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China moves toward the top

8.25.2005

Keeping with the recent obsession of this blogger and the activity of Chinese oil interests, I am again moved to direct attention to this report from the Asia Times on the current moves afoot for CNPC to purchase petroKazakhstan.
The world has gone
China mad lately in a manner reminiscent of the time we were convinced of imminent Martian invasion. I am aware that some may grow tiresome of endless talk of China, oil and US Deficits but if anything looks set to rock the global status quo in the coming years its not Live 8. These are issues of enormous significance to all of us. The moves into Kazakhstan by the Chinese player looks set to secure in the region of 500 Million barrels of oil. Consider that it is not only the oil they look set to control but also a refinery. In the current market climate, refinery capacity is the constant thorn in the side of oil traders.
Considering the large volume of oil in reserves of PK, this comment in the piece is slightly disconcerting;
"As for buying PetroKazakhstan, according to Martin Molyneaux, managing director of Institutional Research for FirstEnergy Capital Corp, 'For China, this deal is about resources. It's material. But it's not a solution to
China's growing oil demand. PetroKazakhstan represents maybe 30% of one year's demand growth in China if it keeps growing [at its current rate]. So the Chinese would need one PetroKazakhstan every four months to satisfy demand [growth]. Still, it's a good and a fairly large purchase for them.'"

The new beast on the block has a large appetite, potentially much larger than that very uncomfortable American consumer. The deal is not set in stone yet, like the UNOCAL deal there are competitors, the bad news for US interests is that this competitor is that other sleeping tiger, India.
To see a battle shaping, up in a dictatorship, between
China and India for oil rights currently held by a Canadian company seems to be a sneak peak at the multi-polar future we are moving toward. The article touts possibilities for cooperation between the Asian players over the rights and oil fields, getting into Kazakhstan is more important than the current assets of PK alone.
The readiness of these states to get their hands dirty is nothing new, as I outlined recently the tactic of empire building is to make unpleasant friends to get your own way. Popular democracies don’t choose to be dominated by external powers.
Yet in furthering their interest
China is also playing a different tactic to that it recently attempted to pull with Venezuela. The route from Kazakhstan to China is overland. If the deal is to succeed, pipelines connecting central Asia to China and India will become the talking point.
In 'Hegemony or Survival', Chomsky (The excellent WikiBiog) pointed to the extension of the great game into
Central Asia. The difference here is that China could get oil connected directly to its state overland and through pipelines. It didn’t have to navigate waters controlled de facto by the US Navy patrols and thus not expose its oil assets to attack in the event of resource wars etc. This prospect is a direct challenge to US hegemony over oil assets and their delivery from the current majors of the Gulf area. China is investing a great deal of energy in befriending regional players. This is not simply for popularity.
Orwell's 1984 showed the danger of a tyranny who learned from prior tyranny's mistakes and was self-aware. If
China shows such characteristics in Central Asia learning from prior and imperially necessary US intervention in Central and South America, there could be trouble.
The point is that the purchase of PK by a Chinese or an Indian company holds great strategic competition to the
US. Using different forms of regional influence and exploiting land access to oil rich regions of the world (a privilege the US is running short on), the Chinese are moving into the driving seat in the rising battle for control of the next great oil reserves. The inevitable resolution of conflicting interests may be messy.
We are watching in slow motion the emergence of another power to challenge the current incumbent. However the whole concept of super power has led us down a blind alley. The leadership of the
US got us nowhere, simply because objective ideology takes little or no account for human difference. The prospect of a challenge to US supremacy, whether from 'fellow travellers' in the pseudo communist china or the 'young pretenders' in neo-capitalist India, fills me with dread at the prospect of re-enforcing the concept of global leadership. Top down authoritarian structures achieve little for the majority of us all. I am hoping that in the slight gap in timing between where we are now and where we might go, sense will prevail.
We require superpowers to secure the current system. Well maybe current systems are wrong and super-powers are superfluous. In challenging the
US, China is on a collision course with major world players, Banks, Corporations, political players and the West. Taiwan will be first to suffer and on it shall go. Elevating these entities to a status of control over human existence is folly in the extreme, humanity is not in fealty to these interests nor any other.
I will continue to be obsessed with this geo-political chess taking place between the two. In doing so I am not hoping for a winner or a loser. I am seeking to find a system where we don’t need a super-power.
RR

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