Category Archives: China
The People’s Republic of China (PRC), established in 1949, commonly known as China, has control over mainland China and the largely self-governing territories of Hong Kong (since 1997) and Macau (since 1999).
Russia And China Finally Sign Historic $400 Billion “Holy Grail” Gas Deal
There was some trepidation yesterday when after the first day of Putin’s visit to China the two countries did not announce the completion of the long-awaited “holy grail” gas dead, and fears that it may get scuttled over price negotiations. It wasn’t: moments ago Russia’s Gazprom and China’s CNPC announced, that after a decade of negotiations, the two nations signed a 30 year gas contract amounting to around $400 billion. And with the west doing all it can to alienate Russia and to force it into China’s embrace, this is merely the beginning of what will be a far closer commercial (and political) relationship between China and Russia.
So far there have been no public pricing details on the deal which accrording to Gazprom CEO Aleksey Miller is a “commercial secret”, and which is believed to involve Russia supplying 38 billion cubic metres of gas per year to China via a new eastern pipeline linking the countries.
According to Itar-Tass, the compromise between Russian gas export monopoly Gazprom and Chinese National Petroleum Corporation (CNPC) on Russian gas price is estimated at $75 billion, citing the Deputy Head of the National Energy Security Fund Alexei Grivach. The differences on the price for 38 and 60 billion cubic meters supplies a year were $1.5 billion and $2.5 billion, he added, so the subject of the negotiations is quite a significant one.
Gazprom expected a base price of $400 for 1,000 cubic meters, an expert of the Eurasian Development Research Center of the Chinese State Council said in April, whereas the CNPC’s proposal was $350-360 for 1,000 cubic meters.
A memorandum of understanding was signed in the presence of Russian President Vladimir Putin and President of China Xi Jinping on the second day of Putin’s two-day state visit to Shanghai. The price China will pay for Russian gas remains a “commercial secret” according to Gazprom CEO Aleksey Miller. Gas will be delivered to China’s via the eastern ‘Power of Siberia’ pipeline.
RT producers were informed of the landmark energy deal prior to its signing after a conversation with Miller.
Under the long-term deal, Gazprom will begin providing China’s growing economy with 38 billion cubic meters of natural gas per year for the next 30 years, beginning in 2018. The details of the deal were discussed for more than 10 years, with Moscow and Beijing negotiating over gas prices and the pipeline route, as well as possible Chinese stakes in Russian projects.
Just ahead of Putin’s visit to Shanghai, Russian Prime Minister Dmitry Medvedev gave reassurance that the agreed price would be fair.
“One side always wants to sell for a higher price, while the other wants to buy for a lower price,” Medvedev said. “I believe that in the long run, the price will be fair and totally comparable to the price of European supplies.”
A major breakthrough in negotiations came on Sunday as Gazprom chief Aleksey Miller sat down with his CNPC counterpart, Zhou Jiping, in Beijing to discuss final details, including price formulas.
Although Europe is still Russia’s largest energy market – buying more than 160 billion cubic meters of Russian natural gas in 2013 – Moscow will use every opportunity to diversify gas deliveries and boost its presence in Asian markets.
“I wouldn’t look for politics behind this, but I have no doubt that supplying energy to the Asia Pacific Region holds out a great promise in the future,” Medvedev said.
In October 2009, Gazprom and CNPC inked a framework agreement for the Altai project which envisions building a pipeline to supply natural gas from fields in Siberia via the western part of the Russia-China border.
In March 2013, Gazprom and CNPC signed a memorandum of understanding on Russian gas supplies to China along the so-called eastern ‘Power of Siberia’ route. When both pipelines are activated, Russia can supply Asia with 68 billion cubic meters of gas annually.
Last year, China consumed about 170 billion cubic meters of natural gas and is expected to consume 420 billion cubic meters per year by 2020.
Regardless of what the final price ended up being, and whether or not China got the upper hand in the negotiations, the final outcome is there and it is real: as a result of his disastrous foreign policy in the past two months, Barack Obama finally pushed Russia into China’s hands, culminating with a deal that was ten years in the making and was never certain, until the Ukraine crisis.
And yes, this was all predictable from day one. Here is what we said precisely two months ago:
If it was the intent of the West to bring Russia and China together – one a natural resource (if “somewhat” corrupt) superpower and the other a fixed capital / labor output (if “somewhat” capital misallocating and credit bubbleicious) powerhouse – in the process marginalizing the dollar and encouraging Ruble and Renminbi bilateral trade, then things are surely “going according to plan.”
