By Zachary Keck
David Bandurski, editor of China Media Project, recently translated an article that Sun Liping—a sociologist at Tsinghua University who served as President Xi Jinping’s dissertation advisor— has published harshly criticizing the Hu administration’s decade in power, and even comparing China under their administration to North Korea.
Sun begins the article by noting that when Hu first took over power in 2002 there was hope among Chinese that he would further open up the system, and a number of incidents in the earlier part of his tenure seemed to confirm he would.
“But then,” Sun continues, “without explanation, the new administration lowered its banners and muffled its drums. It studied the ways of North Korea. Control and stability preservation (维稳) become the salient priority, and this approach was relentless.”
In considering possible explanations for this crackdown, Sun comes to focus, interestingly enough, on the 2008 Beijing Olympics. According to Sun the preparation for the international sporting event marked the beginning “of the ascendance of the stability preservation regime in China.” As a result:
“In the 21st century, China’s two most obvious characteristics have been the inflation of power (权力膨胀) and the failure of power (权力溃败), and the way the two of these have woven together. The process of the strengthening of the government’s capacity to extract resources, which had already begun before, concentrated more and more money in the hands of the government [during this decade]. And he who has wealth speaks loudest.”
The rest of the article is available on China Media Project’s website here, and is well worth the read (as are Bandurski’s insights preceding the article).
The gist of what Sun goes on to argue is that after the Beijing Olympics the leadership began touting all the great things China was capable of, even as interest groups became more powerful, social inequality rose, and the government became “utterly helpless” of doing anything to rectify the situation. Instead, the Hu administration merely tried to preserve regime instability in the face of it. However, Sun contends, “Preservation of this sort, has preserved China right down into the gutter.”
Avian Flu Strain H7N9 Kills 2 in China
By J. Michael Cole
It was no April Fools’ Day. Taiwan on April 1 strengthened monitoring measures at its ports of entry after Chinese health authorities confirmed on March 31 that two Chinese had died after contracting a lesser-known type of H7N9 avian influenza (Bird flu) and another was in critical condition. Though there are no signs of an epidemic but the cases are a reminder that nontraditional threats, not ballistic missiles or fifth-generation aircraft, are most likely to negatively affect large numbers of people in this densely populated and highly mobile part of the world.
Two men from Shanghai, aged 87 and 27, died from H7N9 in early March within two weeks of falling ill, while in Chuzhou, Anhui Province, a 35-year-old female patient remains in critical condition after contracting the disease. Chinese health authorities have noted that those are the three first known cases of H7N9 infection worldwide.
According to the World Health Organization, which is closely monitoring the situation, there is no evidence that H7N9 can be transmitted from person to person. It adds that H7N9, about which little is known, is a low pathogenic strain of avian flu — a claim that would be supported by China’s National Health and Family Planning Commission, which said there were no signs of infection among the 88 people who had been closest to the patients in the past months.
Chinese authorities are trying to determine how the three individuals, who did not appear to have been in contact with one another, contracted the disease. The 87-year-old man died on March 4, while the 27-year-old died on March 10. The Shanghai Health Bureau said on April 1 that the two victims had a history of chronic illness, but did not provide specifics.
Later on Monday, the commission, which had yet to provide much in terms of specifics, said that two sons of one of the victims from Shanghai also suffered from acute pneumonia, though the source of the infection remained unknown.
Although some Internet users in China complained that the government had “gambled with people’s lives” by taking more than a month before reporting news of the cases, health authorities said it had needed time to confirm that the cases involved the new strain of the avian flu. Chinese scientists only confirmed on Friday that H7N9 was involved in all three cases.
The commission, meanwhile, said the female patient had a history of contact with poultry and that the 27-year-old victim was a butcher, suggesting transmission of the H7N9 subtype may occur from animals to humans. According to the U.S. Centers for Disease Control and Prevention (CDC), most H7 subtype viruses seen in wild birds and poultry globally are low pathogenic avian influenza. The CDC adds that while H7 virus infection in humans is uncommon, it has been documented in persons who have direct contact with infected birds, especially during outbreaks of H7 virus among poultry. Some experts have speculated that the deaths in China could be an indication that the H7N9 strain had morphed to become more lethal to humans.
