Wednesday, December 23, 2009


2009 Energy Development Report published by the Chinese Academy of Social Science, an official think-tank.

Robert Ebel, at the Center for Strategic and International Studies in Washington,

. Writing in the Central Asia & Caucasus Institute Analyst of Johns Hopkins University in October last year, Stephen Blank of the US War College

US Senate Foreign Relations Committee held a rare hearing in July regarding China's geopolitical thrust into the Central Asian region. Testifying at the hearing, Richard Morningstar, the US special envoy for energy,

Pan Guang, director of the Shanghai Center for International Studies

the People's Daily newspaper

US Senate Foreign Relations Subcommittee special hearing on Central Asia on December 15, George Krol, the deputy assistant secretary of state for South and Central Asian affairs,

Nursultan Nazarbayev
new laws would allow only those foreign investors that cooperate with his industrialization program to tap his nation's mineral resources
Beijing has asked Kazakhstan - a country the size of Europe but with just 16 million people - to allow Chinese farmers to use one million hectares
soya and rape seed
Pro-Western elements
Bolat Abilov, co-chairman of the opposition party Azat [United Social Democratic Party]
it would mean 15 people working per hectare.
15 million people would be brought from China.
In 50 years
50 million Chinese
an ambitious 7,000 kilometer pipeline to link the region's gas fields to cities on China's eastern seaboard.
Ten days after
Hu arrived
the 1,833-kilometer pipeline connecting gas fields in Turkmenistan, Uzbekistan and Kazakhstan (and possibly Russia) to China's Xinjiang Autonomous Region.
China pushed ahead against Western views that last year's renewed unrest in Xinjiang put it at risk
Growing nervousness in Washington about the Chinese pipeline

US Senate Foreign Relations Committee held a rare hearing in July regarding China's geopolitical thrust
Richard Morningstar,
US needed to develop strategies to compete with China for energy in Central Asia
openly flagged China as the US's rival in the energy politics of Central Asia.
US experts usually
support for Trans-Caspian projects that bypassed Russian territory.
even argued that China was a potential US ally for isolating Russia.
As China's Turkmen gas pipeline got closer to completion, US disquiet began to surface.
China comes in and says, 'Hey, we're going to write a check for X amount of money, we're going to build a pipeline'. That's not a hard deal to accept, and we [US] can't compete in that way."
two suggestions. One, "to develop a strategy to deal with that [Chinese policy] and encourage the US companies to negotiate creatively with Turkmenistan".
Two, Washington should also think about whether it makes sense for US companies to cooperate with China in such countries.

n geopolitical terms, there is a conflict of interest between the two countries. One principal objective of China is to lock in energy sources that are not dependent on supply routes passing through the Malacca Straits,
the crux
"gas that goes to China competes with gas that could go westward"
US realizes that devising a counterstrategy to China's is easier said than done.
In 2005, CNPC International paid
$4 billion for a 33% stake in PetroKazakhstan.
China bought up Kazakh oil assets worth nearly $2 billion in the Karazhanba oil and gas fields
committed $210 million to look for oil and gas in Uzbekistan over the next five years.
In 2008, Kazakhstan and China agreed on jointly developing oil and gas reserves on the continental shelf of the Caspian Sea, while China's Guangdong Nuclear Power Co and Kazakhstan's state nuclear firm Kazatomprom agreed on boosting uranium output in their joint venture.

In April 2009, China made the mother of all energy deals by agreeing to lend Kazakhstan $10 billion in an unprecedented "loan-for-oil" deal and also agreed with state-owned KazMunaiGas to jointly buy oil producer MangistauMunaiGas for $3.3 billion.

In 2009, China also agreed to issue a $3 billion loan for developing the Central Asian state's largest gas field, South Iolotan, which is estimated to contain anywhere between 4 trillion and 14 trillion cubic meters of gas, according to Britain's Gaffney, Cline and Associates - making it one of the world's five largest gas deposits.

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Western calculations went awry in two directions. First, they estimated that, in the ultimate analysis, Central Asian states would be wary of dealing with their giant neighbor and prefer Russia and the West. Second, they blindly assumed that Russia in any case was bound to perceive the Chinese gains as a threat to its own strategic interests and would therefore resist and checkmate Beijing at some stage, indirectly serving Western interests.
Again, China's engagement in Central Asia has been comprehensive and not confined to oil and gas.
Turkmen President
his country's relations with China have become "multi-faceted".
"They now cover all major areas - politics, economy, trade, culture, science, education,'
both sides favors complete mutual understanding and trust, equality and respect, unity of views on key issues of world politics and bilateral relations."
Chinese because they never raise difficult issues such as democracy and human rights
Western discourse on democracy

and human rights as doublespeak from countries that pander to authoritarian regimes without scruples when it suits their business interests.
China has reset the terms of the West's engagement
need to negotiate
Secondly, while they are under compulsion to abandon the cherry-picking approach they once took
China-Turkmenistan trade has jumped 40 times since 2000; 35 enterprises are working in Turkmenistan today with Chinese capital.
as diverse as oil and gas, telecommunications, transport, agriculture, textile, chemical and food industries, healthcare and construction.
China's interest in comprehensive engagement
in contrast with the predatory instincts of the Western companies
The second aspect
Russia's post-Soviet control of gas exports from Central Asia has ended.
China's gain
Russia's loss. But it isn't quite a zero-sum game
"China is pursuing diversification of energy imports, while the Central Asian countries are pursuing diversification of exports,''
will also promote