For now there have been no major developments as a result of the shift in the geopolitical axis that has seen global US influence, away from the Group of 7 (most insolvent nations) of course, decline precipitously in the aftermath of the bungled Syrian intervention attempt and the bloodless Russian annexation of Crimea, but that will soon change. Because while the west is focused on day to day developments in Ukraine, and how to halt Russian expansion through appeasement (hardly a winning tactic as events in the 1930s demonstrated), Russia is once again thinking 3 steps ahead… and quite a few steps east.
While Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the “Holy Grail” energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis. One which, as some especially on these pages, have suggested would lay the groundwork for a new joint, commodity-backed reserve currency that bypasses the dollar, something which Russia implied moments ago when its finance minister Siluanov said that Russia may refrain from foreign borrowing this year. Translated: bypass western purchases of Russian debt, funded by Chinese purchases of US Treasurys, and go straight to the source.
Here is what will likely happen next, as explained by Reuters:
Igor Sechin gathered media in Tokyo the next day to warn Western governments that more sanctions over Moscow’s seizure of the Black Sea peninsula from Ukraine would be counter-productive.
The underlying message from the head of Russia’s biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances.
The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West.
* * *
To summarize: while the biggest geopolitical tectonic shift since the cold war accelerates with the inevitable firming of the “Asian axis”, the west monetizes its debt, revels in the paper wealth created from an all time high manipulated stock market while at the same time trying to explain why 6.5% unemployment is really indicative of a weak economy, blames the weather for every disappointing economic data point, and every single person is transfixed with finding a missing airplane.
To conclude with the traditional geopolitical balance of power summary: Putin wins (again), Obama loses (again), and the monument to the dollar’s status as world’s reserve currency gets yet another tarnishing blow.
China Threatens the West As the U.S. Shows a Slight Reaction to Russian Aggression
China is warning the West to not impose sanctions on Russia because “sanctions could lead to retaliatory action, and that would trigger a spiral with unforeseeable consequences.”
Jedidiah Noble, who is not a geo-political strategist – he’s actually an engineer – predicted exactly this. If Jedidiah can make these predictions, why is it Mr. Obama can’t?
Mr. Obama has done little to stop Putin from rebuilding the Soviet Union. Putin remains in Georgia and has overtaken Crimea with barely-disguised Russian troops slipping in and out of the iron curtain they have erected between Ukraine and Crimea.
Yesterday, in a press conference with Ukraine’s PM, Mr. Obama gave Crimea away without even a whimper.
Mr. Obama gave away the missile defense shield and got nothing in return. He has drawn red lines and drawn lines without calling them red lines, but has done nothing retaliatory except move the line back.
China has been a menace to Japan and is threatening to take over sixteen islands in the East China Sea. The islands have value for their fisheries but mostly it’s a power grab by China and it will give China a strategic advantage in any military conflict. Mr. Obama has done little to nothing to support Japan.
When Russia moved into Crimea, Mr. Putin spoke with China’s leaders. He allegedly worked out some sort of deal. One can be sure that China’s imperialistic vision is part of the deal.
Russia used the imaginary threat to Russian populations living in Crimea as an excuse to go into Crimea once freedom fighters overturned the government in Ukraine. Now one can expect China to use an imaginary allegiance to Russia as an excuse for taking further steps.
In addition to our facing land grabs, we are in trouble economically if Russia and China join forces. We are deeply in debt to both Russia and China to say nothing of the fact that our dollar is threatened as the world currency.
China responded to the West threatening Russia with sanctions in this way: ”We don’t see any point in sanctions,” said Shi Mingde, China’s Ambassdor to the EU. “Sanctions could lead to retaliatory action, and that would trigger a spiral with unforeseeable consequences. We don’t want this.”
The sanctions are only travel bans and asset freezes on people and companies accused by Brussels of violating the territorial integrity of Ukraine.
Russia’s Deputy Economy Minister Alexei Likhachev responded by promising “symmetrical” sanctions by Moscow.
Mr. Obama is allegedly speaking with Beijing and working on a deal but there is no sign there will be a result favorable to the U.S. Mr. Mingh’s statement is a warning, but then again who could see that coming.
Can we even survive two more years of Mr. Obama?
Remember to vote in November!
