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  • Peter Lee on China 2012

    Maybe that war with China isn't so far off
    By Peter Lee

    The year 2011 has been a tough one for Sino-United States ties. And 2012 does not look like it's going to be a good year either, with a presidential election year in the United States. For both the Democratic and Republican parties, bashing the Chinese economic, military and freedom-averse menace will probably be a campaign-trail staple.

    Lunch-pail issues - protectionism and the undervalued yuan - will focus disapproving US eyes.

    Tensions will also be exacerbated by the Barack Obama administration's "return to Asia" - a return to proactive containment of China - and the temptation to apply dangerous and destabilizing new doctrine, preventive diplomacy, to China.

    The potential for friction certainly exists.

    China, as it approaches a leadership transition, wants to avoid friction. However, the United States appears to welcome it and, in the election year, might even incite it.

    The US, under the Obama administration and thanks in large part to Secretary of State Hillary Clinton's team at the State Department, has been quite adept in putting China at a geopolitical disadvantage in Europe, Africa and Asia.

    It is a valid question, however, to ask whether all this diplomatic and military tail-twisting is the best way to advance America's interests - which are meat and potatoes economic concerns, rather than pie-in-the-sky security scenarios, as Clinton made clear in her manifesto, America's Pacific Century:
    Harnessing Asia's growth and dynamism is central to American economic and strategic interests ... broader commitment to elevate economic statecraft as a pillar of American foreign policy. Increasingly, economic progress depends on strong diplomatic ties, and diplomatic progress depends on strong economic ties. And naturally, a focus on promoting American prosperity means a greater focus on trade and economic openness in the Asia-Pacific. [1]
    In any event, the media are happy to stir the geopolitical pot on America's behalf.

    In quick succession in December, the Western press hyped two dubious stories about China's military posture.

    The first, the Karber/Georgetown report aka "Tunnelgate", rehashed old information in the public domain and combined it with wishful thinking disguised as speculation to raise the specter of a previously unknown underground arsenal of Chinese nuclear missiles.

    The second, call it "PLA Navy Gate" was cited by a report that President Hu Jintao had charged the Chinese Central Military Commission to prepare for armed struggle with the United States in China's adjacent waters.

    Or, as the Evening Standard put it: "Prepare for war, Chinese navy is told as Pacific tensions grow." [2]

    M Taylor Fravel of the Massachusetts Institute of Technology called that claim into question with a detailed fisking at The Diplomat, pointing out that Hu's remarks had not been made before the CMC, but in a meeting with Chinese Communist Party (CCP) worthies from the People's Liberation Army Navy (PLAN). [3]

    A quick glance at the original report of Hu's remarks, in the Liberation Army News, reveals the true significance, if any, of the occasion.

    Hu, dressed in a garish military green tunic, is accompanied by heir apparent Xi Jinping as the two civilian supremos engage in a grip and grin with loyal navy cadres, concluding with one of those impressive mass photos meant to demonstrate the continuity of CCP control of the military.

    As to "extend and deepen preparedness for military struggle", it appears to be a Defcon Zero nothingburger; that particular task was listed eighth in the priorities for the navy, behind such strategic imperatives as "be guided by the important ideologies of Deng Xiaoping theory and 'Three Represents'." [4]

    Questions of newsworthiness and accuracy notwithstanding, clearly stories about the China threat attract eyeballs, accumulate links, and feed into the official Western narrative, so we can expect more of them in 2012.

    They will also reverberate inside an echo chamber thanks to the anti-China dynamic of US presidential politics, and the China-containment posture built into America's security doctrine.

    The "return to Asia" is built around a security narrative that relies on framing China as an arrogant, aggressive, and destabilizing presence in the region.

    The Obama administration jumped into the South China Sea issue - an insoluble tangle of disputes between the nations bordering the sea and the People's Republic of China (PRC) - with the argument that the US has a national interest in freedom of the navigation in the South China Sea.

    This posture usually involves an invocation of the critical economic importance of the South China Sea, citing the fact that 25% of the world's crude and half the world's merchant tonnage currently pass through its waters.

    As a look at a map and a passing acquaintance with patterns of maritime traffic reveals, the vital nature of this waterway is something of a canard. It is a big ocean out there. There are big ships out there as well, ships that are too big to pass through the Strait of Malacca that feeds into the South China Sea - they are called "post Malaccamax".

    These ships pass through the deeper and wider Strait of Lombok west of Java.

    The bulk of Australian iron ore shipments destined for Asia already pass through Lombok.

