StrategyUnit

Quick Post: Update on “Getting India Right : Recreating the Anglosphere”
The Economist Writes on US-India relations

The StrategyUnit has recently posted several articles relating to India, with the strongest being “Getting India Right : Recreating the Anglosphere“, where it is declared:

“There has been discussion that just as Great Britain gracefully passed its world power status to the United States, the United States must look to do the same with India or else face decline in the face of a raising China.”

Now the Economist (Feb 25), ahead of Bush’s March visit to India, leads with two articles highlighting the Bush Administration’s approach with India. The second article, “The Great India Hope Trick“, goes through the three major topics: 1) the difficulty surrounding the Bush Administration’s nuclear technology deal with India; and 2) the American temptation to see India as part of an anti-China axis partner; 3) while India needs and wants to be seen as an equal in any partnership with the US.
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Summary
Many commentators have discussed the possibility of the Six-Party Talks on North Korea - which consist of China, Japan, US, Russia and the two Koreas - as the future basis for a security forum for Northeast Asia. East Asia is an important and dynamic region with growing economies and equally growing security needs, yet formal mechanism exist for communication and dialogue among the major players.

While the need for a security forum is apparent to all players involved, the specific issue that should help bring a security forum into fruitarian is Energy Security. The need for energy security coordination in a region highly dependent on imported oil is well overdue.

Indeed, even in the OSCE, the current chairman has called for a conference for all OSCE members to discuss the need for better coordination on energy security matters. It is time for the even more imported energy dependent nations of Asia to do the same and much more.
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Today’s Quick Links
1. Hamas: Winning the Candidates, not Votes?

Via Chief Wiggum and Coming Anarchy, comes this interesting story:

A close look at the final results of last month’s Palestinian election shows that the apparent landslide that gave Hamas 74 of the 132 seats in the Palestinian Legislative Council and only 45 to the once-dominant Fatah movement was, in the words of one analyst, “an optical illusion.”

Read more Here

2. Can “Psiphon” Beat China’s State Censorship?

Non-State actors continues to undermine state control over information:

[A] band of Internet volunteers headquartered in Cambridge has launched the Tor Project, which uses people’s spare Internet bandwidth to help others bypass the censors. And in Canada, computer scientists at the University of Toronto are working on a similar project, called Psiphon.

Anonymizer and Tor have attracted strong support from the US government. American military and intelligence services are major customers of Anonymizer, because it lets them scan foreign Internet sites without revealing their identities. The Voice of America, a broadcasting service sponsored by the US government, uses Anonymizer to help people in Iran tune in, despite their country’s efforts to block the signal.

Read More

3. Forget Russia, China and Russia, there’s also Japan in Central Asia

From PINR (published by Asia Times):

Japan added a new dimension to its engagement with Central Asia with the formation of the Central Asia Plus Japan (including Uzbekistan, Tajikistan, Kyrgyzstan and Turkmenistan) initiative in August 2004. While low-key compared with the Shanghai Cooperation Organization (SCO - China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan), Japan through the Central Asia Plus Japan initiative is likely to play an increasingly significant geopolitical role, not just in Central Asia but also in Eurasia. An important question is how Japan’s new regional initiative will impact the SCO, which is largely considered the de facto regional organization in Central Asia.

Read More

4. John Yoo on FISA and the War on Terror

Interesting short interview by Foreign Policy:

While an attorney with the U.S. Justice Department after September 11, his legal memos helped lay the groundwork for what some see as the Bush administration’s constitutional power grabs—from the treatment of enemy prisoners to domestic wiretapping. FP recently asked Yoo, now a law professor at Berkeley, about amending FISA, ending the war on terror, and whether torture works.

Read More

5. Refrigerator with Built-In Beer Tap!

Words cannot describe StrategyUnit’s Joy:

Introduction: India, the US and the Anglosphere

There has been discussion that just as Great Britain gracefully passed its world power status to the United States, the United States must look to do the same with India or else face decline in the face of a raising China. But something else that needs as much mentioning is the geopolitical significance of India, being so close to the Middle East and Central Asia (something that the map on the left I hope conveys). It is also India geography that makes it an attractive ally and partner for the United States and the West.