The Shanghai Daily reported the same day that hospitals across the city had been ordered to monitor patients with respiratory illnesses. Hong Kong is also reported to have increased checks.
There is no vaccine for H7N9, though Taiwan’s Centers for Disease Control says the disease can be treated with Tamiflu.
Although there are no known cases in Taiwan, the island’s CDC stepped up precautionary inspections at all its ports of entry on Monday and intensified monitoring of passengers from China, Hong Kong and Macau.
Amid growing ties between the two sides, China has become Taiwan’s No. 1 source of tourism, with approximately 2.58 million arrivals in 2012, up from less than 1 million just three years earlier. Furthermore, as many as 1 million Taiwanese businesspeople are based in China, mostly in the Shanghai region, resulting in high demand for cross-strait flights.
The rapidly growing exchanges between the two countries, compounded by the liberalization of Taiwan’s laws on Chinese tourists and the launch of direct cross-strait flights in recent years, also provides an opportunity for disease to travel that did not exist — at least not to this extent — just a decade ago, when both China and Taiwan were among the countries affected by the Severe Acute Respiratory Syndrome (SARS) outbreak. The slow response by Chinese authorities at the time, partly due to initial attempts to conceal the scope of the outbreak, are believed to have been a factor in the virus’s ability to spread to other countries.
A total of 775 people died worldwide of SARS between November 2002 and July 2003, with 8,069 infections. Thirty-seven died in Taiwan, 349 in China and 299 in Hong Kong, WHO statistics show.
J. Michael Cole is a Taipei-based journalist who focuses on military issues in Northeast Asia and in the Taiwan Strait and is wrtier for The Diplomat's Flashpoints blog. He previously served as an intelligence officer at the Canadian Security Intelligence Service. You can follow him on Twitter: @jmichaelcole1.
Could This Be China’s Youth Movement?
By David Cohen
People are always looking for a youth movement in China. With an autocratic government, extreme levels of inequality, and a rising degree of gender mismatch that is making it harder to get married, contemporary China has many of the ingredients we associate with political uprisings like the Arab Spring.
Since 1989, international media have flirted with dozens of incipient "next Tiananmens" - some, like the rise of social media, have had major effects on Chinese society, while others, like Ai Weiwei and the "Jasmine Revolution," have proved to be little more than wishful thinking. To a great extent, China analysts have become jaded about disaffected youth stories.
But I want to argue that one of the latest of these, the rise of "diaosi" - or "loser" - culture on the Chinese internet, is interesting enough to deserve close attention from a political perspective. The popularity of this identity among people who do not seem like natural losers is a major challenge for Xi Jinping as he makes his current push for legitimacy on the strength of the "Chinese dream."
The slang term, which is less than two years old, emerged as an insult, occupying a space that should be familiar to Western web users as the close equivalent of "living in your mother's basement" - a shorthand for "you're brave enough in a web forum but who are you in real life?" The Chinese term, which literally means "pubic hair," calls to mind a young graduate working a dead-end job, with little prospect of saving enough to buy a house and a car - basic trappings of middle-class life that are widely seen as essential prerequisites to finding a girlfriend and marriage.
But the way the term has evolved in the past year is what makes it interesting. Like many insults, it was embraced by the people it was meant to dismiss - but diaosi has gone on to become an almost universal identity among Chinese web users. Just among my acquaintances, there are now (all self-described) female diaosi, diaosi working in finance, diaosi doing PhDs at China's top universities - and prestigious universities overseas. It has grown into a decidedly mainstream identity - and the diaosi novel has become a popular genre.
In fact, diaosi-ness has become important enough to people to generate concern about posers – enough so that netizens are creating very specific requirements that one must meet to qualify as a diaosi. There are also websites like Renren that give users "diaosi scores" and fierce debates about whether owning an iPhone makes you a fake diaosi. The fact that owning an iPhone can be both an embarrassment as well as a prized possession should lead us to rethink our assumptions about the materialism of the Chinese middle class.