    If Chinese perfidy should shut down the route through the South China Sea, Japanese crude carriers from the Middle East could simply swing south of Sumatra, cross the Lombok Strait, and sail up the east coast of the Philippines. Studies have concluded that the detour would add three days to sailing times and perhaps 13.5% to shipping costs; an annoying inconvenience, perhaps, but also not an energy or economic Armageddon. The bloviating about the vulnerability and critical importance of the South China Sea maritime route can probably be traced to the fact that it is an international waterway and therefore a suitable arena for the United States to flex its "freedom of the seas" muscle.

    Smaller nations bordering the South China Sea welcome the US as a counterweight to China in their sometimes bloody but low level conflicts over fishing and energy development issues.

    Any US attempt to lord it over the Lombok Strait in a similar fashion would presumably not be welcomed by Indonesia, which exercises full, unquestioned sovereignty over the waterway.

    Also, if traffic shifted to the Lombok Strait, the Malacca Strait - that romantic but shallow, narrow, and increasingly problematic passageway to the South China Sea - would be superseded, a rather bad thing for faithful and indefatigable US ally Singapore and its massive port facilities at the east end of the strait.

    All things being equal, the nation with the biggest interest in a peaceful South China Sea looks to be the PRC.

    Heightened tensions in the South China Sea are bad for China, and good for the United States.

    So expect them to persist in 2012, and don't expect to hear about the continued growth in traffic across the Lombok Strait and other strategic Indonesian waterways.

    The United States also rather maliciously fiddled with one of China's important hedge against disruption of its Middle East energy imports through the Malacca Straits and the South China Sea: the Myanmar pipeline.

    Construction of the pipeline began in 2009; when completed, it will transport 12 million tons of crude oil per year - perhaps up to 10% of China's total imports.

    After the Myanmar government ostentatiously pulled the plug on a massive, China-funded hydropower project in the northwest of the country, the US chose to endorse the Myanmar junta's rather risible efforts at democratization with a visit by Secretary of State Hillary Clinton.

    If the Myanmar government mismanages its dance with the sizable and US-supported democratic opposition, the PRC may find itself dealing with a hostile, pro-Western government that will find many reasons to dislike the pipeline.

    A Reuters report in October gave an indication of the importance of the pipeline, and Chinese anxiety:
    China National Petroleum Corp (CNPC) continues work on an oil pipeline through Myanmar and has given aid to show its goodwill, the official Chinese news agency said after Myanmar abruptly halted work on a Chinese-led power dam.

    The Xinhua news agency said construction of the pipeline was "proceeding smoothly" and that CNPC said it gave $1.3 million to Myanmar on Monday to help build eight schools, as part of an agreement signed in April to provide $6 million of aid. [5]
    China, of course, has more to worry about than hypocritical American mischief-making in its backyard.

    It has to come to terms with the fact that its trade-driven foreign policy model has been rather resoundingly repudiated.

    Perhaps biggest wake-up call for China was not downtrodden and put-upon Myanmar opening to the West, or the eternal flirtation between Pyongyang and Washington. As long as the terms of engagement remain civil and economic, contributing to an economic order with Beijing at its center, China can cautiously welcome a flow of investment into the rickety economies of the two authoritarian satellites.

    It was the spectacle of Australia - a key focus of China's economic strategy and site of massive resource investments - welcoming a US military initiative to station 2,500 US troops in the Northern Territories, bending its own restrictions on dealings with non-Nuclear Proliferation Treaty nations to sell uranium to India, and endorsing President Obama's efforts to nurture an anti-China trade bloc, the Trans-Pacific Partnership. China is not an obvious military threat to Australia, and Australia is a natural economic partner for China.

    However, Sydney had no qualms about throwing Beijing under the bus, as it were, in order to take a high-profile role in the anti-China economic and security condominium the Obama administration is constructing in Asia.

    Perhaps the most troubling aspect of the US push into Asia is its effort to cast its economic interests as a matter of national security, thereby providing a new, 21st century pretext for projection of military force into the region.

    In a speech before the New York Economic Club in October 2011, Secretary Clinton declared:
    "The challenges of a changing world and the needs of the American people demand that our foreign policy community - as Steve Jobs put it - think different. We have to position ourselves to lead in a world where security is shaped in boardrooms and on trading floors, as well as on battlefields." [6]
    Thankfully, the Obama administration, unlike the George W Bush administration, has its hands on a variety of diplomatic and economic levers to advance its agenda, not just the military option.