India has moved beyond its former position as “neutral” and leading the non-aligned movement of the Cold War. Today, we see India as a growing high-tech, financial services and biotech powerhouse; and, while India is modernizing its economy like China, it is taking an open and democratic route. And just as US has its roots in the UK, so does India in many ways (beyond colonialism). Indeed, it belongs every bit as much as the Anglosphere, as the other principal members of the Anlgosphere (US, UK, Australia).

In the February-March issue of PolicyReview, Parag Khanna and C. Raja Mohan’s “Getting India Right” outlines a very comprehensive view of the geopolitical history and direction of the Indian state. Its a length article, but worth the read.

Indeed, in order to grow and survive, the United States and the West needs an ally and partner in the New Core, India is that state.
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Introduction: Chinese and Indian Energy Cooperation

India and China kicked off their “Year of Friendship” to a rather good start. Only a few days ago (Jan 9), China and India’s respective state-owned oil companies agreed on a joint venture on the purchase and development on oil assets in Syria. And now China and India agreed on sharing bid information on bidding on foreign hydrocarbon fuel (to avoid driving prices unnecesarrily) and to encourage joint ventures.

The document that China and India signed, the two most populous states, outlined “cooperation in upstream exploration and production, refining and marketing of petroleum products and petrochemicals, oil and gas pipelines, research and development, and promotion of environmentally friendly fuels.” (source) The document also included agreements on coopertion on the production of biofuels.

In a visit to China, the Indian Petroleum and Natural Gas Minister Mani Shankar Aiyar stated:

“We look on China not as a strategic competitor but a strategic partner,” said Aiyar in an exclusive interview in Beijing. “It is clear to me that any imitation of the ‘Great Game’ between India and China is a danger to peace. We cannot endanger each other’s security in our quest for energy security.”

Aiyar also brought up the idea of joint pipeline connecting India and China, but this is something India has brought-up in the past as well without substantial response from China.

Motives and Benefits?

On the surface, this partnership is quite puzzling. This movement towards cooperation would benefit India far more than China:

• India is more dependent on imported oil (China’s 30-40% to India’s 70%)
• Indian oil companies have been repeatedly outbided by China, so why the need for China to cooperate?
• China’s “Go-Out” oil strategy has been thus far successful with its connections in Central Asia, South American and from Sudan to Iran. So why would China cut a deal now?
• China and India have gone through minor wars in the past and unresolved border disputes. How will these issues loom over China and India’s ability to cooperate?

However, China and India have cooperated in some major instances, such as China’s support of India for permanent membership in the Security Council and in the Russian-Chinese led Shanghai Cooperation Organization (SCO), India sits as an observer and a potential future member.

But in a larger context, Chinese would be foolish to stand-by as US and India continue to forge a closer tie, esp. with word last year about the Bush Administration wishing to “help India become a major world power in the 21st century”, which has mainly manifested itself in the US willingness to help India’s civilian nuclear energy program despite the nuclear testing in 1998.

Broad energy cooperation from China (successful so far in its “Go Out” strategy) would prove very significant for an equally energy hungry India. Indeed, one could say that using energy cooperation would present a more enticing carrot than what the US can offer India: military equipment and nuclear energy technology.

Additionally, engaging and building relationships with neighboring partners would fit into China’s strategy of “Raising Peacefully”. China is continuing to build regional institutions to project its power, such as through the Shanghai Cooperation Organization (SCO) and the recent Easts Asia Summit.

Some would perhaps point out that any partnership would never work between India and China, as they are economic rivals. This is true in the area of energy resources, but when it comes to their economies, the two are very different. China is concentrating on manufacturing where as India moving ahead to high-tech software area and providing advances services, such in the financial industry.

Conclusion

With the exception of Japan (which even signed a $3 billion deal for Iranian oil), things are looking rather lonely for the U.S. in Asia. US must more vigorously appraoch India as natural partners, in its shared Anglo-heritage and as the world’s largest democracy. India can help share the burden as one of the pillars of security in the Middle East and Central Asia. And China too should be approach and incorporated under a new security framework in East Asia, with the United States and Japan.

The U.S. needs to lead in incorporating China, India and other emerging New Core powers into international organizations, as prescribed by Thomas Barnett. Else, these New Core states will look to seize the initiative and form their own alliances and institutions that will increasingly sideline the United States. We can help lead the future or sit back and watch as others make it for us.

