China’s latest diplomatic move will extend its trade, energy, financial and maritime power

[MCP]

China’s president Xi met with the King of Saudi Arabia Salman bin Abdulaziz Al-Saud in 2017. Reuters/Alamy

China’s latest diplomatic move will extend its trade, energy, financial and maritime power

Chinese leadership of a peace deal between Iran and Saudi Arabia, adds to their power in the region.

theconversation.com

China’s billions of dollars in global investments and infrastructure projects seem to be paying off politically and economically.

Just recently, Honduras signalled it is set to cut diplomatic ties with Taiwan, having been one of the few remaining countries to recognise the island as a state. This switch of allegiances would be a coup for China, which sees Taiwan as part of its jurisdiction, but also a sign of diminishing US power in Latin America, since the US is a long-time supporter of Taiwan.

China’s influence seems to be everywhere. Days before Chinese president Xi Jinping flew into Moscow to discuss the Ukraine war with Russia’s Vladimir Putin, China had brokered a deal between Iran and Saudi Arabia.

The high-profile deal sought to re-establish diplomatic, trade and security relations between Iran and Saudi Arabia in an effort to de-escalate tensions and bring more stability to the Middle East. The agreement transforms the nature of China’s involvement in the region from one purely driven by commercial interests into a security-related cooperation that can protect its growing assets and expatriate population in the region.

Commentators see the agreement as a positive step but wonder about the influence that Iran and Saudi Arabia can have in lessening the internal conflicts in several nearby countries. This is particularly where they support rival parties, including in Lebanon, Syria and Yemen. What the deal does highlight is the rising influence that China can exert and the waning of the US’s power over the Middle East regional order.

Studies have shown that political instability in neighbouring countries negatively affects the economic performance of a nation by disrupting trade flows and increasing defence expenditures while lessening investment, for example, in education. Under such conditions, economic incentives can drive a peace-building process. Peacefully resolving conflicts benefits countries not directly entangled in the disputes.

Since the 1990s, China has gradually become the largest trade partner of the Arab region overall and the top trade partner of Saudi Arabia. China’s exports to Saudi Arabia have annually increased at 15.3% year on year on average, amounting to US$905 million (£740 million) in 1995 and US$31.8 billion in 2020.

Meanwhile, over the same period, China’s imports from Saudi Arabia rose from US$393 million to US$33.4 billion, an average annual increase of 19.4%. In 2019, China and Saudi Arabia signed 35 trade and investments deals.

Regional power plays

Similarly, China’s exports to Iran have increased at an average 14.7% annual rate from US$276 million in 1995 to US$8.51 billion in 2020. And its imports from Iran have also risen by 14.5% annually between 1995 (US$197 million) and 2020 (US$5.85 billion).

By 2022, exports totalled US$9.44 billion and continued to grow exponentially in early 2023. Russia has recently overtaken China as the largest foreign investor in Iran, but China remains its largest oil customer.

China’s main exports to Saudi Arabia and Iran include broadcasting equipment, motor vehicles and air pumps. Its main imports are crude petroleum, ethylene polymers and acrylic alcohols.

In the context of the Saudi Arabia and Iran reconciliation, trade with China is likely to continue to follow such increasing trends. If benefits from the agreement spread to other countries in the region, China could also gain from economic relations with those countries as regional stability increases.

There is already some evidence of such positive spillover. After the agreement with the Saudis, Iran is ready to expand cooperation, hopes rapprochement with Bahrain will be possible, and is willing to improve relations with Jordan and the United Arab Emirates.

However it’s worth noting some commentators point out that previous efforts at reconciliation between Iran and Saudi Arabia were unsuccessful, while others question whether they will adhere to the terms of the agreement.
Belt and Road

As well as investing in commercial and transport infrastructure to make trade easier, the objectives of China’s Belt and Road Initiative include the strengthening of its economic leadership and the improvement and creation of free trade blocks among countries along the investment route. The Iran-Saudi Arabia agreement will generate further benefits to China by boosting the initiative’s dividends. Saudi Arabia’s strategic location bordering eight countries not only provides an alternative route for energy supply to China but also makes it a vital partner for the initiative’s infrastructure investment, which deepens China’s presence in the Middle East.

Iran’s strategic position provides it with considerable seaport facilities and has the potential for the development of an air transportation hub. China has already invested in the development of a 2,000-mile-long railway from Xinjiang’s capital Urumqi to Tehran.

The agreement also brings a more subtle benefit to China. With Russia at war, China needs to ensure the continuity of its energy supply to boost economic performance and safeguard socio-political stability at home. Saudi Arabia and Iran provide a strong basis for the diversification of China’s energy options and also to pre-empt any potential move by the United States to constrain its access to the Gulf’s resources.

