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Spengler

The Winner in Ukraine is China

May 16th, 2014 - 3:11 am

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I’ve been predicting that Russia would not send its army into eastern Ukraine, but stand back and let the country dissolve into chaos. The crisis erupted because the country is dead flat broke, after nearly $200 billion in aid over the past twenty years, most of it stolen. All the huffing and puffing about a new Hitler seizing a new Sudetenland in preparation for a Drang nach Westen is beside the point. The center ring of this bathetic circus has shifted to Beijing, where Vladimir Putin is negotiating the terms of a new Sino-Russian deal. This isn’t a fusion of the two countries by any means, but rather a cautious, self-interested alignment of interests. The Indian journalist M.K. Bhadrakumar, a former ambassador to Turkey and several Central Asian Republics, has a useful assessment on his blog today. Bhadrakumar is a sympathetic and canny observer of Russian policy.

The highlight of the two-day state visit by Russian President Vladimir Putin to China on Tuesday is probably going to be the signing of the long-awaited 30-year mega gas deal. The Russian media have been speculating such a strong possibility.  The Chinese official remarks, however, remain cautiously optimistic and flag that the “main difference”, namely, over the price of gas, “still lingers.” To be sure, it is a political call now for the Kremlin.

Russia took a tough stance in the recent years insisting that the price of gas should be linked to the price of oil, which is the formula it maintains in dealings with Europe. With the passage of time, China’s negotiating stance (which rejected such a linkage), has strengthened.

Time worked in China’s favor. Beijing has been in no tearing hurry to conclude the deal while it kept lining up LNG supplies from other sources — Qatar and Australia — and kept up the momentum of overseas upstream investments, including in Canada, as well as boosting further supplies from Turkmenistan and other Central Asian countries.

China is also estimated to have the world’s largest source of shale gas. On the contrary, Russia’s negotiating hand has weakened. A ‘Look East’ strategy for energy exports is increasingly a matter of compulsion rather than of choice, as the United States pushes for Europe’s diversification of energy imports to reduce high dependence on Russia.

At any rate, Europe’s energy needs have come down and is preparing for an influx of North American feedstock. Suffice to say, for a variety of factors, the gas deal will now have to be struck on China’s terms. The Russian negotiators are practically left with no option but to compromise, even as the Russian economy moves into recession and increased income from the gas sale to China is becoming vital for Moscow.

The Russia-China natural gas deal is in many ways symptomatic of the true character of the two countries’ so-called bilateral “comprehensive strategic partnership of coordination.” Prima facie, the deal may create an impression of an emergent alliance between the two countries suggestive of a fundamental shift in global power balance.

But that will be a misperception. The painful birth pangs of the gas deal alone testify to a pragmatic partnership based on cool calculations of mutual benefit. The two countries “coordinate” selectively on international issues but have a long way to become alliance partners.

He concludes, “Essentially, an unbalanced relationship is moving progressively in China’s favor by the day. For Russia, it is going to be an entirely new experience, historically speaking, to settle for the role of a junior partner in relations with China.”

American policy–Administration as well as opposition–isn’t even wrong, as I have been warning for weeks. It is simply irrelevant. We aren’t looking at the whole chessboard. The German media signaled in March that sanctions against Russia will drive Moscow and Beijing closer together, and that is precisely what has happened. We indulged in a frenzy of impotent, self-consoling posturing against the nasty aggressive Russians, and succeeded only in toppling a pillar of Cold War diplomacy. We set out to propagate democracy in Eastern Europe, and helped to push Putin’s popularity rating at home above 80%. In the entire sorry history of US diplomacy, I can think of nothing that more resembles an own goal. Nice going, guys. Putin isn’t a genius. We are complete idiots.

We have urgent national security needs, but we don’t talk about them. Where is the sense of urgency, the Sputnik moment, over the fact that America depends on Russian rocket engines to launch its satellites? Where is the outcry over China’s ability to sink American aircraft carriers hundreds of miles from its shores? Where is the concern about Russia’s sale to China of its S400 air defense system (not the older S300 that Iran and Syria have tried to acquire)? The clock is ticking. It’s later than you think.