PS: Why the lack of any coverage in this on New York Times, Washington Post etc? I am writing this on 1/13/2005 12:36AM, Pacific Time. Only the Financial Timeshas something major so far.

Introduction
Everyone is talking about China as the raising superpower, with growing voices of China as a threat to the United States. There is not doubt that if China’s economic course continues, it will be a regional than global challenger to the U.S.

But what is generally never discussed or even ignored is China’s geopolitical challenges.

(Map showing major countries surrounding China)

China is Surrounded?

• To the East, there is China’s Japan (its archrival) and South Korea.
• In the North, there is Russia, a weakened state, but may revive in the future.
• To the West, there is a raising India, that may align themselves with the rest of the Anglosphere.
• To the South (technically the southeast), there is some space for China to maneuver though the region borders Australia.

Look past the landmasses and to the oceans, we see that in the Indian Ocean, critical for energy supplies from the Middle East, the United States remains dominant. This is one reason why China will have to create a blue-water navy and why it is building a port in Gwadar, Pakistan.

There is also Japan’s navy to contend with, which packs quite the punch. Keep in mind that Japan’s military has one hand tied behind its back because of the Constitution, which may change in the intermediate future. Indeed, China and Japan are now in a diplomatic spat - with China asking Japan to “explain” its military posture and Japanese FM calling China a threat. China raise to power is being met by hawkish nationalism in Japan.

Conclusion
There are at least three conclusions to derive from the map:

1. If you look at the map, the idea of containment of China by a US-Japan-Indian plus Russia group almost appears possible. I find this idea of “containing China” utterly dubious, but the map demonstrate that some natural constraints to China’s power.

Perhaps if China was still a closed economy, containment would be possible, but too much money is at stake for anyone, even Americans, to ignore.

2. Surrounded by such major states, we would expect China to be insecure in its own neighborhood. After all, there are US bases in Japan, Korea, Guam and formerly in Uzbekistan, along with US-India military cooperation. Is there a Chinese military base in Mexico?

So when we hear of China’s growing influence in the world, just remember China’s neighbor to better appreciate its own regional challenges.

3. If China ever aligns with one of its major neighbors, the U.S. will truly have a big worry on its hands. India, Japan and S. Korea are not possible partners at this point, but Russia (despite its fear of the Yellow Scare) is a potential partner.

Like China, Russia has been criticized for its lack of democracy, transparency and human rights; such criticisms, may drive the two to uniting. Indeed, if Russia follows a “Primakov Doctrine” of seeking a multi-polar world, it follows that Russia should help prop up China to challenge the U.S.

China would supply the capital and discipline, while Russia would provide access to its military technology and raw commodities. On a lower level, this is already happening, but a full blown alignment has yet to happen any time soon.

This week begins the first East Asia Summit (EAS) with over 16 countries invited, representing “3 billion people and one-fifth of global trade“. As the Washington Post writes:

As proposed by Malaysia and championed by China, the summit was conceived as a way for the 10 countries of the Association of Southeast Asian Nations to cooperate with China, Japan and South Korea — but not the United States — on security, social and economic problems. Many officials viewed it as a vehicle for Chinese leadership, making China the motor of an Asian bloc with a voice distinct from that of other Asia-Pacific groupings that include the United States.

Australia, New Zealand, Japan and South Korea were some of the major nations invited to EAS. Russia was invited as well as an observer, making it all the more striking that the US wasnt.

Despite the growth in China’s clout in its region, the U.S. is still the de facto security guarantor of the region. While East Asia Summit, like ASEAN, will probably be mired by discord and inability to create concrete action, the fact that the U.S. is not part of the discussion in Kuala Lumpur is the ill-gotten fruit of our publicly voiced insecurity regarding China.

All this talk of China as the threat is driving China to play the game in Asia as zero-sum: its either the U.S. (pun intended) or China.

Given geography and culture, the East and South-East Asia is not the “natural” sphere of influence for the U.S. and we need to be reminded this. World War II gave our position in Asia, we should be careful not to squander it by driving China to carve its sphere and fight for influence at our expense.

Instead of containment in China, we should encourage tying China in to a mesh of pan-Asian institutions that will help China gain confidence in the region despite U.S. presence, while also constrain its range of maneuver.