The only constant about the use of the word "diaosi" is that it is the opposite of a pair of online slang terms that refer to privilege "gaofushuai" (tall, rich, and handsome) for men and "baifumei" (pale, rich, and beautiful) for women. Nobody calls themselves gaofushuai or baifumei. This opposition is the important thing about the rise of diaosi identity - implicit in it is the belief that the prosperity of the last 20 years has gone mostly to a small group of well-connected people.
What is also important is the widespread sense that only diaosi have access to the "authentic Chinese experience." Dispossessed youth have been around in China for a long time, it’s been some time since young people have been defining themselves as among the dispossessed as a matter of choice.
As we watch Xi Jinping trying to inspire the nation with talk of the Chinese Dream, we should also be watching the spread of diaosi identity. It is a view of Chinese society that says the Chinese Dream is for other people— at least as Xi and official China might define it. The Party's good luck has not run out yet, but the diaosi idea may make their audience that much tougher.
China and the BRICS: Unavoidable Hegemony?
By Zachary Keck
As China’s relative economic growth has continued apace, its dominance within BRICS has become increasingly entrenched. Almost regardless of its intentions, China’s size and national power make it the unavoidable hegemon of BRICS. Yet the other member states distrust of Beijing’s economic and strategic plans makes them unwilling to accord China the degree of influence within the grouping that its national power capabilities would suggest. Resolving this is as necessary as it is difficult.
China’s growing dominance within BRICS can be demonstrated in any number of ways. Most succinctly, China’s GDP is over 1.5 trillion dollars larger than the combined economic output of the other four BRICS members. Furthermore, the current trend is for the disparity to grow even wider. As Oxford Analytica, a global analysis and advisory firm, points out, China accounted for around 70 percent of the growth in the BRICS’ share of global economic output between 2000 and 2011.
China’s importance to the individual BRICS members is further demonstrative of this reality. To begin with, China is the largest single nation trading partner of Russia, Brazil, and South Africa, and, as of 2011, was India's largest import market and second largest trading partner. As China's consumption grows, so will its importance as a market for its BRICS counterparts.
By contrast, none of the other four BRICS is particular important to China’s trade in terms of value. According to the latest EU data, which is for 2011, the value of China’s trade with Malaysia was greater than its trade with any single member of BRICS, and Sino-South Korean trade was only slightly less than China’s entire intra-BRICS trade.
To be sure, not everything that is traded is of equal importance to the countries doing the trading. Crucially, China’s imports from Russia, Brazil, and South Africa are highly weighted towards energy and natural resources, which Beijing will be increasingly reliant on foreign sources for in the decades ahead.
Still, at least when it comes to energy, this will not give the other BRICS as much leverage over China as one might have thought only a half-decade or so ago. Because of the North American energy revolution and Iraq’s growing oil production, energy markets are likely to increasingly become buyer’s markets. This is especially the case for China, which—along with India to a much lesser degree— will be the one country looking to buy the quantity of energy that a country like Russia needs to sell. By contrast, at least in peacetime, China will, in principle, have a host of different options when it comes to energy suppliers. As a result Russia will need to continue selling its energy to China at least as much as China needs to continue buying it.
China’s dominance is equally pronounced in terms of outbound investment, the subject that concerned BRICS this week. Notably, whereas BRICS aimed to pool together their investment funds to create a rival to the Western-dominated World Bank, the truth of the matter is that China Development Bank (CDB) and other state institutions are by themselves rivals to the World Bank. In fact, between 2008 and 2010, China’s overseas loans outstripped World Bank lending by US$10 billion.
Beijing’s enormous capital outflows have a real tangible impact inside the other BRICS members. To cite just one example, a 2011 report by the China-Brazil Business Council (CBBC) found that China invested US$12.690 billion in Brazil in 2010, 99 percent of which came from state-owned enterprises and all but US$1.522 billion of which went to foreign companies (read: Chinese companies) operating inside Brazil. From this the CBBC concluded that China’s investment in Brazil marked “the consolidation of the Chinese presence in Brazil through foreign direct investment.”
It is therefore not surprising that the BRICS sought to constrain China’s ability to contribute to the joint effort to construct alternatives to the Western-dominated World Bank and International Monetary Fund. Still, this underscores the uncomfortable reality that even as remaking the current international economic order is the glue holding BRICS together, non-Chinese BRICS members are at pains to avoid replacing the current order with a Chinese-dominated one. Given the power disparity between them and China, this task is difficult to say the least.