China steps up Afghan role as Western pullout nears
(Reuters) – China and Afghanistan will sign an agreement in the coming days that strategically deepens their ties, Afghan officials say, the strongest signal yet that Beijing wants a role beyond economic partnership as Western forces prepare to leave the country.
China has kept a low political profile through much of the decade-long international effort to stabilize Afghanistan, choosing instead to pursue an economic agenda, including locking in future supply from Afghanistan’s untapped mineral resources.
As the U.S.-led coalition winds up military engagement and hands over security to local forces, Beijing, along with regional powers, is gradually stepping up involvement in an area that remains at risk from being overrun by Islamist insurgents.
Chinese President Hu Jintao and his Afghan counterpart Hamid Karzai will hold talks on the sidelines of the Shanghai Cooperation Organisation summit in Beijing this week, where they will seal a wide-ranging pact governing their ties, including security cooperation.
Afghanistan has signed a series of strategic partnership agreements including with the United States, India and Britain among others in recent months, described by one Afghan official as taking out “insurance cover” for the period after the end of 2014 when foreign troops leave.
“The president of Afghanistan will be meeting the president of China in Beijing and what will happen is the elevation of our existing, solid relationship to a new level, to a strategic level,” Janan Musazai, a spokesman for the Afghan foreign ministry, told Reuters.
“It would certainly cover a broad spectrum which includes cooperation in the security sector, a very significant involvement in the economic sector, and the cultural field.”
He declined to give details about security cooperation, but Andrew Small, an expert on China at the European Marshall Fund who has tracked its ties with South Asia, said the training of security forces was one possibility.
China has signaled it will not contribute to a multilateral fund to sustain the Afghan national security forces – estimated to cost $4.1 billion per year after 2014 – but it could directly train Afghan soldiers, Small said.
“They’re concerned that there is going to be a security vacuum and they’re concerned about how the neighbors will behave,” he said.
Beijing has been running a small program with Afghan law enforcement officials, focused on counter-narcotics and involving visits to China’s restive Xinjiang province, whose western tip touches the Afghan border.
Training of Afghan forces is expected to be modest, and nowhere near the scale of the Western effort to bring them up to speed, or even India’s role in which small groups of officers are trained at military institutions in India.
China wants to play a more active role, but it will weigh the sensitivities of neighboring nations in a troubled corner of the world, said Zhang Li, a professor of South Asian studies at Sichuan University who has been studying the future of Sino-Afghan ties.
“I don’t think that the U.S. withdrawal also means a Chinese withdrawal, but especially in security affairs in Afghanistan, China will remain low-key and cautious,” he said. “China wants to play more of a role there, but each option in doing that will be assessed carefully before any steps are taken.”
JOSTLING FOR INFLUENCE
Afghanistan’s immediate neighbors Iran and Pakistan, but also nearby India and Russia, have all jostled for influence in the country at the crossroads of Central and South Asia, and many expect the competition to heat up after 2014.
India has poured aid into Afghanistan and like China has invested in its mineral sector, committing billions of dollars to develop iron ore deposits, as well as build a steel plant and other infrastructure.
It worries about a Taliban resurgence and the threat to its own security from Pakistan-based militants operating from the region.
Pakistan, which is accused of having close ties with the Taliban, has repeatedly complained about India’s expanding role in Afghanistan, seeing Indian moves as a plot to encircle it.
“India-Pakistan proxy fighting is one of the main worries,” said Small.
In February, China hosted a trilateral dialogue involving officials from Pakistan and Afghanistan to discuss efforts to seek reconciliation with the Taliban.
It was first time Beijing involved itself directly and openly in efforts to stabilize Afghanistan.
Afghan foreign ministry spokesman Musazai said Kabul supported any effort to bring peace in the country. “China has close ties with Afghanistan. It also has very close ties with Pakistan and if it can help advance the vision of peace and stability in Afghanistan we welcome it.”
(Additional reporting by Chris Buckley in BEIJING; Editing by Daniel Magnowski)
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Katzenberg Tied to Chinese Corruption
The New York Times reports today on the rise of China’s “princelings,” the children of the Communist Party’s former and current leadership, who have taken control over many of that country’s most profitable businesses.
The New York Times reveals that Katzenberg’s silent Chinese partner in the deal is Jiang Mianheng, the son of former Communist Party leader and Chinese President Jiang Zemin.
What the New York Times does not reveal is that Katzenberg is the largest donor to President Obama’s Super PAC Priorities USA at $2 million and a major bundler to the Obama campaign, having raised more than $500,000 for the President’s reelection campaign.