The Shanghai Cooperation Organization (SCO) in Central Asia is a demonstration of China ability to create its own regional institutions as a tool to challenge the U.S. We need to build our own tool by putting China and the U.S. together in it.

Additionally, India is also looking to assert itself globally, we encourage and guide them on this process as partenrs, least they form their partnership with states that hold interests contrary to ours.

Former Prime Minister Goh Chok Tong of Singapore was quoted as saying : “We have little choice but to construct a new architecture for East Asia…If East Asia does not coalesce, it will lose out to the Americas and Europe…The key question is not whether East Asia will integrate. It is how quickly and the form East Asian regionalism will assume.”

Indeed, Gok Chok Tong is correct and it is even more the reason the U.S. needs to be able to partipate in these dicussion (EAS specifically and the future of Asia in general). We cannot ignore a region as sizeable and vibrant as Asia.

Someone needs to ask why what’s going on in the State Department and why isnt President Bush at the EAS?

Sorry for the very late posting, work has been extra busy with the coming holidays. I am working on 2-3 articles, but for now here is an interesting development via AsiaTimes’s “The foundations for an Asian oil and gas grid“:

Stung by the rising international price of oil and domestic shortages coupled with high requirements of a growing economy, India has revived a plan for an oil and gas grid for the Asian continent.

The grid is part of a two-fold strategy by the two top Asian oil guzzlers, China and India, to ensure reliable delivery networks and energy security. The other element involves acquiring stakes in production and exploration projects for which New Delhi and Beijing continue to cooperate as well as compete.

The emphasis on the grid comes in wake of reports that India and China, the most aggressive shoppers for oil and gas assets in the world, are coming together to put in a joint bid. The China National Petroleum Corporation (CNPC) and the Oil & Natural Gas Corporation (ONGC), two of the most high-profile emerging global oil companies in the past year, could jointly bid for Petro-Canada’s $1-billion oil and gas fields in Syria. Both India and China feel the strategic need to diversify their energy sources from the current dependence on West Asia.

It will take years before this project turns into fruition if it ever gets there, but such a bold statement alone is a testament of new realities that the Bush Administration nor any political leader in the U.S. have began to address.

More on this later…

Howdy All Y’All…Happy Thanksgiving Day.

Here’s quick Weekend Reading…just in case you need a break from all that turkey and gravy. By the way, I’ve been doing some light posting this past two weeks, but I’ll start going back to the normal beat of things soon.

OxBlog on Jame’s Fellow’s “Why Iraq Has No Army” in December’s Atlantic Monthly

David Adensik does an analysis of James Fallows’ cover story in the Atlantic monthly “Why Iraq Has No Army”. The article has caused such a buzz that even “George Stephanopoulous attempted to use the article to cross-examine Donald Rumsfeld on Sunday morning.”

I agree with David Adesnik that despite the hype of a title, Fallows doesnt really say anything new nor goes into depth about anything groundbreaking. Adesnik also the lack of definately strong position in the article (from critical/pessimistic to hawkish) as reflective of the overall difficult position of the Democrats:

“So is there a third way that will allow Democrats to both criticize the war and be seen as hawkish? Yes there is. They can click their heels three times and say “I agree with John McCain.”"

The article is available for subscribers only, but if you would like a copy let me know and I can email it over. And, dont forget your local library (via online database) may carry a copy.

Oil Drum’s “There’s A New Kid In Town — Iran Versus Kazakhstan”

I’ve done an extensive research on Kazakhstan’s foreign policy and energy resources as part of my thesis in college, so its interesting (but not too surprising) to see Oil Drum’s “There’s A New Kid In Town — Iran Versus Kazakhstan” - which boldy proclaims the growing importance of Kazakhstan OVER Iran on energy resources:

Iran is still a giant and Kazakhstan is a middle tier country among the world’s oil suppliers. Iran produced 4081/kbd in 2004, 5.2% of the world’s total while Kazakhstan produced 1295/kbd, a paltry 1.6% percent of the whole. Iran has 132.5 billon barrels in proven reserves, 11.1% of the world’s total while Kazakhstan has 39.6 billion barrels, a 3.3% world share. But let’s look into our chrystal ball to see what the future may look like.
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Around the years 2008 to 2009 period, Kazakhstan is exporting more total oil supply to the OECD countries, China and (perhaps) India than Iran is (Empahsis mine)

Eurasianet’s “China joins the Central Asian Base Race”

Stephen Blank of Eurasianet writes on China’s recent move to secure a military base in Kyrgyzstan and even in Uzbekistan, which the US has recently been kicked out from.

