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Xi Jinping and Vladimir Putin met virtually on Dec. 30, touting the usual and expected bilateral economic and political engagement, cooperation, and development.

But increasingly, one gets the sense that the marriage between Beijing and Moscow is one of convenience and necessity, not friendship. And Xi, the Chinese Communist Party chairman, may slowly be gaining the upper hand.

Each country faces its own issues. Russia is mired in a costly and increasingly unpopular war against Ukraine. It faces international sanctions and a sizable portion of its foreign reserves are frozen. Putin, its longtime president, has become persona non grata on the global stage.

China has more internal problems. We won't detail all of the issues here but they are urgent and span across the economy, the real estate market, rampant COVID infections and hospitalizations, and escalating citizen unrest. Beijing is also believed to have ambitions of annexing Taiwan, and knowing the ramifications currently facing Russia, it must be prepared to face similar consequences including being cut off from global trade.

We've previously discussed China, Russia, and other nations potentially forming their own global reserve currency backed by commodities and/or gold. That would form another global trade hegemony and free China (and others) from having to transact in dollars. This would be helpful in a post-globalist, more regional economic and political paradigm, especially if China joins Russia as a global pariah.

China has also sought to secure its flow of natural resources. In late December, Putin touted that Russia has become China's leading supplier of oil and gas. Almost 14 billion cubic meters of gas were sent from Russia to China during the first 11 months of 2022 between pipeline and liquefied natural gas (LNG). And thanks to the embargo on Russian oil by most of the developed world, Russia has replaced Saudi Arabia as China's top oil supplier, and at a discounted price.

For the most part, Russia lacks pipelines to carry gas from Siberia to China or Europe. Siberia is historically underdeveloped with clusters of towns and cities, poor infrastructure, and inadequate transportation. As of December, the "Power of Siberia" pipeline is now fully operational and can carry gas from Russia all the way to Shanghai, at a maximum 38 billion cubic meters per year capacity by 2027. The Russian portion of the pipeline was completed in 2019. Moscow has plans to build "Power of Siberia II" to supply more gas to China, but it isn't a strategic priority budget-wise given its war in Ukraine....