    However, in 2011 the Obama administration appears to have come to terms with its status as the world's only military superpower. It has displayed a willingness to deploy force in a surprising number of venues, especially when drones or proxies eliminated the politically toxic exposure of US service personnel to death and injury.

    Beyond the acknowledged war theaters of Iraq and Afghanistan, the US injected force into Yemen, Somalia, Pakistan, and Uganda through the use of advisers and or drones, as well as supporting a full-scale air war against the regime of Muammar Gaddafi in Libya.

    The Obama administration also showed a Bush-like disregard for the headaches of nation-building, ie the geopolitical consequences of its military adventures. Libya has largely slipped off Western radar screens after the death of Gaddafi, but the country is a train wreck.

    The National Transitional Council is a picture of impotence as competing rebel militia swarm the capital. After one angry demonstration by residents of Benghazi, the TNC cravenly declared Benghazi "the economic capital of Libya" and promised to relocate key government ministries to the eastern city. Rebels from Zintan have leveraged their prolonged custody of Saif Gaddafi into the portfolio of the Ministry of Defense and refuse to withdraw their troops controlling the main airport. In order to dilute the power of Abdulhakim Belhadj, the Qatar-backed head of the Tripoli Military Council, the Libyan government is apparently encouraging him to shift his area of operations to Syria on behalf of the anti-Assad opposition. Despite the bloody precedent of Libya, the Obama administration apparently has few qualms about supporting regime change in Syria, or conducting a covert war to destabilize Iran.

    It makes one wonder if the much-touted "strategic pivot" away from the Middle East, is a matter of changing targets, not tactics, and the Obama administration might be as blithe about beating up China as the Bush administration was about pounding on its Muslim enemies.

    Would the United States regard chaos in China as a must-to-avoid death sentence for the global economy - or an interesting opportunity to put paid to a nettlesome competitor, as long as US boots could be kept "off the ground"?

    In East Asia, the seriousness of US containment strategy could traditionally be measured by the respect Washington showed for the clear red lines of PRC sovereignty claims: Tibet and Taiwan.

    To date, the Obama administration has been quite diligent in its respect for these red lines. It took a considerable amount of domestic political heat over its reluctance to sell F-16 fighter jets to Taiwan and its lack of enthusiasm for the Democratic Progressive Party, the pro-independence antagonist of the Republic of China's ruling Kuomintang (KMT) party.

    Other than the usual public displays of respect for the Dalai Lama and rhetorical condemnation of China's excesses in ethnic Tibetan regions, the administration has not crossed swords with the PRC over Tibet.

    Perhaps, however, with the doctrine of "preventive diplomacy" the US will decide that red lines were made to be crossed.

    One of the most interesting by-products of the Libyan war and the failure of Syrian dissidents to oust the Assad regime was the US announcement of an Obama preemptive doctrine.

    Actually, it's a development of the neo-liberal R2P - "responsibility to protect" - doctrine that declares that a stated need for international humanitarian intervention trumps what the PRC calls "non-interference in internal affairs" also known as national sovereignty. Josh Rogin described the policy in Foreign Policy:
    For the United States, preventive diplomacy means combining all the tools of international leverage - including the use of force - to prevent conflicts from breaking out or preventing hot conflicts from getting out of hand. It also means building sustainable economies and functioning democracies, with the goal of creating societies that can manage disputes on the national and regional levels.

    [US Ambassador to the United Nations Susan Rice] covered a lot of ground in her speech, not explicitly defending armed intervention but arguing for its use in some cases. "We should cease to make false distinctions between peacekeeping and prevention; they are in fact inextricably linked," she said.

    She also argued that the use of sanctions under Chapter VII of the U.N. charter can be a tool of conflict prevention, a position council members such as China and Russian don't support.

    Some other countries used the meeting to explicitly defend the U.N.-sanctioned international military intervention in Libya and called for harsher U.N. measures against the Syrian regime.

    "When conflict looms, the world looks to the U.N. for a decisive response," said British Foreign Minister William Hague. "In Libya ... our swift action prevented a human catastrophe and saved the lives of thousands of civilians." [7]
    From the Chinese perspective, the message is that there is only one thing more dangerous to an authoritarian regime than a successful democratic movement … and that's an unsuccessful democratic movement. If the local dissidents can't cut it, then the US can claim that it is obligated to interfere.

    With generational change threatening to sideline more moderate antagonists in Dharmsala and Taipei and indications that Chinese failings in economic justice and human rights are creating a hard core of domestic opponents, the United States may start to see the PRC's frantic concern in these areas as vulnerabilities that should be exploited.