While Blank focuses on Chinese miltiary presence on Central Asia, we should not forget the joint Chinese-Pakistan naval base in Gwadar, Pakistan.

Beijing’s search for a base has occurred against a backdrop of growing regional militarization and an intensification of great power rivalry in Central Asia. Thus, China’s requests of Kyrgyzstan and Uzbekistan, even if made sotto voce, have served to heighten the geopolitical jockeying in the region. It also suggests a growing willingness entertain the use of the military instrument to address regional issues. This cannot be considered a good sign.

While SCO (which includes Russia, China all all major Central Asian states) asked for the US militray to leave Central Asia, Blank correctly points out that Russia come out more strongly against a Chinese over a US presence in Central Asia.

In the UK: “Gas industry on brink of winter crisis”

The OilDrum and EnergyBulletin have been covering the less known natural gas issues that faces the US, UK and others, but here’s a mainstream news on UK’s winter energy crisis:

The country’s gas industry is on a knife edge this winter and could tip into crisis if there is a major breakdown in its ageing North Sea fields and pipelines, analysts said on Thursday.

Europe’s biggest consumer is fast running out of gas from the fields that once made it self sufficient and kept prices among the lowest in Europe. Today, UK gas is the world’s costliest fuel and winter supply will be the tightest in memory.Government ministers are under pressure to explain how one of the world’s richest nations has left its energy policy hostage to the weather and ageing North Sea equipment.

Quick Posting Only…
The blogsophere, myself included, have been guilty on focusing too much attention on the Paris Riots. Meanwhile, China looks like its taking steps to protect itself from any looming energy crisis and threats…and such a potential crisis is far larger of a strategic threat than the riots in France.

China has made two recent announcements this week:
1. Earmarking 180 billion USD for Renewable Energy
2. Push Towards Building Sustainable Cities (first by 2010)

1. The 180 Billion USD Push for Renewable Energy

From China Daily “Renewable energy gets huge outlay“:

Up to 1.5 trillion yuan (US$184 billion) will be invested by 2020 to achieve China’s plan to boost renewable energy consumption to 15 per cent of the country’s energy mix by the benchmark year.

“We are committed to our promises,” said Zhang Guobao, vice-minister of the National Development and Reform Commission. “Our renewable energy law will take effect beginning next year, and we aim to increase our renewable consumption in the energy mix from the current 7 per cent to 15 per cent by 2020.”

WSJ’s “Beijing vows to increase use of clean energy” points to the practical reason for energy diversification - security and environmental issues (which is also security related):

China has increased its emphasis on the use of alternative power sources out of concern for both the environmental costs of the country’s heavy use of fossil fuels and the security risks of its growing reliance on imported oil. But oil and inexpensive, but dirty, coal still account for most of the energy consumption in China, the world’s second-largest producer of greenhouse gases after the U.S.

Yet even on the issue of the environmental issues, environmental pollution has become an issue of domestic stability. Pollution from factories and power plants have prompted mass protests against the government. The Chinese Government has responded and is well aware of the danger of pollutions issues potentially igniting massive unrest. See my post “China - Environmentalism as a National Security Issue”

There is obviously a good amount of spin in the story, but regardless China’s announcement demonstrates that China is looking to confront energy security issues with greater resolve than the US has done with its latest energy bill.

The Energy Policy Act of 2005 has been rightfully criticized for heavily subsidizes businesses in developing existing energy types (oil and nuclear) and makes exceptions on environmental regulation for various energy-related construction. China seems to be really pushing the development of new and more efficient, clean and renewable energy resources in a bid to avoid dependence on oil (and the global oil prices that dictate oil-based energy cost).

The Energy Bill does state, however, that 10% of energy from utility companies must be from renewable sources by 2020; China appears to be 15% by 2020, but China doesn’t give much detail on what that exactly means.