Also not revealed by the New York Times, Katzenberg and his studio are currently under SEC investigation for bribing Chinese officials in order to obtain access to the Chinese market.
The Dreamworks deal has raised questions about pay for play on the American side as well. The nonpartisan Sunlight Foundation notes that Katzenberg’s deal was made possible with help from the Obama administration, which arranged a meeting for Katzenberg with Chinese Vice President and heir apparent Xi Jingping after his White House visit in February. Xi traveled from the White House to Los Angeles to sign the deal with the major Obama donor.
The Sunlight Foundation asks if “Katzenberg’s support for Obama fast-track[ed his] movie deal with China?” But Dreamworks would not respond to on-the-record questions from the good government watchdog group.
Vice President Biden also personally engaged in the negotiations with the Chinese government in advance of Katzenberg’s deal that effectively raised the number of U.S. films that could be released in the Chinese market each year—an agreement that made the Katzenberg deal significantly more valuable.
Earlier this month, President Obama embraced Katzenberg just days after the SEC announced its investigation. “I want to thank Jeffrey (Katzenberg) not just for this evening, but for his tenacious support and advocacy since we started back in 2007. He has consistently been there for me, through thick and through thin,” Obama said.
“The only person I don’t have to remind [of how difficult the 2008 campaign was] is Jeffrey because he was there, through all the ups and downs, and occasionally he would call, and he would say, ‘Barack, I don’t think that things are working the way they’re supposed to.’”
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China: GMC and Horton Wison Deepwater Develop Buoyant Towers for Shallow Water Fields
GMC and Horton Wison Deepwater confirmed their Joint Venture established to design and supply innovative Buoyant Towers for shallow water fields.
Kevin Chell, CEO of the joint venture, stated “The Buoyant Tower concept draws on the proven technology of the cellspar and the design provides multiple benefits for fields where other concepts would be problematic requiring high capital costs and expensive crane barges for installation. The buoyant tower can operate in water depths up to 600 feet and can be relocated allowing small marginal plays to be exploited in a cost effective manner. The design allows for hydrocarbon storage if needed, can eliminate separate shallow water drilling units and provides a high level of flexibility for the operator.”
First Project
The benefits of the design were recognized and adopted by BPZ Energy for their new platform at the Corvina field offshore Peru. The tower is composed of four cylindrical cells and is connected to the seabed by a single suction pile which is integral to the hull structure. The tower and decks with the production equipment will be transported from the fabrication yard to Corvina on a submersible heavy lift ship. After upending, fixed and variable ballast will be pumped into the hull to provide stability for the platform.
The CX-15 shallow water tower is well on track for a summer 2012 installation and will be the first application of this design. The platform is designed for 12,200 barrels of oil per day, gas compression capacity of 12.8 million standard cubic feet per day and produced water handling and injection capacity of 3,500 barrels per day. A total of 24 drill slots will be available, some of which will be used for gas and water reinjection wells. The CX-15 platform will be located about one mile from the existing CX-11 Corvina platform, with both platforms interconnected via a series of subsea pipelines.
The JV completed the FEED scope in 2011 which led to detailed design for the buoyant tower. Fabrication is underway at Wison Offshore and Marine’s yard in Nantong, China. GMC are also providing project management and installation services for the CX-15 platform.
Jim Maher, COO of the JV, commented “We are pleased to be working with BPZ Energy on this important project which draws upon deepwater technology and applies it in the shallow water arena.”
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China top military paper warns of armed confrontation over seas
(Reuters) – China‘s top military newspaper warned the United States on Saturday that U.S.-Philippine military exercises have fanned risks of armed confrontation over the disputed South China Sea.
The commentary in China’s Liberation Army Daily falls short of a formal government statement, but marks the harshest high-level warning yet from Beijing about tensions with the Philippines over disputed seas where both countries have recently sent ships to assert their claims.
This week American and Filipino troops launched a fortnight of annual naval drills amid the stand-off between Beijing and Manila, who have accused each other of encroaching on sovereign seas near the Scarborough Shoal, west of a former U.S. navy base at Subic Bay.
The joint exercises are held in different seas around the Philippines; the leg that takes place in the South China Sea area starts on Monday.
“Anyone with clear eyes saw long ago that behind these drills is reflected a mentality that will lead the South China Sea issue down a fork in the road towards military confrontation and resolution through armed force,” said the commentary in the Chinese paper, which is the chief mouthpiece of the People’s Liberation Army.
