Russia-China relations sinking?

Just days after signing a huge oil and finance deal, relations between Russia and China have hit a major snag over Russia's alleged sinking of a Chinese merchant ship last weekend that may have killed seven Chinese sailors.

The story surrounds the New Star, a Chinese-owned cargo ship that arrived in the Russian Far East port of Nakhoda with a cargo of rice last month. But once it arrived the Russian company buying the rice refused to take delivery saying the rice was poor quality and largely spoiled. The company, in turn, demanded that the New Star pay a fine for failing to deliver the agreed cargo. Russian authorities were preventing the New Star from leaving Nakhoda until the matter was resolved. Finally last weekend, the New Star's captain apparently had enough of the delays and left port without authorization; this prompted the Russian Navy to chase the New Star. When the Chinese ship refused to return to Nakhoda, the Russians opened fire - some accounts say the Russian ship fired 500 rounds of 30mm ammo at the Chinese vessel.

What happened next isn't clear. The Chinese are implying that the Russians actually sank the New Star, the Russians are saying that the New Star was trying to return to Nakhoda as ordered, but by that point a fierce storm had blown in and the New Star sank in heavy seas (the Northern Pacific is notorious for bad weather, especially in winter). The Russians are blaming the captain of the New Star for the loss of his ship because he left port without authorization and because he sailed into a storm; the Chinese are up in arms over that explanation and have expressed their “strong dissatisfaction” with the incident. The Chinese are also angry that the Russians failed to rescue half of the New Star's crew of 16. The Russians replied that one of the ship’s two life rafts capsized before they could reach it, throwing the sailors into the turbulent seas. Given the frigid temperatures of the Northern Pacific in winter, the sailors could not have survived for long in the water.

China has summoned Russia's ambassador and are pushing for a full investigation to the incident, along with making their public statement of “strong dissatisfaction”, which in diplomatic-speak translates into they're really pissed off.

All of this comes just about a week after Russia and China signed a $25 billion deal for oil - China will invest in developing Russian oil fields and building pipelines between Siberia and China, in return Russia's agreeing to provide China with 300,000 barrels of oil per day for the next 20 years.