Iran has the world’s fourth largest oil and second gas reserves. Saudi Arabia has the second largest oil reserves, accounting for 16.2% of the world’s total. Access to such vast resources in the context of a more stable region provide China with further assurances for the future flow of the energy supplies its economic growth needs.

The Iran-Saudi initiative has the potential to address China’s energy security issues and turn China into a global maritime power and a global monetary power. All of these factors will contribute to the sustainability of China’s economic growth, and add to its status as a superpower.

 

[MCP]

Xi and Putin meeting signals the return of the China-Russia axis and the start of a second cold war

History shows us why China and Russia want to form a strong alliance.

theconversation.com

Xi and Putin meeting signals the return of the China-Russia axis and the start of a second cold war

The Moscow meeting between presidents Xi and Putin seems to signal a deepening of their alliance. Sipa/Alamy

The heirs to two of the most violent revolutions in modern history shook hands and took stock of their “comprehensive strategic partnership of coordination for a new era”, at a recent meeting in Moscow.

Many in the west have puzzled over this relationship between Chinese Communist Party chairman Xi Jinping and Russia’s Vladimir Putin. Some have imagined, for example, that Xi would be a neutral party in Putin’s war in Ukraine, or that he could even be a peacemaker.

But rather than imagining a troubling new partnership has emerged unpredictably after decades of peacetime globalisation, we should look to a longer arc of history to understand Russia and China’s shared confrontation with the world.

Putin’s invasion of Ukraine – backed openly by China’s economic power – is just the first geopolitical product of a restored Russia-China axis and the return of two states whose ambitions were never sated by the post-cold war peace. Once again, the world’s democracies are faced with the challenge of organising their defences against these two dictatorships in both Europe and Asia.

Writing in 1950, as American grand strategy began to cohere around the cold war challenge presented by the Soviet Union, US state department official Paul Nitze explained the period of upheaval that defined his generation’s experience of international affairs:

Within the past thirty-five years the world has experienced two global wars of tremendous violence. It has witnessed two revolutions – the Russian and Chinese – of extreme scope and intensity. It has also seen the collapse of five empires – the Ottoman, the Austro-Hungarian, German, Italian, and Japanese – and the drastic decline of two major imperial systems, the British and the French.

Nitze, the architect of one of the cold war’s primary strategy documents, NSC-68, observed a world in which “the international distribution of power has been fundamentally altered”. Among the reasons for that alteration and upheaval were the two revolutions he wisely acknowledged, the Russian and Chinese. Two revolutions whose consequences, we should now recognise, have not fully ended.

We should remind ourselves that 21st-century Russia and China – and the leaders that run them – are products of the original Russian and Chinese revolutions that Nitze understood would shape the history and geopolitics of his lifetime. Xi and Putin, as products of these revolutions, are also heirs to their anti-western ideas and strategies of confrontation.

As American spymaster Jack Devine points out, Putin’s career took shape in Dresden, East Germany, ensconced in the Warsaw Pact world and he has called the Soviet empire’s collapse “the greatest geopolitical catastrophe of the 20th century”. Now, as chairman of the Chinese Communist Party, Xi is heir to what the party calls “the great rejuvenation of the Chinese nation”, a project of national revival that originated with Mao’s “New China” and has continued on in various forms since the founding of the People’s Republic of China in 1949.

Xi’s China seeks confrontation with the US and the establishment of a new order with China to “take center stage in the world”. In this endeavour, Putin’s Russia is Xi’s chief collaborator and “strategic partner”.

As totalitarian communist states in the 20th century, Russia and China challenged the world’s democracies and sought to establish an order of their own. The decade-long Sino-Soviet alliance spanned the Korean War and multiple Taiwan crises, producing a two-theatre strategic challenge for the US and its allies spanning both Europe and Asia. The US, having just fought the second world war in both the Atlantic and Pacific, was perhaps more prepared to manage a two-theatre strategic contest.

Simultaneous containment of both communist China and the Soviet Union provided a check against their ambitions. The Sino-Soviet alliance eventually became unsustainable and broke apart largely because Mao aspired to return China to a position of power and centrality in world affairs; he would not tolerate a role as junior partner to Moscow.

Today these roles have reversed, and these ambitions have been restored, not in the name of communist ideology, but in light of an aggressive, militarist nationalism that animates both regimes.

President Xi and President Putin meet in Russia in March 2023. UPI/Alamy

Xi and Putin showed the world the philosophical depth and contours of their relationship in their joint declaration of partnership at the Beijing Olympics in 2022 just weeks before Putin’s invasion of Ukraine. But the strategic partnership goes back even earlier.