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image illustration via shutterstock /  valdis torms

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Top Rated Comments   
I agree. The folks in power here now just aren't able to conduct sophisticated power based forigen policy. They are not up to it. We just have to wait till the present Administration leaves and hope a stronger one arrives. Look at Benghazi: how stupid could they be; just admit we were attacked by terrorists, go after them, and move on. Wasn't the first attack, won't be the last. Their resort to a ridicilous talking point blaming the video for a coordinated attack was simply pathetic, and reveals their weakness.
17 weeks ago
17 weeks ago Link To Comment
While the serious adults are at the bar making deals for essential things like oil and gas, we are swapping baseball cards and Pez dispensers over at the kids table. I know, let's cut a deal with Spain for windmills and Don Quixote statues. Then we can see which alliance works out best over the next 30 years.
17 weeks ago
17 weeks ago Link To Comment
My dad was a rocket scientist until about the early 70's, when it was decided no more rockets were needed. So he got laid off, and went into programming. I think the Russian rocket scientists got about twenty years more employment. We can't have rockets because we need the money for diversity.
17 weeks ago
17 weeks ago Link To Comment
All Comments   (29)
All Comments   (29)
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By stealing Ukraine's gas fields, Putin has stolen the future of every young Ukrainian.
16 weeks ago
16 weeks ago Link To Comment
Edit: I meant that the Russians can go no further west.
16 weeks ago
16 weeks ago Link To Comment
There will not be a Sputnik moment because Sputnik lead to basic research and Neal Armstrong placing the USSR's Flag next to the American Flag, on the moon-can you imagine the horse trading! This leads to rearmament and war. Keeping Japan involves flattening North Korea. For the rest we seem to be falling back to Australia, and the Philippines. Naturally, confirming the losses is someone else's job, after the Boomers have retired. Chinese nationalizations are the natural yang to the yin of building up India but also inevitable within any communist system. The Nixon-Reagan power play worked so well that China displaced Russia. The Obama "Asian Pivot" was nothing more than a PR exercise and ended when everyone was going to have to play hardball with the Chinese.

The European mess consists of a dying EU around a dead Franco-German partnership. German Dollar Diplomacy reached it's Pyrrhic victory, like Napoleon at Moscow, with Maastricht and the Euro. The EU cannot even absorb Eastern Poland (Western Ukraine); Pontus' grain is still essential to contain Persia.Vladimir Putin's Dutchy of Moscow (my name for the 200 mile radius around Moscow, where 90% of all FDI actually goes) can go no further east; not even into Eastern Ukraine, not even with Chinese money . Both fear retreat because they fear implosion, but implosion is inevitable.

Der Spiegel's Get Out of the Middle East Free Card can only be played by China, or Germany, if the Russian system becomes an honest broker and the Russian economy develops a case of Swiss efficiency. That will not happen.
16 weeks ago
16 weeks ago Link To Comment
Where is the sense of urgency, the Sputnik moment, over the fact that America depends on Russian rocket engines to launch its satellites?
.........................
I think this is a beautiful Kodak moment for Elon Musk and SpaceX's Dragon and Falcon 9.

Where is the outcry over China’s ability to sink American aircraft carriers hundreds of miles from its shores?

Likely the Japanese and south koreans already have short range ship killer missles. Whenever the phillipines singapore viet nam & malaysia buy them, the Chinese navy will have no security at all outside 12 miles from their shorelines. They'll basically be in the same position as the germans in WWI & WWII who were boxed in by the north sea.

The first war looks to be with North Viet Nam--which win or lose --willl work against the interests of China..(Key question: did the north vietnamese army bloody the Chinese army before the Chinese army withdrew from North Vietnam in 1979 .)

China is making themselves an enemy of all their main trading partners except Russia. They also look to be hurrying up their military schedule as the tempo of military events seems to be accelerating.
17 weeks ago
17 weeks ago Link To Comment
I'm not convinced that China desires a war ... I think they desire to dominate the Western Pacific and the East Asian nations by building up their military and acting aggressively without necessarily ever firing a shot. Much as Putin is doing in eastern Europe and the Ukraine. After all, a real shooting war in East Asia could easily destroy the Chinese economy for decades. Too many people with lots of power in China would lose too much money for that to be a desired outcome.

Also worthy of note is that the Chinese are in a much more tenuous economic and defense position than are the Russians. They are literally surrounded on the north (Russia), West (the Muslim "Stans"). Southwest (India), South (SE Asian nations and the NORKs), and SE (Japan and SOKO) by centuries-long competitors and/or outright military enemies. None of these nations (except the NORKs) are friendly to the Chinese, including the Russians (who are only making pro forma attempts to improve relations, but only as a counter to their worsening relations with the West).