In addition, the Senate just passed a bill allowing the drilling of Alaska National Wildlife Reserve (ANWR). While I think the US Government should always reserve the right to exploit readily available energy resources when needed, government attention would be better served to pushing for hybrid vehicles or at least more gas-efficient vehicles.

2. Push Towards Sustainable Cities
A British consulting firm, Arup, has won a contract to build sustainable cities in China - with the goals of sustainable energy and water use and zero emissions for its transportation system. See the article here at the Guardian’s “British to help China build ‘eco-cities’” for more information:

British engineers will this week sign a multi-billion contract with the Chinese authorities to design and build a string of ‘eco-cities’ - self-sustaining urban centres the size of a large western capital - in the booming country.

Arup, the London-based consulting firm that has already signed up for one such project near Shanghai, will announce it has clinched a deal to extend the concept into a string of cities around China.
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The Dongtan development, on an island in the mouth of the Yangtze river near Shanghai, aims to build a city three-quarters the size of Manhattan by 2040. The first phase will accommodate some 50,000 people. It is on target to be open by the time of the Shanghai Expo trade fair in 2010
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The eco-cities are intended to be self-sufficient in energy, water and most food products, with the aim of zero emissions of greenhouse gases in transport systems.

Some hints of the technologies involved are mentioned at Arup’s Press Release, “Arup unveils plans for world’s first sustainable city in Dongtan, China“:

The first phase of Dongtan is planned to be completed by 2010 when the Expo will be held in Shanghai. This phase will include a wide range of developments with urban parks, ecological parks and world class leisure facilities. Priority projects include the process of capturing and purifying water in the landscape to support life in the city. Community waste management recycling will generate clean energy from organic waste, reducing landfills that damage the environment. Combined heat and power systems will provide the technology to source clean and reliable energy. Dongtan will be a model ecological city, and its buildings will help to reduce energy use, making efficient use of energy sources and generating energy from renewable sources.

Again, surely a good amount of spin is involved, but I am not hearing anything remotely similar to this in the United States with such a high level of government involvement. Would the US Government at least try to make suburban sprawl areas more self-sufficient and sustainable?

Conclusion
I have no time to go to any deep analysis at the moment, but sufficient to say that the United States would be foolish in not taking concrete steps in addressing its energy security issues and taking a look at what China is doing.

Energy security can potentially be a more existential threat than terrorism, but its not being fully addressed by the US. In this regards, China is strengthening itself as compared to the US – at least in its stated goals.

More thoroughly analysis later…

A couple of days ago, I posted “China - Enviormentalism as a National Security Issue“, which highlighted China’s growing pollution issue becoming more than just a purely enviormental issue, but also sparking domestic unrest and a potential source of conflict with its neighbouring states.

Last week’s Economist points to China’s attempt to address the issue of pollution by including the enviorment as one paremeter in assessing some of its civil servents and party leaders. Check out the article here: The Greening of China

AN ELABORATE points system that determines the careers of officials is often blamed for many of China’s problems. In their drive to meet targets for economic growth, local mandarins squander money, ride roughshod over citizens and ravish the environment. So now China is trying to devise and embed into its assessment of officials a way of calculating a “green GDP”—which allows for environmental costs in national accounts—to help mitigate some of these excesses.

President Hu Jintao first endorsed the idea in March 2004, in a speech about the need to foster a “scientific concept of development”, a slogan intended to suggest that in pursuing growth China should pay more heed to such issues as the environment and the depletion of natural resources. Last February, the government said that ten regions, including Beijing, were carrying out a pilot project in green GDP assessment.

While this is marked progress, China is attempting the impossible in trying to quanitfy the unquantifable: what is the financial cost incurred with the lost of some perculiar speices of tree frog, how you assess the financial cost of a lost forrest, etc. Such calculations would most likely end up being mired in bureaucratic squabbling.

Indeed, the Economist article itself ends in a rather sobering note:

China’s top leaders themselves may be getting cold feet. A draft of the national economic-development plan for the next five years, published this week, stresses the need for an “a resources-saving and environment-friendly society”. But it makes no mention of a green GDP.

My blogging has been on a very light schedule as I’ve got the cold. Its days like these I wish there some fellow contributors for this blog. That said, Here’s a list of what I think should be required reading for this weekend:

Tdaxp – a New Blog (new to me)
This is a new blog by a guy named Dan. Great blog with interesting, analytical and unique perspective on a host of issues. Just keep on scrolling.

