Oil and territory in Putin's relations with China and Japan

Russia's President Vladimir Putin has centralized decision making in Moscow and has reduced the role of domestic actors. He has demonstrated his own personal management of foreign policy in relation to China and Japan. He has used negotiations over oil and territory to place Russia in a more favourable position between them. In relation to oil, he has overruled the oil company Yukos and others within his own government and decided in favour of the Japanese pipeline route, which includes a branch line to China. Putin decided on the Japanese route because it promised access to wider markets in the Asia Pacific, besides China. It also entailed deeper Japanese involvement in Russia's development and reduced Russian dependence upon China. In terms of territory, Putin undermined the power of local opposition and offered territorial settlements to both China and Japan, to remove sources of future tension. With China he compromised over the river islands which had been left outstanding since the main border agreement was signed in 1991. To Japan he again offered a compromise over the disputed islands based on the 1956 agreement to improve relations. Russians may hope that energy dependence would induce the Japanese to become more willing to compromise over the territorial issue. The Japanese, however, expect that Russia's need for funding for the pipeline would allow them to resist that pressure and to demand a return of all disputed islands. If Russia emerges as an energy supplier to both China and Japan its influence and its regional role would be enhanced. Much depends upon the prospects for the oil pipeline and its branch line, whose feasibility has been questioned.