Strange
how the ideas that turn up in your head arise at the same moment in the
heads of other people. We awoke this morning with the idea that China
could be taking advantage of the war in Ukraine and look, several others
wrote about that same thing today. So, we try to compel the situation.
It’s
clear that Russia at this moment has every interest in reinforcing its
economic ties with China. That Russia can do that makes clear also that
the country has an advantage over “the West”: the losses generated by
the mutual boycott can be compensated by the gains from better relations
with other countries. That’s a possibility “the west”, as far as we
know, doesn’t have.
One
of the recent, and very striking, examples of these compensations is
the 2500 mile pipeline connecting the Yakutia gas fields with the Chines
border. Negotions over that pipeline were successfully finished in May,
Putin opened “the biggest construction project in the world” in Eastern
Siberia yesterday. The gas contract associated with the pipeline is
worth 400 billion dollars over 30 years. Not entirely without risks for
Russia because China could try to put pressure on the prices, but at the
other hand there’s the fact that China really needs that gas.
Meanwhile
the China National Petroleum Corporation (CNPC) holds 20 percent in a
project planned on the Yamal peninsula by Russia’s Novatek Group and
Total France, while it also works with Rosneft on oil deposits in
Eastern Siberia and got an offer from Putin this week to gain a stake in
the huyge Vankor oil field.
So
Russia succeeds in replacing the money not coming from the West anymore
by money newly coming from the East, China succeeds in diversifying its
energy supplies. Both win.
But
there’s more. China and Russia agreed today to settle a bigger part of
their bilateral trade in their own currencies and to enhance the
cooperation between their banks. Goal: to diminish dependence on the
currency of a third country, read: the dollar. Second goal: keeping
entrance to the financial market open for Russian companies despite the
sanctions of the European Union and the United States. Third goal:
bringing closer the ambition of China to make the yuan the global
reserve currency one day and curb the risks of the investments in US
government debt.
And
then there’s this: China has military and economic interest in keeping
open the “land road” over Russia. Because for the “maritime road” China
has to take into account the US navy, while the “land road” that
connects China, Kazakhstan and Russia guarantees a safe passage for
Chinese export to Europe, the Middle East and Africa. While Russia has
interest in exporting energy and other products via that same “land
road” to China. Li Hui, the Chinese ambassador in Moscow, keeps on
repeating that “China and Russia are together like lips and teeth”.
But
that’s not all of it. Ukraine and Russia namely have become competitors
instead of being each other’s supplier and buyer, especially concerning
… military equipment. Both are thus looking for new buyers and both are
looking towards China. So China finds itself in a buyer’s market, which
allows the country to get military technology and expertise easier and
cheaper. At the other hand Chinese suppliers could be a cheap
alternative for production of certain military gear in Russia (where
that gear used to be bought in Ukraine), what could be an advantage for
Russia too. Finally, to the advantage of both Russia and China, there’s
the fact that third countries under international pressure could resolve
to buy weapons – be it or be it not made in Russia – in China.
The
growing connectedness between China and Russia is – though there’s not
an official alliance yet – starting to influence third countries
already. Mongolia, for example, caught between these two powers, has
been courted by Russia and China for weeks and is repositioning its
foreign policy more and more towards its two neighbors. Mansour
Moazzemi, Iranian deputy minister for Oil communicated yesterday that
his country will be working closer together with Russia and China to
bypass the sanctions against Iran. Interesting for Russia because Iran
is buyer of military equipment, interesting for China because Iran is
its third biggest supplier of crude oil. And what about the joint
military exercise against an imaginary “separatist organization” that
Kazakhstan, Kyrgyzstan, Tajikistan, together with Russia and China
organized at the end of August ?
Well,
we don’t know if the winner of the war in Ukraine will be called China,
but we do have the impression that the action there led by the United
States is bringing the block of potential adversaries closer together …
Talking about adversaries: Dieter and Lena have more of them then they actually would like. Read more about it in the free prequel to The Maier-Files.
Geen opmerkingen:
Een reactie posten