Especially interesting to me are:

• The Future That Might Have Been
• The Failure of Global Guerrillaism: Democracies Withstand Economic Pain (Disclosure: I posted on the thread on Global Guerillas, 4GW v. 3GW)
• Speaker Hastert Attacks Oil Company Record Profits (Blog Network Attacks)

Hello Saudi Arabia, Hello Oil Peak!
Here’s something I found at NYT that is not receiving enough attention, but is discussed at the Oil Drum:

“a senior intelligence official, who insisted on remaining anonymous because he was not permitted to speak publicly on the issue, said that the Saudi plans to increase production by nearly 14 percent in the next four years were not enough to meet global demand. Even the Energy Information Administration recently scaled back its expectations of how much more oil the Saudis could pump in 20 years.”

Check out The Oil Drum’s coverage here. The Oil Drum also covers other news over doubts of Saudi Arabia’s Aramco on how much reserve and capacity remains in Saudi Arabia.

China is an Unstoppable Graduate Student Factory (or not?)
In “Anoint no economic superpower before its time”, Daniel Drezner has a very good roundup putting some doubt on the opinion that China’s is churning out far more and better engineering students than the US - helping lifting China to superpower level and eventually surpassing the U.S. and the West.

Daniel Drezner’s posting is a great follow-up to my previous post, “China the Roaring Economy - Or Maybe Not “, which points to some doubts on China’s consistently astronomical GDP growth figures.

I was just about to follow-up on my previous Russia and Eurasia post when CS Monitor (CSM) today published “Russia, China looking to form ‘NATO of the East’?” and opens with this foreboding paragraph:

Russia and China could take a step closer to forming a Eurasian military confederacy to rival NATO at a Moscow meeting of the six-member Shanghai Cooperation Organization (SCO) Wednesday, experts say.

(Source: Wikipedia. Blue = Member, Green = Observer)

Pretty scary stuff, eh? Its an enticing leading paragraph, but the truth is a little milder.

Brief History of the Shanghai Cooperation Organization (SCO)
The Shanghai Five, as it was originally called, was originally comprised of China, Kazakhstan, Russia, Tajikistan and Kyrgyzstan and founded in 1996; it was later renamed the Shanghai Co-operation Organization, when Uzbekistan joined in 1999. Originally established to counter Islamic terrorist threats located in the Western China and its neighboring countries, SCO has increasingly become a vehicle to:

• further China’s quest for securing oil resources;
• enhance its role as a major player in regional security;
• and, to a lesser extant, as a united Sino-Russian bloc against growing U.S. presence in the region.

(From an old paper of mine)
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In the simplistic view of things, there are the tree hugging hippies who care about the enviorment and “pansie” issues above all else with the opposite side you have the realist obssessed with state power.

But as one partial to the realist camp, I believe this sort of simplitic portrayal needs to be rejected. State power can be defined not only by the number of tanks and guns a country has nor oil, but the number of colleges, schools, hospital, energy conservation and, yes, the state of the enviorment. Case in point, check out Slate’s “As Green as a Neocon Why Iraq hawks are driving Priuses“.

There many reasons to support enviormentalist causes: 1) Less pollution => healthier people => healthier and more productive workforce + potential source of manpower 2) If we perform energy conservation instead of drilling Alaska’s ANWAR means less dependence on foreign oil and puttings some oil reserve (ANWAR) “in the bank”, for when we really need the oil. 3) Investing in alternative energy sources now, allows us to help withstand the coming oil shock that will also effect our enemies. And so on…

Then, there are the more practical concern like simply antagonizing the people of the state. See this Washington Post report back in June 2005:

[Up] to 20,000 peasants from the half-dozen villages that make up Huaxi township had responded to the alarm, participants recounted, and they were in no mood to bow to authority. For four years, they had been complaining that industrial pollution was poisoning the land, stunting the crops and fouling the water in their fertile valley surrounded by forested hills 120 miles south of Hangzhou. And now their protest — blocking the entrance to an industrial park — was being put down by force.
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The confrontation was also a glimpse of a gathering force that could help shape the future of China: the power of spontaneous mass protest. Peasants and workers left behind by China’s economic boom increasingly have resorted to the kind of unrest that ignited in Huaxi. Their explosions of anger have become a potential source of instability and a threat to the party’s monopoly on power that has leaders in Beijing worried. By some accounts, there have been thousands of such protests a year, often met with force