“Through this kind of meddling and intervention, the United States will only stir up the entire South China Sea situation towards increasing chaos, and this will inevitably have a massive impact on regional peace and stability.”
Up to now, China has chided the Philippines over the dispute about the uninhabited shoal known in the Philippines as the Panatag Shoal and which China calls Huangyan, about 124 nautical miles off the main Philippine island of Luzon.
China has territorial disputes with the Philippines, Vietnam, Brunei, Malaysia and Taiwan in the South China Sea, which could be rich in oil and gas and is spanned by busy shipping lanes.
REGIONAL TENSIONS
Beijing has sought to resolve the disputes one-on-one but there is worry among its neighbors over what some see as growing Chinese assertiveness in staking claims over the seas and various islands, reefs and shoals.
In past patches of regional tension over disputed seas, hawkish Chinese military voices have also emerged, only to be later reined in by the government, and the same could be true this time.
Since late 2010, China has sought to cool tensions with the United States over regional disputes, trade and currency policies, human rights and other contentious issues. Especially with the ruling Chinese Party preoccupied with a leadership succession late in 2012, Beijing has stressed its hopes for steady relations throughout this year.
Nonetheless, experts have said that China remains wary of U.S. military intentions across the Asia-Pacific, especially in the wake of the Obama administration’s vows to “pivot” to the region, reinvigorating diplomatic and security ties with allies.
The Liberation Army Daily commentary echoed that wariness.
“The U.S. strategy of returning to the Asia-Pacific carries the implication of a shift in military focus, and there is no better strategic opening than China’s sovereignty disputes with the Philippines and other countries in the South China Sea,” said the newspaper.
“The United States’ intention of trying to draw more countries into stirring up the situation in the South China Sea is being brandished to the full,” it said.
(Editing by Sanjeev Miglani)
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Tokyo Is Planning To Piss Off China By Buying These Disputed Islands In The East China Sea
TOKYO (AP) — Tokyo‘s outspoken governor says the city has decided to buy a group of disputed islands in the East China Sea to bolster Japanese claims to the territory, a move that could elevate tensions with China.
Gov. Shintaro Ishihara said the city is close to reaching an agreement with the private Japanese owner of three of the four islands in the group known as Senkaku in Japanese and Diaoyu in Chinese.
The islands, surrounded by rich fishing grounds, are also claimed by China and Taiwan. They have been a frequent flash point in diplomatic relations between Japan and China.
A collision between a Chinese fishing boat and Japanese coast guard vessels in 2010 near the islands set off a serious diplomatic spat, with Beijing temporarily freezing trade and ministerial talks.
“Tokyo has decided to buy the Senkaku islands. Tokyo will protect the Senkakus,” Ishihara said in a speech Monday at the Heritage Foundation, a conservative think tank in Washington. “The Japanese are acquiring the islands to protect our own territory. Would anyone have a problem with that?”
Ishihara, a strong nationalist, said the idea is to block China from taking the islands from Japanese control, as the central government is reluctant to upset China.
He did not indicate how much the city would pay, but said the deal would be finalized while he is visiting the United States.
In Beijing, Liu Weimin, a spokesman for China’s Ministry of Foreign Affairs, reacted harshly to Ishihara’s comment and reiterated China’s claim over the islands.
“Any unilateral measure taken by Japan is illegal and invalid, and will not change the fact that those islands belong to China,” he said in a statement.
Tokyo city official Tatsuo Fujii said details of the deal could not be released immediately and further discussions would be held with Okinawa prefecture, which has jurisdiction over the islands, and other related authorities.
The government currently pays rent to the owners of the four islands in the Senkaku group so they won’t be sold to any questionable buyer. It pays 24.5 million yen ($304,000) a year to the owner of the three islands, which are unused. The fourth island is used by the U.S. military for drills.
Chief Cabinet Secretary Osamu Fujimura reiterated on Tuesday that Japan has sovereignty over the Senkaku islands and said the central government might purchase them.
Japan and China also have disputes over undersea gas deposits in the East China Sea and Japan’s wartime history.
Ishihara previously helped to erect a lighthouse on one of the Senkaku islands, which a group of nationalists later replaced with a larger one recorded on navigation charts.
Ishihara’s comments about the disputed islands are also seen as politically motivated to discredit Prime Minister Yoshihiko Noda‘s government, which is struggling to gain public support.
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Continents of the World
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