    The temptations may be strongest in an unusually toxic US election year, as a faltering economy, an angry electorate, and a cynically obstructionist opposition might lead to a wag-the-dog strategy (promoting an overseas adventure to distract attention from domestic political difficulties) to advance President Obama's electoral fortunes.

    There is a danger that China will draw the lesson that the US believes that snubbing China is cost-free: that China is too dependent on global trade and too weak militarily to be taken seriously as an antagonist.

    Perhaps, resentful Chinese leaders will decide that the PRC, despite its reliance on a peaceful, trade-friendly international environment, needs to push back in a more overt way than simply bullying Vietnamese fishing boats in the South China Sea.

    That would be a risky decision, given that the US has announced that Asia is a key US national interest - presumably, an interest it is prepared to defend with the full range of options available to it. Or, as Secretary Clinton put it: "Harnessing Asia's growth and dynamism is central to American economic and strategic interests ... "

    America possesses the doctrine, the means, and the motivation to make mischief for the PRC. All that is lacking, for the time being, is a suitable opportunity - or a fatal miscalculation by either side.

    2012 promises to be an anxious and unpleasant year in US-China relations.

    Notes
    1. America's Pacific Century, Foreign Policy, November, 2011.
    2. Prepare for war, Chinese navy is told as Pacific tensions grow, London Evening Standard, Dec 7, 2011.
    3. No, Hu Didn't Call for War, The Diplomat, Dec 10, 2011.
    4. Click Here for the Chinese text.
    5. China's CNPC says Myanmar pipeline work continues despite dam row, Reuters, Oct 3, 2011.
    6. Clinton Adopts Jobs's 'Think Different' Motto for Diplomacy, Bloomberg, Oct 15, 2011.
    7. U.N. Security Council debates preventive diplomacy, Foreign Policy, Sep 22, 2011.

    Peter Lee writes on East and South Asian affairs and their intersection with US foreign policy.

    http://www.atimes.com/atimes/China/ML22Ad05.html

  • #2
    Re: Peter Lee on China 2012

    looks like a China Times double feature . . .

    Playing chess in Eurasia
    By Pepe Escobar

    Bets are off on which is the great story of 2011. Is it the Arab Spring(s)? Is it the Arab counter-revolution, unleashed by the House of Saud? Is it the "birth pangs" of the Greater Middle East remixed as serial regime changes? Is it R2P ("responsibility to protect") legitimizing "humanitarian" bombing? Is it the freeze out of the "reset" between the US and Russia? Is it the death of al-Qaeda? Is it the euro disaster? Is it the US announcing a Pacific century cum New Cold War against China? Is it the build up towards an attack on Iran? (well, this one started with Dubya, Dick and Rummy ages ago ...)

    Underneath all these interlinked plots - and the accompanying hysteria of Cold War-style headlines - there's a never-ending thriller floating downstream: Pipelineistan. That's the chessboard where the half-hidden twin of the Pentagon's "long war" is played out. Virtually all current geopolitical developments are energy-related. So fasten your seat belts, it's time to revisit Dr Zbigniew Brzezinski's "grand chessboard" in Eurasia to find out who's winning the Pipelineistan wars.

    Got tickets to the opera?
    Let's start with Nabucco (the gas opera). Nabucco is above all a key, strategic Western powerplay; how to deliver Caspian Sea gas to Europe. Energy execs call it "opening the Southern Corridor" (of gas). The problem is this Open Sesame will only deliver if supplied by a tsunami of gas from two key "stans" - Turkmenistan and Azerbaijan.

    The 3,900-kilometer Nabucco will hit five transit countries - Austria, Bulgaria, Hungary, Romania and Turkey - and it may end costing a staggering 26 billion euros (US$33.7 billion) [1].

    Construction - endlessly delayed - might start by 2013. Essentially, everything is still a bloody mess. Nobody knows about prices, or the details of transit rights. Turkey is also eager to resell the gas on its own. Moreover, if Baku and Ankara decide to develop in tandem the Shah Deniz phase II [2] fields in Azerbaijan to feed the pipeline, they will need an extra $20 billion in investment.

    Turkmenistan's president, the spectacularly named Gurbanguly Berdymukhamedov, sticks to his trademark wobbly script (Check him out singing his original hit "For You, My White Flower" ). He always says the European Union's myriad proposals "would be studied" and cooperation with the Europeans is "a strategic priority" of his foreign policy. But the EU's Holy Grail - an ironclad agreement to get the gas - is ever more elusive. The Russians and even the Azeris bet this will never happen.