Wednesday Round Up – The Web’s Best on China
By Harry Kazianis
Every Wednesday, The Diplomat’s editorial team gazes out across the web to find our readers the best material involving all things China. From Beijing’s relations with its neighbors, its growing military might, and a rapidly growing and evolving economy, to amazing arts and culture, we present a diverse grouping of articles for your reading pleasure.
Here is our top five this Wednesday. Have we missed something? Want to share an important article with other readers? Please submit your links in the comment box below!
1. China Sentences 20 for Separatist Acts in Restive Region (The New York Times) - "China cracks down on what it calls separatist activity in a region that has been a hotbed of ethnic tensions."
2. First pics: China's J-20 Stealth Fighter Armed With a Missile (Foreign Policy) – “Here are what might be the first photos and videos of China's J-20 stealth fighter equipped with an air-to-air missile.”
3. Fat Profits Over but Sunny Days Still for China Banks (CNBC) - "This week two of China's biggest banks reported their worst annual earnings growth since going public, but analysts said the sector is far from seeing the end of its heydays."
4. In Inaugural Trip, China's President Pushes Trade Ties With Africa (CNN) – “Chinese President Xi Jinping’s inaugural trip, which has taken him to Russia, Tanzania and South Africa before a final stop in the Republic of the Congo, has been examined for what it says about his aspirations for a multipolar world and the potential to develop counterweights to influence of the U.S. and Europe.
5. Nicolas Cage Hired by China’s BAIC Motor to Promote Senova Cars (Bloomberg) - "Actor Nicolas Cage has signed on as brand ambassador for Chinese automaker BAIC Motor Corp., joining Brad Pitt and Barcelona soccer star Lionel Messi in promoting automobiles in the world’s largest vehicle market."
China Purchasing Russian Jets and Subs?
By Harry Kazianis
Yesterday various news outlets reported Russia and China had seemingly concluded a large defense deal with important implications for the Asia-Pacific. If accurate, the deal will be the largest purchases by China of Russian military equipment in recent memory – and some of the most technologically advanced. Such a deal has been rumored for several months.
As CCTV explains:
“According to the contract, the two countries will jointly produce four Lada Class air-independent propulsion submarines which will then be sold to China. China will also buy 24 Su-35 jet fighters from Russia. Experts say that the Su-35 will reduce the pressure on China’s air-defense before China’s stealth fighter is put into use.
This is the first time China has bought important military equipment from Russia in ten years. The Defense Ministries of both countries have said that military cooperation between the two countries is of great significance in maintaining regional stability.”
Such a deal would be a major boon for China, giving the PLA access to advanced fighter jet engines as well as possible advanced Air Independent Propulsion (AIP) technology for potential future use in domestic submarine designs. Beyond gaining access to advanced technology for later use, such weapons could be of deterrent value in ongoing disputes with neighbors in the East and South China Seas.
However, according to Defense News—as well as Russian media outlets—the deal may have never taken in the first place. The Defense News report cites Vasiliy Kashin, a military specialist from the Moscow-based Centre for Analysis of Strategies and Technologies, as saying that “The Kremlin is officially denying even discussing arms trade during Xi’s visit.” Defense News later quotes the same source as saying that, “In Russia-China relations, specific arms trade contracts are almost never discussed by the top leaders, just the general approaches.”
The report goes on to note that another Russian source explained there was “strong reservations about going forward on the memorandum of understanding signed in December to explore the sale of the twin-engine Su-35s and Amur submarines to China.”
Such hesitation coming Russia would be completely understandable. Russia has in the past sold advanced SU-27 fighter jets to China – only to see such jets reverse engineered and produced en masse as the J-11 fighter. Also, the J-15 fighter that China is currently being tested on the PLAN’s new aircraft carrier, the Liaoning, is rumored to have been crafted from a SU-33 prototype.
Russia must also consider the long term ramifications of such a deal. While Russia and China have cordial relations at the moment, selling some of your most advanced military equipment to a possible future geostrategic competitor is always a risky proposition.