In this week’s Jamestown Foundation China Brief, Nathan Nankivell covers a piece on the linkages of China’s pollution issue with local unrest and geopolitics:

[Economic Effect]

[Cost] of environmental destruction could, for example, begin to reverse the blistering rate of economic growth in China that is the foundation of CCP legitimacy. Estimates maintain that 7 percent annual growth is required to preserve social stability. Yet the costs of pollution are already taxing the economy between 8 and 12 percent of GDP per year [1]. As environmental problems mount, this percentage will increase, in turn reducing annual growth.

[Geopoltical Effects]

In addition to the concerns already mentioned, pollution, if linked to a specific issue like water shortage, could have important geopolitical ramifications. China’s northern plains, home to hundreds of millions, face acute water shortages. Growing demand, a decade of drought, inefficient delivery methods, and increasing water pollution have reduced per capita water holdings to critical levels. Although Beijing hopes to relieve some of the pressures via the North-South Water Diversion project, it requires tens of billions of dollars and its completion is, at best, still several years away and, at worst, impossible. Yet just to the north lies one of the most under-populated areas in Asia, the Russian Far East.

In an extreme situation, such as national water shortages, social unrest could generate widespread, coordinated action and political mobilization that would serve as a midwife to anti-CCP political challenges, create divisions within the Party over how to deal with the environment, or lead to a massive show of force… Though most violence would be directed toward dissident Chinese, a ripple effect would be felt in neighboring states through immigration, impediments to trade, and an increased military presence along the Chinese border. All of these situations would alter security assumptions in the region.

The United States faces its own issues with resources, enviormentalism and especially energy. While globalism and being a global player make it all but impossible for major states in pursue autarky (full indepedence, as in no dependence on other states, in economic issues), the more a state depends on resources for its growth the more vulnerable it is to shocks in the market - such as an oil shock. The continual and growing issue of water in the westerns states of the U.S. are also a source of contention, constraning the growth of cities and with it the growth of the economy.

Enviormentalism needs to broaden its focus beyond “saving the Earth” merely for its own sake or some concept of “saving for the future generation”, but rather direct and visible impact on the state in the long term - in the health of the people (workforce), economic security, energy security et cetera.

PS: On a darker note to be fair as I mentioned taking a realist position, a country could intentionally poison a weaker state through dumping waste in/directly on a weaker state or provoke a state in to conflict.

In any grand strategy discussion for the United States, EU, Russia - or any country for that matter - China is seen as the raising power (welcomed or not). Quarter after quarter comes news about its explosive GDP growth and the new buildings sprouting over coastal China, especially Shanghai, have been a testament to this.

But despite all this - people forget that China is not infallible. And while growing, we cant assume its stated spectacular growth is always on the mark - just because the officials say so. Just like most do not take for granted what China says about its defense spending, we should always been suspect about taking China’s self-reported GDP numbers for granted. There is of course real growth occurring, but the Chinese Government has an image to maintain to the world and its people and feels it can’t afford to show even a normal cyclical downturn.

From Simon World

Over at Econbrowser, James Hamilton points out to some interesting data bringing some interestingly scrutiny to that data:

Consider Simon’s graphs at the right. The first shows the levels of various Chinese GDP components, which might look reasonable at first blush. But when you subtract investment, net exports, and government spending from GDP, you arrive at what should be the sum of consumption spending plus inventory investment, represented by the magenta curve (which Simon helps the color-vocabulary-challenged to identify as “the line in the ugly colour”). Trouble is, this ugly magenta line clearly trends down, and that can’t remotely be explained by inventories. The implausible behavior is even more clear when plotted as growth rates as the red line in the second graph.

Read the entire post at Econbrowser…

Conclusion
Many on the “China as the new USSR” should take note that just like the threat and might of the USSR was sometimes overplayed (remember Kennedy during the election?), so is China sometimes played the same way. The point of the matter is simply this: the changes in China are far more complicated than can be placed in simple headlines proclaiming “The Raising Dragon” and the like.