    Our man Gurbanguly, savvy operator that he is, would prefer to hatch his eggs in a Chinese basket - rather than in those far-away euro-messy lands. That's why he wobbles - feigning he's open to any offer. He knows better than anybody that for the Europeans Nabucco is the key to be released (a bit) from the grip of Russia's Gazprom. At the same time he keeps in mind how to maximize his Chinese profits while not antagonizing Russia.

    Every European bureaucracy (not) worth its name is behind Nabucco [3], and most of all an eager European Commission (EC), the EU's fat salary-infested executive branch. The EC's do-or-die strategic priority is to link the Turkmen port of Turkmenbashi to the Absheron Peninsula in Azerbaijan via a Trans-Caspian Gas pipeline (TCGP) [4]. It's a breeze; I did the trip on a vodka-infested Azeri cargo ship and it took me only 12 hours.

    But how to pull it off? Moscow locked up all Azeri gas. Gazprom locked up all the surplus gas from Turkmenistan. The only option would be Iran. Now tell that to the US Senate - who has declared economic war [5] against Iran.

    Let's go TAPI!
    A detour to AfPak is in order. Not even the deities who lord over the Hindu Kush know if the $7.6 billion (and counting), 1,735-kilometer TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline will ever be built.

    For Turkmenistan's Oil and Gas Minister Bayramgeldy Nedirov, "There are no doubts that this [TAPI] project will be realized." [6] Pakistan and India - after infinite haggling - have finally agreed on pricing. Roughly a third of the pipeline's cost will be financed by the Philippines-based Asian Development Bank - since both Afghanistan and Pakistan are essentially broke.

    Imagine a steel serpent entering western Afghanistan towards Herat, going south underground (to prevent terrorist bombing) parallel to the Herat-Kandahar road, then taking a detour via Quetta - home of Taliban supremo Mullah Omar - to Multan in Pakistan and finally reaching Fazilka, on the Indian border.

    To quote Sam Spade in The Maltese Falcon, "This is the stuff dreams are made of," since the Bill Clinton administration, way before 9/11 and the now virtually extinct GWOT ("global war on terror"). Cynics may read this as gas republic Turkmenistan - holder of the fourth-largest reserves in the world - doing better to promote economic development and security in Afghanistan than 100,000 US troops.

    The gas for TAPI will come from the new South Yolotan-Osman field - which already supplies China (according to British auditor Gaffney, Cline & Associates this is the world's second-largest [7] gas field, after South Pars in Iran). Our man Gurbanguly, by the way, issued a decree changing the gas field's name to Galkynys - Turkmen for "Renaissance"; after all, Gurbanguly's reign has been baptized as "The Epoch of New Renaissance and Great Transformations". These "transformations" have nothing to do with the Arab Spring(s).

    Here we find yet another clever gambit by our man Gurbanguly. He keeps an open door to Nabucco by freeing the gas from Dauletabad field in southeast Turkmenistan to flow via a domestic pipeline to the Caspian, and then to the oh so elusive TCGP. Even the (delicious) sturgeons in the Caspian know that without a TCGP, Nabucco is DOA.

    At least for a year now our man Gurbanguly has been telling every diplomat and top oil exec in sight that he rejects Russia's interference over Turkmenistan's gas strategy. [8] But apparently he didn't inform the Russians.

    Russian President Dmitri Medvedev did visit Ashgabat - the Las Vegas of Central Asia - to talk business [9]. And then, in a daring plot twist, suddenly Gazprom proclaimed its love of TAPI! Just imagine; the Americans have been dreaming of TAPI since 1996, just for rival Gazprom to barge in at overtime. No one knew what Medvedev offered to Gurbanguly so he wouldn't keep entertaining fancy Louis Vuitton ideas. Perhaps nothing. We'll come to that in a minute.

    Ask the babushkas
    TAPI's direct competition is IPI - the Iran-Pakistan-India pipeline (India, pressured by the US, has virtually dropped out; China is ready to pounce and turn it into IPC). Well, who else but Gazprom now wants to get into the IP groove as well [10], alongside China's CNPC? The Iranian stretch of the pipeline is virtually ready. The Pakistani stretch begins in early 2012. Still another Russian chess move - and Washington never saw it coming.