Given China’s history Moscow is likely concerned that such technology could be reproduced and resold at lower prices, undercutting Russia’s own position in the arms export business. This is especially to be on Moscow’s mind given recent reports that China’s position in the global arms business has been steadily rising.
While Russia may gain a lucrative arms sale in the short term, the long term ramifications must weigh heavily in Moscow’s strategic calculus. Could China have floated the idea of an agreement to put pressure on Russia? It’s possible. Or maybe Moscow just got cold feet.
Harry Kazianis serves as editor for The Diplomat.
One Thing China and the USSR DON’T Have in Common
By Harry Kazianis
As I recovered from a rough bout of jetlag over the weekend, I came across an interesting piece by William Wan over at the Washington Post. The article explores China’s study of the collapse of the Soviet Union. The author points out that, “the shadow of the U.S.S.R. still hangs over many parts of Chinese society. What is considered bygone Cold War history by much of the rest of the world, even by many in Russia, lives on in China.” Wan goes on to note “The obsession is fueled by the fear that, with a few wrong steps, China’s Communist Party would face a similar fate.”
Comparisons between the Soviet Union and China are certainly all the rage these days. The Diplomat has covered this subject several times, with an excellent piece by Center for National Interest’s A. Greer Miesels and another by China Power Blogger David Cohen – well worth your time.
While there are many areas scholars can try and draw comparisons between the Communist Party of the Soviet Union (CPSU) and the CCP—such as political power, economic reform, technological innovation, and foreign affairs— the roll that massive military spending played in the Soviet Union’s collapse is one area that China should study.
Although figures from different sources vary dramatically (with one estimate as high as 40% of the budget and an amazing 15-20% of GDP by the early 1980s), the Soviet Union spent tremendous sums of rubbles on its military. From MIRV’d missiles and advanced nuclear submarines, to the latest jet fighters, Moscow spent lavishly on the most advanced weapon systems to keep pace in a global struggle for dominance -- the classic guns or butter example. As America built companies like IBM, Apple and Microsoft the CPSU struggled to stock its shelves with basic necessities.
So what does China spend on its defense? In a recent piece, Andrew Erickson he observes that:
“Even during the past decade of rapid increases to defense spending, the official defense budget has held steady at roughly 1.3-1.5 percent of GDP—when calculated based on high-end foreign estimates of actual total defense spending during the same period the figure still falls between 2 and 3 percent of GDP.”
For all the talk of new aircraft carriers, advanced missiles, and a blue-water navy, China’s military modernization is nowhere near Soviet levels or anywhere near where it could harm its economy.
The trick now will be for China to keep its defense expenditures in line with the size of its economy. This may be a challenge in the coming years with its territorial disputes in the East and South China Seas, as well as competition with the U.S. becoming more intense, and its need to protect its growing investments in the Middle East and Africa. Keeping up with these newfound challenges will be particularly burdensome should economic growth slow.
Thankfully for Beijing, the likelihood of some sort of global Cold War with the United States developing remains remote, regardless of hyperbolic rhetoric on both sides. Yet, as China’s power grows, so will its interests in other parts of the world, and so will the need to project military power to protect such interests. As Fareed Zakaria wrote about America’s ascent in the late 19th century, “With greater wealth, the country could build a military and diplomatic apparatus capable of fulfilling its aims abroad; but its very aims, its perception of its needs and goals, tended to expand with rising resources. As European statesmen raised under the great-power system understood so clearly, capabilities shape intentions.”
Can China buck this historical trend by striking an equitable balance between its international goals that demand greater defense spending, and domestic challenges such as caring for an aging population and rebalancing the economy from one that relies on exports to one based on domestic consumption?
Harry Kazianis serves as editor of The Diplomat.
As Xi Jinping Visits Africa: What are China’s Intentions?
By Elleka Watts
On the second leg of his first overseas trip as China’s head of state, Xi Jinping is visiting a number of destinations in Africa, including Tanzania, the Republic of Congo, and South Africa where he will attend the 5th BRICS Leaders Summit in Durban. Xi’s trip reflects the growing importance China places on Africa in its foreign and economic policies; last year, Wei Jianguo, a former Commerce Minister, forecast that Africa would surpass the U.S. and EU as China’s largest trading partner in three to five years.