chemical, agricultural, transport infrastructure construction and light industries,
Russia's security interests would also be served, as unemployment, a root of instability, will be cut,
China will become Russia's major strategic competitor in the Central Asian energy industry,''
"In fact, it is not the case.
"Experts believe that the pipeline can transport natural gas produced both in Turkmenistan and in Russia
"In addition, the natural gas cooperation between China and Central Asia is open and non-exclusive, and does not seize Russia's market or compete with Russia for resources,"
the Turkmen-Uzbek-Kazakh pipeline
won't hurt Russia's interests
US and European energy diplomacy in Central Asia has been rendered a lethal body blow.
what Moscow has been striving for
European Union's chances of winning Turkmen supplies for its US-backed Nabucco pipeline
severely diminished
to cut Russia out
China's gain is Europe's loss,
Russia's gain
Russian gas
to remain Europe's
main energy

Russia can now advance
North Stream and South Stream
without constantly having to look over its shoulder
Beijing intends
for the Russian gas
western Siberian
as well as its European part
a competing consumer of Russian gas.
Putin's voice
our own pipeline network, which could possibly also reach China,
We know how fast the demand is growing there
the "loss" of Turkmen gas for Nabucco
depends on sourcing Iranian gas.
2009 will be noted by historians
a truly regional project has taken shape
China has made such a high level of regional cooperation possible.
It will now be a Herculean task for the West to whip up Sinophobia among the Central Asians.

The alarm bells are ringing in Washington.
Senate Foreign Relations Subcommittee special hearing on Central Asia on December 15, George Krol, the deputy assistant secretary of state for South and Central Asian affairs, said:
The region is at the fulcrum of key US security, economic, and political interests. It demands attention and respect and our most diligent efforts and the Obama administration [is committed] to this very approach."
US attempt is to widen the gyre of its AfPak strategy so as to draw the Central Asian region into it.
the Northern Corridor for supply of
make the regional governments important collaborators in the war effort.
the Afghan war has already spilt over to Central Asia.
there has been a spurt in militant activities in Central Asia (and Xinjiang).
Krol framed it
"to expand
Central Asian
to defeat extremists in Afghanistan and Pakistan and bring stability and prosperity to the region"

to "increase the development and diversification of the region's energy resources and supply routes"
He also invoked archetypal fears about terrorists getting hold of weapons of mass destruction,
the region is still engaged in activities relevant to the proliferation of weapons of mass destruction, namely, uranium mining, plutonium production and the fabrication and testing of biological and chemical weapons,"
US interests would have been best served if Russia and China were at loggerheads in Central Asia
"By opening the RFE [Russian Far East] to Chinese investment and blessing similar investments in Central Asia, Moscow is reversing
a new regional order
China is set to become the region's security manager,
The shift
has been necessitated
by the downturn
following the global economic crisis
Moscow was pursuing a policy aimed at developing the RFE and eastern Siberia
through revenues from energy exports to Europe.
energy demand in the European
compelled to rethink

Medvedev admitted
RFE needed to be coordinated with Beijing's regional strategy of rejuvenating northeast China's dilapidated industrial base.
the jettisoning of
prevent Chinese economic penetration of Central Asia.
Moscow faces difficulty in underwriting the security
on its own
congruence of interests with China in forestalling NATO's expansion
Hu to Moscow in June
deals worth $100 billion
facilitating massive Chinese investments in regional projects
t is going to be very difficult for the US to disrupt these plans.
Blank put it
these new deals with Russia have a profound significance that we overlook at our peril."
China has
financial muscle
It can simply outspend the US
Short of stoking the fires of militancy and ethnic unrest in Xinjiang, the US may have run out of options
the stability of Xinjiang is crucial
"foreign devils on the Silk Road" - militant groups with foreign backers - can harass China
Beijing is extremely wary of the hidden intentions behind the Afghan strategy Obama recently unveiled.

Chinese criticism of the US troop surge in Afghanistan
the People's Daily

Yes, sometimes history does recur ... The shadow of the Vietnam War even now still hovers ... what unfolds is replicating the model in Iraq, and further back, in Vietnam.

The war-torn Afghan population will not side with the slumbering Karzai government nor will they welcome the US presence. On the other hand, the bigger footprint made by the enhanced US troops and its NATO allies only help fuel the insurgency and trigger more fierce resistance ... Taliban dies hard.

The predicament facing the US and the one-year old Obama administration is that at the time, there seems no policy that can reverse the undoing in Afghanistan, even with more troops and better-placed tactics. But the young president will try whatever he can to steer clear of the pitfall that would turn the superpower into an occupying power.

Obama's Afghan surge and the new strategy as a whole essentially aim
at pursuing longstanding
US strategic

interests of controlling Central Asia and containing Russia and China through "soft power" - methods
Russia tends to speak in two voices at times about its ties with NATO within the "reset" of relations with the US.
The specter of an open-ended US military presence in the region haunts China.
China was the US's accomplice against the Soviet Union in the Afghan jihad in the 1980s
Washington has myriad ways to make use of radical and extremist elements as instruments of geopolitics.
the horrible example of its "all-weather friend" Pakistan, which by associating with US strategy in Afghanistan has been dragged into the vortex of instability and become the target of religious extremists and militants.

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