Only one of their neighbors is an "ally", but they're not so much an ally as they are a dysfunctional ward - that would be the NORKs. Many of their neighbors are nuclear-equipped and/or mutually defended via treaty by the USA, and all have strong military forces that in the aggregate are many times stronger than the Chinese Army and Navy will ever be.

So it is likely that much of what China is doing today is bluster and attempted intimidation, not a prelude to a shooting war. And it is important to recognize also that Asia is not like Europe geopolitically or culturally or militarily or economically. The Asian nations are not spent forces, weak-willed, and pusilanimous nor economically dependent upon the Chinese as the Europeans are dependent upon the Russian bear.
17 weeks ago
17 weeks ago Link To Comment
Not sure who the winner is. Short term, Putin wins (but not necessarily Russia). Longer term, Europe is certainly going to be more inclined to find other sources of oil and gas than Russia.

China really doesn't need Russian gas that much, given their own shale gas reserves. So it's not really clear they're the "real" winner either.

The losers are much easier to pinpoint - Ukraine, Obama, and HRC. But since Obama is such a short term player in this, it really doesnt matter how he comes out smelling. HRC, however, must add her ridiculous "Russian reset" to the long list of failures during her only real job in life (being a Senator doesn't count as a real job, where a "real job" is a job in which the incumbent has to produce promised outputs while being only 1 of 100 equals).
17 weeks ago
17 weeks ago Link To Comment
Getting weary of Americans complaining about how the Admin is unprepared, incompetent, etc. Twice-elected, Hussein Obama represents the will of the American people (and if there was a lot of voter fraud, accepting it is also 'will'). An unvetted, sealed-past President that lacks the basic markers of patriotism that should be required for a national leader.
17 weeks ago
17 weeks ago Link To Comment
"America depends on Russian rocket engines to launch its satellites"

US doesn't depend on Russia to launch our satellites. which would be a national security disaster, only our astronauts, which is embarrassing and annoying. The USAF launches unmanned space vehicles w/ Boeing and Lockheed which is a topic of a lawsuit from SpaceX Corp.
17 weeks ago
17 weeks ago Link To Comment
The _rockets_ are Boeing and Lockheed. But the _engines_ of these rockets are Russian-made.
17 weeks ago
17 weeks ago Link To Comment
"We aren't looking at the whole chessboard."
-------------------------------------------------------

And we have a president and administration that can't even figure out how to play checkers.

17 weeks ago
17 weeks ago Link To Comment
Paleo - Obama isn't even playing anymore, or even going through the motions. His full time job now is to try and mitigate the effects of the trip to the woodshed that his party is about to get come November.
17 weeks ago
17 weeks ago Link To Comment
Not looking at the whole chessboard?? I've found that most conservatives have no interest in examining the whole chessboard. (The MSM, is, as usual, worse. Nope. FOX and Rush, et al, aren't any better.)

What I've found is that conservatives are swallowing the MSM and White house Kool-Aid...and regurgitating it as if they'd thought it up for themselves.

17 weeks ago
17 weeks ago Link To Comment
That was, mostly, an "unhelpful" comment. It criticized, but only using vague generalities. It offered neither suggestions nor details.

As it happens, I don't have a television. Hence I watch not MSM (nor listen to it nor, for the most part, read it). All I know though, is that as bad as "our" conservatives might be, they are at least *not* Democrats. They are at least plotting to overthrow as many Democrats as possible so that, maybe, just maybe, we can at least handcuff this very dangerous president for the remainder of his term come November.

Why don't we all put our heads together to try to figure out how to obtain this goal?
17 weeks ago
17 weeks ago Link To Comment
The guy's a troll from Hot Air. Ignore it.
17 weeks ago
17 weeks ago Link To Comment
With our billions on the planet, it's going to be a race to which countries start to lose access to energy. They will of course be the weak nations. A canny nation with a united policy would use all external sources it could while hoarding its own - unexploited - in reserve.

Those countries will hold the highest cards. They will also be the targets of greatest influx of people fleeing collapsing tech and social structures in the weakest countries, which will go back to the horse and buggy. Those populations will be reduced by the hard realities of wood and charcoal.

China and Russia look to be holding the top hands here, as they are immune to the political correctness that would let them be overwhelmed by failure from the Third World.

Europe and America will slowly be turned into Third World nations - the Golden Geese too few and their treasure all gone to sustain failure.
17 weeks ago
17 weeks ago Link To Comment
A country like Brazil is ahead of the curve by using ethanol for its cars and producing electricity with dams, but how many countries have empty land or rivers to do that?
17 weeks ago
17 weeks ago Link To Comment
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