Among Western audiences especially, China’s involvement in Africa is often viewed through the larger prism of U.S.-Sino relations, as both sides compete for influence in the resource-rich continent. In this context, Xi Jinping’s trip will be watched closely by U.S. policymakers who are increasingly wary of China’s growing clout in Africa. Indeed, although she stopped short of singling China out by name, Hillary Clinton made two major trips to Africa during her time as Secretary of State, during which she warned African leaders to be wary of a “new colonialism.”
"We saw that during colonial times, it is easy to come in, take out natural resources, pay off leaders and leave. And when you leave, you don't leave much behind for the people who are there. We don't want to see a new colonialism in Africa,” Clinton said in 2011.
Although Clinton and U.S. officials are obviously intent on advancing U.S. national interests, many observers outside of government paint China’s African engagement in a similarly negative light. In order to make their case, many pundits have relied on gross exaggerations or complete falsehoods. Sadly, all too often these go unchallenged and feed a false narrative about Chinese-African relations. Five such myths are worth addressing:
Myth #1: China’s involvement in Africa is a new phenomenon.
False. China is Africa’s largest trading partner and has actually been engaged in the continent since the founding of the People’s Republic of China in 1949, and became more active starting in the 1960s. For example, the PRC has been a major contributor to Africa’s economic development through providing aid, debt relief, grants, and concessional low-interest loans, and especially through business enterprises such as capital investment, joint ventures, commercial loans, exports credits, and by developing special economic zones to spur economic growth. While Chinese investment in Africa during the Mao era was aimed primarily at supporting left-wing militant groups, since the time of Deng Xiaoping’s “reform and opening up” China’s investment in Africa has become more pragmatic and mutually beneficial.
Myth #2: Chinese investment and foreign aid in Africa is only given to nondemocratic states.
Not true. Western media sources cite examples of China providing aid to unpopular regimes like those in Zimbabwe, Angola, and Nigeria to show how the nation is supporting corrupt regimes with terrible track records on human rights. Additionally, many analysts argue that China’s overseas development assistance is given only to resource-rich countries. In fact, as scholar Deborah Brautigam points out, the better indicator of which countries receive Chinese foreign aid is the recipient nation’s position on Taiwan. According to Brautigam, among those countries that support the PRC’s “one-China” policy, “grants and zero-interest loans are distributed fairly evenly around the continent, while concessional loans fit a country’s ability to pay.” In other words, China provides aid and investment to both democratic and non-democratic regimes alike.
Furthermore, as Brautigam warns: “to see ‘the West’ as refusing to engage with rogue regimes, while ‘China’ actively seeks them out, misses a big part of the picture,” which is China can actually be a positive developing force in Africa. Chinese foreign aid conditionality is diplomatically (and somewhat economically) based; it does not have political conditionality at all, for better or worse.
Myth #3: The Chinese government is heavily involved in planning Africa’s economic zones
Greatly exaggerated. The Chinese government has expressively endorsed developing African states through the creation of economic, trade and cooperation zones (ETCZs) in Africa, similar to China’s own use of Special Economic Zones (SEZs) domestically.
However, Chinese investors and companies work together with African leaders to develop specially tailored zones without a lot of Chinese government involvement in how the zones are designed or operated. While some of the Chinese companies are technically state-owned, the companies still enjoy a high degree of autonomy. Eight official government endorsed zones have been built thus far (although some have not begun operating yet). Private Chinese enterprises also operate their own.
Since these zones are still new, it is hard to determine whether or not they are mutually beneficial to China and Africa, and a lot of the negative speculation on Chinese investment in Africa stems from this uncertainty. Although some of these zones are joint ventures, Chinese companies have also come under criticism for owning 100 percent of the shares in some of the ETCZs. This ignores the fact that prior experience has shown that many times the African stakeholders often inhibit the success of these kinds of projects due to rampant corruption and mismanagement. Thus, Chinese companies exercising ownership of the STCZs can actually be to the benefit of the ordinary Africans involved.