Throughout the 2010s, both nations worked to expand their military, economic and diplomatic ties. In the statement at the Beijing Olympics, China and Russia pledged mutual support for the other’s “core interests”. Moscow pledged its support for Beijing’s claims over Taiwan, which it called “an inalienable part of China”, and Beijing pledged that “both sides oppose further enlargement of Nato and call on the North Atlantic Alliance to abandon its ideologised cold war approaches”.

Joint nuclear-capable bomber exercises, land and naval exercises, increasing trade in energy, technology, China’s propaganda support for Moscow, and new reports of Chinese assault rifles and body armour for Russia, are just some elements of what has taken shape since Putin’s invasion of Ukraine.

The shared China-Russia division of Europe and Asia is reminiscent of the original geography of the Sino-Soviet Alliance. As Stalin told his counterparts in communist China: “There should be some division of labour between us … you may take more responsibility in working in the East … and we will take more responsibility in the West.”

Putin’s war in Ukraine is not the only conflict, of course, that this axis may produce. China’s economic engagement with the democracies in the post-cold war supercharged a modern-day People’s Republic of China that now contests the world’s democracies in critical technologies and strategic industries and has built a military of unmatched scope in Asia that is meant to settle scores of its own in the Pacific.

This is the return of 20th-century antagonists whose ambitions never truly went away.

 

[MASTERBAKER]

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[QueEx]

US Navy sails near South China Sea island militarized by China
By Brad Lendon, CNN
Updated 2:58 AM EDT, Mon April 10, 2023

(CNN)The US Navy has sent a destroyer close to a contested island in the South China Sea that Beijing has fortified with military installations to stake its territorial claims on the region.

The sailing came as the Chinese military entered a third day of a show of force around Taiwan, a thousand miles away near the northern entrance to the South China Sea, in response to a brief visit by Taiwan's President to the United States.

On Monday, a statement from the US Navy's 7th Fleet said the guided-missile destroyer USS Milius passed within 12 nautical miles -- the internationally recognized limit of a nation's territorial waters -- of Mischief Reef in the Spratly islands, known as the Nansha Islands in China.



But Beijing has asserted its claims to the island by building it up and placing military infrastructure on it.

The US contends such actions are in violation of the Law of the Sea Convention.

"Features like Mischief Reef that are submerged at high tide in their naturally formed state are not entitled to a territorial sea. The land reclamation efforts, installations, and structures built on Mischief Reef do not change this characterization under international law," the US 7th Fleet statement said.

China claims almost all of the vast South China Sea as part of its territorial waters, including many distant islands and inlets in the disputed body of water, many of which -- like Mischief Reef -- Beijing has militarized.

A spokesperson for the People's Liberation Army's Southern Theater Command said the US destroyer "illegally intruded" into Chinese waters near Mischief Reef, which Beijing calls Meiji Reef.

"China has indisputable sovereignty over the South China Sea islands and their nearby waters," Air Force Senior Col. Tian Junli said in a statement.

The US destroyer's so-called freedom of navigation operation (FONOP) defended the rights for vessels of any nation to operate in the area, the 7th Fleet statement said.

US warships regularly conduct such FONOPs in the South China Sea and Monday's was the second in three weeks by the Milius, which on March 23 sailed near the Paracel Islands, known as the Xisha Islands in China, in the northern part of the South China Sea.

"The United States will fly, sail, and operate wherever international law allows -- regardless of the location of excessive maritime claims and regardless of current events," the 7th Fleet said in Monday's statement.

After the March FONOP, Beijing claimed the US had violated its sovereignty while "undermining peace and stability in the South China Sea," Tan Kefei, spokesperson for the Chinese Defense Ministry, said.

Monday's US FONOP came as Chinese forces entered their third day of large-scale military exercises around the island of Taiwan, the self-governing democracy to the north of the South China Sea that China's ruling Communist Party claims as its territory despite never having ruled it.

Beijing launched the operations around Taiwan on Saturday, a day after Taiwan's President Tsai Ing-wen returned from a 10-day visit to Central America and the United States where she met US House Speaker Kevin McCarthy.

Beijing had repeatedly warned against Tsai's meeting with McCarthy and had previously threatened to take "strong and resolute measures" if it went ahead.

CNN's Beijing bureau contributed to this report.

US Navy's USS Milius sails near South China Sea island militarized by China | CNN

The US Navy has sent a destroyer close to a contested island in the South China Sea that Beijing has fortified with military installations to stake its territorial claims on the region.

amp.cnn.com

“IN HARMS WAY”
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