matter.”  In order to facilitate financial transactions in the regions, China and Russia will conclude a monetary agreement. Central banks with which China has signed monetary sweatshirts can lend in yuan to their banks. A 150 billion yuan ($25 billion) currency swap agreement was signed with Russia. Currency swewings will make the ruble and yuan more stable, which in turn will have a positive impact on the stability of the global financial system. In addition, the expansion of currency exchanges can facilitate investment processes.
By investing in an economy that is now facing some problems due to the fall in the ruble and oil prices, China is making a soft expansion and supporting one of its main partners. China and Russia have long supported reducing the dollar`s role in international trade and both aim to create conditions conducive to the development of bilateral trade and mutual investment. . . .