    Even a wooden babushka knows what Moscow does not want; the Afghan chapter of the US Empire of Bases never going away. Then there's regime change in Syria (with the implicit end of the Russian Black Sea fleet using the port of Tartus). The North Atlantic Treaty Organization's (NATO's) advances in the Black Sea. The ever-expanding (at least rhetorically) US missile defense and the US's "New Silk Road" gambit to re-penetrate Central Asia [11].

    It was Russia that authorized the Northern Distribution Network (NDN) to supply US and NATO troops in Afghanistan [12], an endless trek across Eurasia, including Uzbekistan - whose ghastly dictatorship US Secretary of State Hillary Clinton praised for its political "progress" - and Tajikistan. Pushing Moscow too far is not exactly a winning strategy.

    Moscow also sees how Washington has antagonized virtually everyone in Pakistan - with the non-stop "war of the drones", the non-stop violations of territorial sovereignty, the non-stop threats to barge in and "take over your nuclear arsenal". Washington's priority is for Islamabad to attack the Pakistani Taliban in Balochistan and thus be dragged into a civil war against not only Pashtuns but also Balochis. As Moscow - and Beijing - survey the battlefield, all they have to do is bide their time while sipping green tea.

    When former reds see red
    The Russian-Chinese entente is not always a Bolshoi dance.

    Russia wants to sell gas to China for $400 per 1,000 cubic meters (cm), the same price it charges Europe. The wily Turkmen charge the Chinese only $250. Beijing already spent $4 billion in South Yolotan (and counting); they want all the gas they can get to supply the hugely successful Turkmenistan-Uzbekistan-Kazakhstan-China pipeline (which they built), online for two years now [13]. Beijing is insatiable; oil major CNPC wants to import no less than 500% more gas from Central Asia by 2015 [14].

    What this means is that for China the potentially $1 trillion-worth, 30-year gas deal with Russia may not be as imperative [15]. Gazprom's strategy boils down to two pipelines from Siberia to China. For Russia, this is absolutely essential in terms of making money out of Siberia. Geopolitical ramifications are immense. A close Russia-China steel umbilical cord may be interpreted in Europe - a virtual hostage of Gazprom - as perhaps a signal that they need Iran more than ever. At the same time Russia remains extremely uncomfortable with China's energy onslaught all across Central Asia.

    This is Beijing's take, in a nutshell. We won't pay European prices for Turkmen gas. And we don't want a TCGP to Europe. China, Russia, even Iran, no one outside NATO wants the TCGP [16].

    So this is how it breaks down. The Turkmen may sell gas to China and Iran. They may even sell gas to South Asia via TAPI (after all Gazprom has joined the party). But forget about selling gas to Europe - where Gazprom rules. No one knows whether our man Gurbanguly got the message.

    All hail the gas Czar
    Any way you look at it, there's this inescapable feeling the Czar of Pipelineistan is Vladimir Putin (and just like the Terminator, he will be back, next March, as president, whatever his current predicament). After all, Russia produces more oil than Saudi Arabia (at least until 2015 [17]) and has the world's largest known reserves of natural gas. Around 40% of all Russian state funds come from oil and gas.

    Putin's plan is deceptively simple; Gazprom "takes over" Western Europe and thus neutralizes the North Atlantic Treaty Organization (NATO).

    Exhibit 1 is the Nord Stream, a $12 billion, twin 1224-km pipeline, respecting extraordinary complex environmental guidelines, launched last September. That's gas from Siberia delivered under the Baltic Sea, bypassing problematic Ukraine, straight to Germany, Britain, the Netherlands, France, Belgium, Denmark and the Czech republic (10% of the entire EU annual gas consumption, or one third of China's entire current gas consumption). Former German chancellor Gerhard Schroeder heads the Nord Stream consortium.

    Exhibit 2 is the South Stream (the shareholder agreement is already signed between Russia, Germany, France and Italy). That's Russian gas delivered under the Black Sea to the southern part of the EU, through Bulgaria, Serbia, Hungary and Slovakia. Instrumental in the deal was the quality time Putin spent with his close pal, former Italian prime minister Silvio "bunga bunga" Berlusconi.

    Nord Stream drove Washington nuts. Not only it redesigned Europe's energy configuration; it forged an unbreakable German-Russian strategic link. Putin, better than anyone, knows how pipelines hardwire governments. South Stream is driving Washington nuts because it beats Nabucco hands down, and it's way cheaper. Talk about a geopolitical - and geoeconomic - battle.

