Tuesday 19 August 2014

China Getting Its Act Together

A laughably arrogant heading ?  Writing here about China my refrain has generally been - the 21st century may ulimately belong to them but, right now,  how very far they are from being a confident actor on the world stage.   Constantly wrong-footed by events from Libya to MH370, barely able to restrain Fat Boy's appalling North Korean excesses, clumsy in their dealings with neighbours around the seas they share, yet in serious need of raw materials from beyond their borders: no, China hasn't cracked the Top Nation thing - yet.

But as a good empiricist I need to keep my assessment up-to-date, and here's an interesting marker, from the Peoples Daily Online (English version, natch).  They've translated the headline: Is China Wrong To benefit From Iraq?, but I stuck the original into google translate, and it came up with the rather more revealing: China on the issue of Iraq "free rider" wrong?  which neatly captures the concern - as ever, a tad defensive about how they are perceived.  Is China just letting the USA et al do the heavy lifting for them in Iraq ?   At which point, under his banner of every nation for its own self-interest, our friend Budgie will no doubt say: why not ?  But clearly the Chinese see the need to cover the statesmanlike angle.

Here are some salient gobbets. 
Taking advantage of stability in Iraq and the Middle East as a whole, China makes substantial profits from the petroleum trade*, which further promote the healthy development of relationships between China and Iraq ... Responding to Obama's announcement of airstrikes against extremists in Iraq, a spokesperson from the Ministry of Foreign Affairs said that Beijing "has an open mind towards any actions that help to ensure security and stability in Iraq" ...
China hopes that the U.S. will make a further contribution to Iraq's reconstruction and development, and deal rationally with China's contributions to Iraq in trade, investments and infrastructure. As China's political and economic interests sharply expand in the world, it is increasingly necessary for U.S. to cooperate with China when it comes to vital global issues. In view of this changing situation, even if Obama does not request China's participation, China will pay close attention to international affairs.
To my ear, the contrast between this and Putin's typical pronouncements is noticeable.  I know who's the more likely to get a constructive 'phonecall from Washington.

* an interesting statement, n'est-ce pas ?


MyChineseName said...

China in Iraq would be an interesting prospect.
They have long had ties with Iran who is the main Sh'ite backer in Iraq and they have their own Islamist crisis brewing in the west of their country.
A couple of years back they handed the Israelis a bloody nose when Hezbollah fought against the South Lebanon invasion under the direction of Chinese officers. Israel lost a lot of tanks and credibility in that one. Seems they're only really effective against civilians with Aks.

But a Chinese hostage situation might provoke a response. They need the practice and acclimatisation too, I'm sure.
Projecting force beyond their borders would be a first too and an ideal opportunity to showcase and fine-tune their equipment and methodologies.

If they did move in numbers for whatever reason it would be interesting times indeed.

Nick Drew said...

Projecting force beyond their borders would be a first too and an ideal opportunity to showcase and fine-tune

yes - at some point they gotta get started

but they do have this 'face' thing, which makes them reluctant to have a go

good job we never really cared about that !

capitalism - never mind the ideology, give it crack, see what happens

Anonymous said...

"China will pay close attention to international affairs."

Doesn't sound like the Great Leap Forward to me.

andrew said...

having read 'why nations fail', i thought the authors judgement on China was interesting and probably right:-
unless they reform the system to be less 'extractive' (not necessarily democratic) the chances are that china will suffer an internal revolution at some point.

some point being over the next 50 years or so.

rwendland said...

My memory of Chinese involvement in the post-2003 Iraqi oil industry was that the Chinese were willing to act as contractors to Iraq, so most of the profits (and risk) stayed with Iraqi players. But the western oil countries wanted a ground lease deal, where the bulk of profits (and risk) went to western companies. So predictably China got most of the contracts.

China was not really taking adavantage of Iraq, but offering a better deal, which got the business.

Is my memory sound on this one? A lesson for western oil companies perhaps?

Nick Drew said...

got me there, Mr W

do you recall whether they adopted the same approach in Libya ? I remeber they were mighty surprised - and miffed - when the bankrupt trio of Italy / France / UK (plus assorted euro-hangers-on including the Danes for some obscure reason) turned up and blew the Colonel away, their having invested a lot of time, money and effort in getting a position there

Thud said...

Hezb won such a victory in 2006 they have not challenged Israel again even after Israeli raids on their assets in Syria, perhaps China could help with some more such victories.

rwendland said...

ND, I've not followed the Libya story. Cannot easily find 2005-era news items for Iraq oil, but this 2009 article seems to tell the story:

"[foreign oil companies] submit to 20-year contracts. These multinationals were not given a share in Iraqi oil production; they will be paid a $2 fee per barrel for raising output above a mutually agreed level. ... All these "service" deals will dodge Iraq's parliament ... Instead of US Big Oil getting the lion's share, strategic competitors Russia and China turned out to be big winners."

This 2013 NYT story continues:

"Chinese state-owned companies seized the opportunity, pouring more than $2 billion a year and hundreds of workers into Iraq, and just as important, showing a willingness to play by the new Iraqi government’s rules and to accept lower profits to win contracts. ... Chinese executives impress their hosts not just by speaking Arabic, but Iraqi-accented Arabic. ... Chinese happily accept the strict terms of Iraq’s oil contracts, which yield only minimal profits. China is more interested in energy to fuel its economy than profits to enrich its oil giants. ...

... an Iraqi Oil Ministry official who handles contracts with foreign oil companies. “They are very cooperative. There’s a big difference, the Chinese companies are state companies, while Exxon or BP or Shell are different.”"

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