Xi Jinping’s Visit to Russia
By Harry Kazianis
With China’s new President Xi Jinping visiting Russia for his first state visit, the world is watching. What agreements could be signed? What new partnerships may be formed?
Both states have a clear interest in creating stronger ties. From area such as defense technology, energy, and matters of national security and foreign policy, Moscow and Beijing in many respects have similar interests.
Can such ties stand the test of time?
As China’s economy grows ever larger and its military becomes even more powerful, will Russia feel pressure to change course?
The Diplomat presents some of the more unique photos from the talks in Moscow. Please let us know your thoughts on this important summit.
Can Russia and China’s partnership endure?
Ties that Bind: Can China-Russia Relations Endure?
By Zachary Keck
The long-running consensus in the West and elsewhere has been that China and Russia are destined to clash. According to this narrative, while America’s post-Cold War primacy pushed the two sides together, geography and China’s growing power ensure Beijing and Moscow will be strategic competitors over the long-term.
There’s certainly something to this argument; at the very least these factors ensure mistrust will be a permanent feature of the bilateral relationship. That being said, this ignores the potential areas of cooperation between Russia and China, and fails to tell us how temporary the Sino-Russian relationship truly is.
If President Xi Jinping’s trip to Russia is any indication, the relationship has greater staying power than analysts previously expected. Not only is it symbolically important that Xi has made Russia the destination of his maiden voyage as China’s top leader, but he clearly is placing a lot of importance on the visit. China’s state media have spent the past week covering the trip and Sino-Russian ties in excruciating detail, and Xi has reportedly been brushing up on his rudimentary Russian language skills and even memorizing Russian poetry in order to make a strong impression on his hosts. Given Moscow’s strong desire to be perceived as a great power, Xi likely had Putin and company at “my first overseas trip.”
While Xi’s trip may be a one time event, the growing Sino-Russian energy relationship is premised on long-term cooperation. Just hours after Xi's arrival in Russia on Friday, the head of Russian energy giant Rosneft announced it had reached an "agreement in principle" to more than triple its annual oil exports to China, from 15 million tonnes last year to 45-50 million tonnes at an unspecified future date (likely around 2018). This will make China the largest consumer of Russian oil. As part of the deal, Rosneft and China National Petroleum Corporation (CNPC) will also jointly develop 3 offshore blocks of oil near the Barents Sea and 8 onshore deposits in East Siberia.
Furthermore, Gazprom expects to finally sign a deal with Beijing as early as the end of this month, in which it would export 38 billion cubic meters of gas to China annually. Gazprom is also reportedly pushing for a loan as part of this deal to construct a pipeline to deliver gas to China via Siberia, much like the U.S. $25 billion loan China provided Rosneft with in 2009 to construct the East Siberia-Pacific Ocean oil pipeline.
There is a significant convergence of interest between the two sides on energy cooperation. British Petroleum forecasts that over half of the global liquids demand growth through 2030 will come from China, at which point Beijing’s 46 Billion Cubic Feet (bcf/d) of daily gas consumption will equal the entire EU’s gas consumption in 2010. China is already rivaling the U.S. in terms of oil imports, and BP expects China and India to account for 94 percent of net oil demand growth through 2030. According to the Energy Information Administration (EIA), by 2035 will be China importing 75 percent of the oil it consumes.
All of this poses a number of dilemmas for Chinese policymakers, given the U.S. Navy’s control over global sea lanes. Despite over a decade of double digit increases in its military budget, China’s growing reliance on foreign energy far outpaces its ability to displace U.S. and allied naval forces. As my colleague Rory Medcalf recently pointed out, none of this has gone unnoticed in U.S. defense circles.
Russia’s oil and gas reserves are almost certainly to be the largest sources of energy that have overland routes to China, and are therefore immune to any sea-based disruptions. Furthermore, Russia’s interest in penetrating China’s energy markets is difficult to overstate. The Russian economy remains heavily reliant on energy exports, which doesn’t portend well for Moscow given the global energy revolution currently underway. Indeed, should the U.S. and EU ink a free trade agreement, Russia’s stranglehold over the EU’s energy markets could come to an end. At that point Moscow’s continued economic viability would fall to Asian nations, principally China and India.
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