    Washington - alarmed at what the Germans deliciously dubbed the "modernization partnership" with Russia - is left to promote European "resistance" to Gazprom's onslaught, as if Germany was Zucotti Park and Russia was the NYPD. Again here's Pipelineistan infused with political reverberations. For instance, Germany and Italy are totally against NATO expansion. The reason? Nord and South Stream. The formidable German export machine is fueled by Russian energy; the motto might be "Put a Gazprom in my Audi".

    As William Engdahl, author of the seminal A Century of War: Anglo-American Oil Politics in the New World Order, has observed, the "Nord Stream and South Stream are poised to leap out of the world of energy security and choreograph an altogether new power dynamic in the heart of Europe." [18]

    Putin's roadmap is his paper, "A new integration project for Eurasia: The future in the making", published by Izvestia in early October [19]. It may be dismissed as megalomania, but it may also be read as an ippon - Putin loves judo - against NATO, the International Monetary Fund and neo-liberalism.

    True, President Nursultan Nazarbayev of "snow leopard" Kazakhstan was already talking about a Eurasian Union way back in 1994. Putin, though, makes it clear this wouldn't be Back In The USSR territory, but a "modern economic and currency union" stretching all across Central Asia.

    For Putin, Syria is just a detail; the real thing is Eurasian integration. No wonder Atlanticists started freaking out with this suggestion of "a powerful supranational union that can become one of the poles of today's world while being an efficient connecting link between Europe and the dynamic Asia-Pacific Region". Compare it with US President Barack Obama and Hillary's Pacific doctrine [20].

    You integrate when I say so
    Everything is up for grabs at the crucial intersection of hardcore geopolitics and Pipelineistan. Washington's New Silk Road dream is not exactly a success. [21]

    Moscow, for its part, now wants Pakistan to be a full member of the Shanghai Cooperation Organization (SCO) [22]. That also applies to China in relation to Iran. Imagine Russia, China, Pakistan and Iran coordinating their mutual security inside a strengthened SCO, whose motto is "non-alignment, non-confrontation and non-interference in the affairs of other countries". R2P it ain't.

    Snags abound. For China the SCO is above all about economics and trade [23]. For Russia it's above all a security bloc [24], which must absolutely find a regional solution to Afghanistan that keeps the Taliban under control and at the same time gets rid of the Afghan chapter of the US Empire of Bases.

    As Pipelineistan goes, with Russia, Central Asia and Iran controlling 50% of world's gas reserves, and with Iran and Pakistan as virtual SCO members, the name of the game becomes Asian integration - if not Eurasian. China and Russia now coordinate foreign policy in extreme detail. The trick is to connect China and Central Asia with South Asia and the Gulf - with the SCO developing as an economic/security powerhouse. In parallel, Pipelineistan may accelerate the full integration of the SCO as a counterpunch to NATO.

    In realpolitik terms, that makes much more sense than a New Silk Road invented in Washington. But tell that to the Pentagon, or to a possible bomb Iran, scare China, neo-con-remote-controlled next president of the United States.

    Notes
    1. Hungary sees Nabucco costs quadrupling, may sue French firm, Reuters, Oct 24, 2011.
    2. Shah Deniz II Natural Gas Field: What Will Azerbaijan's Decision Be? ITGI, Nabucco or TAP?, Turkish Weekly, 18 August 2011.
    3. EU banks throw their weight behind Nabucco pipeline, EU Observer, September 2010.
    4. Trans-Caspian pipeline vital to Nabucco, Petroleum Economist, October 2011.
    5. U.S. Senate Passes Iran Oil Sanctions as EU Blacklist Grows, Bloomberg, December 5, 2011.
    6. ‘Gas pipeline deal for Pakistan, India imminent’ , The Express Tribune, November 5, 2011.
    7. Second Gas Congress of Turkmenistan, Open Central Asia, June 5 2011.
    8. Gazprom Disbelief Draws Turkmen Ire , Moscow Times, 22 November 2011.
    9. Russia, Turkmenistan focus on energy cooperation, Caspian problems, innovation BSR Russia, 24 October 2010.
    10. Russian gas giant may fund 780-km pipeline, Pakistan Observer, August 22, 2011.
    11. The United States' "New Silk Road" Strategy: What is it? Where is it Headed?, US State Dept, September 29, 2011.
    12. US Now Relies On Alternate Afghan Supply Routes, NPR, September 16, 2011.
    13. China plays Pipelineistan, Asia Times Online, Dec 24, 2009.
    14. Central Asia-China Gas Pipeline’s Capacity To Nearly Double, Oil and Gas Eurasia, August 29, 2011.
    15. Russia, China closer to gas deal says Putin, RIA NOVOSTI, October 11.
    16. China Plans To Buy All Turkmenistan's Gas To Scuttle Sales To Europe..., Geofinancial, November 24, 2011.
    17. Saudi Arabia to overtake Russia as top oil producer-IEA , Reuters, Nov 9, 2011.
    18. http://www.globalresearch.ca/index.php?context=va&aid=27653 , Global Research, November 14, 2011.
    19. Izvestia publishes an article by Prime Minister Vladimir Putin on cooperation and interaction in the post-Soviet space.
    20. China and the US: The roadmaps , Al-Jazeera, 31 Oct 2011.
    21. US's post-2014 Afghan agenda falters , Asia Times Online, Nov 4, 2011.
    22. Russia endorses full SCO membership for Pakistan Dawn, November 7, 2011.
    23. SCO member states vow to strengthen economic cooperation , Xinhua, Nov. 7, 2011.
    24.Russia, China don’t see US in SCO , Voice of Russia, Nov 1, 2011.

    Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007) and Red Zone Blues: a snapshot of Baghdad during the surge. His new book, just out, is Obama does Globalistan (Nimble Books, 2009).

    http://www.atimes.com/atimes/Central_Asia/ML22Ag02.html

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    • #3
      Re: Peter Lee on China 2012

      note this essay is a month old. Would the "Euro Crisis" have altered Wallerstein's opinion?

      Commentary No. 317, Nov. 15, 2011
      "The Paris-Berlin-Moscow Axis Back Again"

      It always amazes me how the world's politicians and media spend most of their energy debating geopolitical prospects that are not going to happen, while ignoring major developments that are happening.

      Here is a list of the most important coming non-events that we have been loudly debating and analyzing: Israel is not going to bomb Iran. The euro is not going to disappear. Outside powers are not going to engage in military action inside Syria. The upsurge of worldwide popular unrest is not going to fade away.

      Meanwhile, to minimal serious coverage in the media and on the internet, the Nord Stream was inaugurated in Lubmin on Germany's Baltic Coast on Nov. 8 in the presence of Pres. Medvedev of Russia and the prime ministers of Germany, France, and the Netherlands, plus the director of Gazprom, Russia's gas exporter, and the European Union's Energy Commissioner. This is a geopolitical game-changer, unlike all the widely discussed non-events that are not going to happen.

      What is Nord Stream? Very simply, it is a gas pipeline that has been laid in the Baltic Sea, going from Vyborg near St. Petersburg in Russia to Lubmin near the Polish border in Germany without passing through any other country. From Germany, it can proceed to France, the Netherlands, Denmark, Great Britain, and other eager buyers of Russia's gas.


      Nord Stream is an arrangement between private enterprises with the blessing of their respective governments. Russia's Gazprom owns 51%, two German companies 31%, and 9% each for one French and one Dutch company. The proportional investments (and the potential profits) are all private.

      The key element in this arrangement is that the pipeline does not pass through Poland or any Baltic state or Belorussia or Ukraine. So, all these countries not only lose whatever transit fees they could charge but cannot use their intermediary location to hold up supplies of gas to western Europe while they negotiate deals with Russia.

      The German press agency, Deutsche Welle, headlined its story "Nord Stream: A commercial project with a political vision." Le Monde headlined its story "Gazprom is established as a global energy actor." Joseph Bauer, energy expert from Deutsche Bank Research in Frankfurt am Main, opined "It's both a political and a commercial project, and it makes sense on both the economic and political level."


      Meanwhile the Russians have told the Chinese that they will not sell them their gas at 30% below the European prices, saying they see no need for Russia to subsidize the Chinese economy. And they have made it clear to Turkmenistan, which has enormous natural gas resources, that they will not appreciate its exporting gas other than via Russia. The Nord Stream launching comes within days of the announcement by the new president of Kyrgyzstan that he expects to close down the U.S. military air base at Manas when its lease expires in 2014. This base has been crucial in U.S. supply links to Afghanistan. Clearly, Russia is strengthening its hold on the Soviet Union's former Central Asian republics.

      Both East-Central Europe and the United States are discovering that the scheme to prevent the creation of a Paris-Berlin-Moscow axis is not viable. The European Union's central mechanisms are bending before this reality, as are many of the east-central European countries. This is most difficult for Ukraine, which is torn apart by these developments. And the United States? What in fact can they do about it?

      by Immanuel Wallerstein

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