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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (56494)	10/15/2009 1:18:14 AM
From: TobagoJack	Read Replies (1) \| Respond to of 217927

east / west, just in in-tray, per stratfor, diabolical, as usual, attributing intentions to parties, while discounting fate, seeing proactive manipulation where there is just destiny Russia Gauges China's Position RUSSIAN PRIME MINISTER VLADIMIR PUTIN is in Beijing to mark the 60th anniversary of diplomatic relations between Russia and China. Putin talked with Chinese Premier Wen Jiabao, oversaw the signing of several economic, cultural and security deals and was scheduled to meet with President Hu Jintao before attending a Shanghai Cooperation Organization summit. During the visit, Russian and Chinese officials approved a “framework” agreement on Russian supplies of natural gas to China — an issue that continues to be held up by details of cost and logistics. Downplaying the countries’ continued failure to finalize a natural gas deal, Putin said that such details should be worked out at the enterprise level. Talk of a natural gas pipeline between Russia and China has been ongoing for years, but the cost of constructing a pipeline from Kovytka through the mountains to China has remained a sticking point, as has the contracted price for the gas itself. Moscow in the past has shown little interest in paying for the infrastructure necessary to deliver the gas, and China has not been willing to foot the bill, since it can look to less economically and politically costly alternatives, such as Central Asia and Myanmar. “The last thing Moscow wants to see as it asserts itself against Washington is for Mao to have Nixon over for tea again.” But there is more than just financing in play. As with Russia’s constant on-again, off-again promises of an oil pipeline from Siberia to China (or Japan, or both), there is a strong political element affecting the outcome of any deal. With the oil pipeline, Russia played rivals Japan and China against one another in a bidding war to gain maximum economic benefits — but also to gain political cooperation or other concessions. Russia does not necessarily have Japan to use as leverage in the natural gas pipeline game (Tokyo is already involved in the Sakhalin project, and South Korea — which also hopes to tap Russian gas — is too small a player to balance Chinese interests). Instead, Russia has held out the prospect of natural gas shipments to China as a demonstration of cooperative relations between Moscow and Beijing. Putin’s visit to Beijing is not just about signing a gas deal, or even about the raft of economic agreements inked in Beijing. Rather, Moscow is looking to gauge Beijing’s stance on the intensifying standoff between Russia and the United States. As Moscow takes a more confrontational posture on issues like Poland, Ukraine, Iran and Georgia, the Russians want to be sure that China is on their side, or at least is not going to turn against them. The last thing Moscow wants to see as it asserts itself against Washington is for Mao to have Nixon over for tea again. China’s response, however, remains guarded at best. Beijing sees the United States as weakened. Washington is tied down in Iraq and Afghanistan, facing off against Iran (and not making a strong showing) and still mired in the global economic downturn. In the meantime, China has stepped out into the international arena — offering to help alleviate the global financial situation, taking a rhetorical lead on addressing global warming and offering its good services to resolve the North Korean nuclear issue. Beijing does not see the United States as down and out — just down. The leadership sees a limited window of opportunity to ensconce China, if not as an equal to the United States, then at least in a stronger position in the global political order and economic architecture that emerges over the coming years. Certainly Beijing wants to take advantage of the perceived U.S. weakness to limit the resurgence of U.S. power, but it is reluctant to challenge Washington directly. Talk of new currencies and diversified reserves aside, China remains economically tied to the United States, and it is still far from developing a robust domestic market or finding alternatives to the U.S. consumer. For Beijing to sign on with Moscow and risk its economic relations with Washington at this point, China would need some significant guarantees that the cost will be worth the potential payout. And this is, in part, where the gas deal comes into play. Beijing expects Moscow not only to agree to the delivery of natural gas, but also to pay for the construction of infrastructure as proof of commitment. There are suggestions that, within the framework agreement, Russia will agree to the gas deal and to building the pipeline — emphasizing Moscow’s desire to bring China on board for its broader global agenda. China is unlikely to be swayed so quickly, however, as Russia for years made promises and then backtracked on the oil pipeline agreements. Beijing is also waiting to hear Washington’s counter-offer in November, when U.S. President Barack Obama visits. And in the end, China’s most likely course will be to play the rising U.S.-Russian competition to its own advantage — and to prod both sides to keep the confrontation going.