WORLD VIEW:'Power projection' was the main theme at this week's 60th anniversary celebrations, writes PATRICK SMYTH
MUSING GLOOMILY on the prospects of a diplomatic solution to the row over Iran's nuclear programme, a Financial Timescolumnist, Gideon Rachman, this week recalled Otto von Bismarck's observation that "the great questions of the day will be decided not by speeches, or by resolutions of majorities, but by blood and iron".
As new talks begin with Iran amid western concerns over its continuing refusal to abandon its enrichment plans, there are fears that China will block further pressure through tougher UN Security Council sanctions. Rachman might well also have recalled – in this week of celebrations of the 60th anniversary of the foundation of the People’s Republic of China – Mao’s dictum that political power grows out of the barrel of a gun. Or of oil, for that matter, which matters a great deal to China.
At the G20 meeting last week, China’s statement on Iran, unlike Russia which appears to be edging towards support for sanctions, simply called on Iran to co-operate with the International Atomic Energy Agency. China subsequently insisted that sanctions were not the way to go.
In the celebrations on Thursday there was a distinctly Maoist “power projection” quality to Beijing. Not to mention the old rhetoric. Three weeks ago Xinhua, China’s official news agency, reported that the Communist Party issued a collection of 50 Maoist-like slogans for the day: “Warmly celebrate the 60th anniversary of the founding of the People’s Republic of China!” and “Hail the great success of our country’s reform and opening-up and socialist modernisation!” And how about “Adhere to the one China policy and promote the country’s great cause of peaceful reunification!” or “Adhere to the independent foreign policy of peace and unswervingly pursue the road of peaceful development!” Fond memories of the Trinity Internationalists’s slogans of the 1970s flooded back.
Amid intense security, up to 200,000 “volunteers”, 5,000 troops, hundreds of battle tanks, squadrons of J-10 fighters, and wave after wave of Awacs reconnaissance aircraft, helicopters, aerial tankers, transport planes, bombers and fighters paraded, drove and flew through Beijing, flaunting the latest in cruise and intercontinental ballistic missiles, armoured personnel carriers, assault guns and mobile missile launchers. The twin messages were unmistakable: “don’t mess with us, but can we interest you in any of our fine new products?” China was last year the world’s ninth-largest arms exporter, with a total of $468 million in sales. Blood and iron – China is a major supplier of arms to Iran.
Another story this week also spoke eloquently of the new China and its interests. The Financial Times reported its bid for the equivalent of a sixth of Nigeria’s oil reserves, extending China’s reach into Africa (it also reported that an investment by Warren Buffet has propelled China’s 103rd richest millionaire into first place with a personal net worth of $5.1 billion).
The reality is, of course, that Beijing, with its insatiable appetite for oil as more Chinese consumers crave cars, is most unlikely to bite the hand that feeds it. Tehran is China’s third biggest supplier of crude oil with shipments of 17.2 million tonnes so far this year, up 14.7 per cent on the same period last year. And the latter has invested some $120 billion in the last five years in the Iranian industry – so much that analysts say Chinese engineering firms won’t be able to handle all the work.
Over that period Chinese firms have moved in on projects that western and Japanese firms have left dangling. In 2004, Sinopec, the China Petroleum and Chemical Corporation, signed a $70 billion deal to develop the Yadavaran oil fields and to buy 10 million metric tons of liquefied natural gas from Iran every year for 25 years.
In June, the China National Petroleum signed a $5 billion deal with National Iranian Oilto develop the massive South Par gas fields, after the Iranians accused French oil producer Total, its previous putative partner, of delaying the project.
Sinopec has also signed contracts worth more than $5 billion to either expand or build four refineries in Iran, plants that will help mitigate the effects further western-inspired sanctions will have on a country that, though a major crude exporter – it has an estimated 10 per cent of the world’s oil deposits and 15 per cent of natural gas – has to import refined oil.
Cut the oil trade between China and Iran? Fat chance!
On the contrary. China sees the issue of Middle East-generated oil as a key strategic concern, and its former special envoy to the region, Sun Bigan, has in recent days even been urging his country to strengthen its links with Iran. In an article for a prominent state think tank, he warned that President Barack Obama’s effort to improve ties with Islamic states in the Middle East was a tactical shift that had not removed the potential for friction between Washington and Beijing.
“The US has always sought to control the faucet of global oil supplies. There is co-operation between China and the US, but there is also struggle, and the US has always seen us as a potential foe,” he wrote in the September issue of Asia/Africa Review. “Bilateral quarrels and clashes are unavoidable. We cannot lower vigilance against hostility in the Middle East over energy interests and security.”
China looks after its interests.