Unregistered
08-10-09, 10:11
Hot from the Dragon’s Mouth
by Louis Coulomb Beijing July 11, 2020
Fragmented reports have been circulating this week that US military forces made an incursion into Xinjiang province in North Western China. According to one source, this is part of a larger operation christened Uyghur Thrust aimed at ‘backing Muslim separatists in their struggles against repression and intimidation at the hands of the Chinese military.’ At an international press conference Chinese officials vociferously denied any attack, while at the same time condemning the idea as ‘unlawful aggression.’ The suggestion of humanitarian concerns was deemed a ‘human rights smokescreen [being used] to influence developments in the great Yugsar basin.’ The area has been thrust onto the international stage ever since deep NMR mapping revealed a 400 billion barrel oil field beneath its dusty plains. Satellite images suggest Russia has begun to mobilise troops on its Kazakstan and Mongolian borders, signalling an intention to respond if the putative conflict threatens to spill-over into its territory.
Since global oil production peaked in 2013 the US has focussed all of its military might on securing energy supplies and maintaining transportation routes. This has been the source of significant tension between the US and China. It now looks as though ten years of economic tit-for-tat between these two countries may have finally come to a head. The zero-sum interdependencies of the Wal-Mart era are a quaint memory of a gentle early millennium. China has shifted from being the US’s discount overseas factory to a vertically integrated and highly efficient economic powerhouse, with a thriving internal market, and strong economic ties with populous Brazil and India. What’s more, until recently, China’s foreign reserves were bulging with US dollars and treasury bills even while China no longer depended nearly as much on exports to grow.
Economists seem to agree on only one thing these days: when the oil price broke the mythical $300 a barrel in 2017, the global economy suffered a deadly blow. Since then, the lights have virtually gone out in Africa, and much of South America is down to a flicker. The smaller, less resilient – mostly European – companies have either collapsed or been taken-over by larger ones, further consolidating global corporate structures. Mergers and acquisitions have brought together the most unlikely of couples. Last week saw the hostile take-over of Ballistika, Russia’s largest military hardware manufacturer, by the mammoth Exxon-GE-Pfizer Group (EGPG). Most of Ballistika’s dozen or so plants are situated in North Eastern China — plants which have for the last 6 years been China’s foremost supplier of advanced missile technology. But with the suggestion of US troops trickling into Xinjiang province, some things may be about to change.
As many commentators have pointed out, the most important developments in recent years all seem to be hinged on whether or not adequate supplies of energy can be secured. There isn’t a major multinational in the world that doesn’t have a stake in the oil and gas supply chain, be it upstream or downstream; be it in shipment or commercialization. Many alliances have been built around political objectives. One of these has been to squeeze China out. Facing chronic widespread power outages and oil price spikes, China has been forced to step up coal production dramatically over the last few years. Calls by Beijing to reopen at once hundreds of derelict and ill-equipped coal mines grimly echoes the Great Leap ventures that brought so much hardship and environmental degradation. About one third of the coal is currently being converted to liquid, synthetic fuel to make-up the two million barrels a day shortfall from conventional oil. The rest is either burned on site or transported to power plants around the country.
The amount of CO2 released into the atmosphere by China has doubled in the last five years. Perversely, some might claim this is an indication of how well things are going. After all, the true scale of global warming continues to be hotly debated. The quintupling of freak hurricanes since the beginning of the century is suggestive, but climatologists from the Hadley Centre predicted a waterlogged Benelux by 2020, and this appears not to be the case. And so, until it is, to some there is no global warming. This seems to be the mindset predominating in boardrooms, and up and down the global strip mall.
Here in the Cunning City, the man on the street is little concerned with the world’s conflicts and upheavals. He’s worked hard to be able to consume hard, and no border skirmish is likely to upset that.
by Louis Coulomb Beijing July 11, 2020
Fragmented reports have been circulating this week that US military forces made an incursion into Xinjiang province in North Western China. According to one source, this is part of a larger operation christened Uyghur Thrust aimed at ‘backing Muslim separatists in their struggles against repression and intimidation at the hands of the Chinese military.’ At an international press conference Chinese officials vociferously denied any attack, while at the same time condemning the idea as ‘unlawful aggression.’ The suggestion of humanitarian concerns was deemed a ‘human rights smokescreen [being used] to influence developments in the great Yugsar basin.’ The area has been thrust onto the international stage ever since deep NMR mapping revealed a 400 billion barrel oil field beneath its dusty plains. Satellite images suggest Russia has begun to mobilise troops on its Kazakstan and Mongolian borders, signalling an intention to respond if the putative conflict threatens to spill-over into its territory.
Since global oil production peaked in 2013 the US has focussed all of its military might on securing energy supplies and maintaining transportation routes. This has been the source of significant tension between the US and China. It now looks as though ten years of economic tit-for-tat between these two countries may have finally come to a head. The zero-sum interdependencies of the Wal-Mart era are a quaint memory of a gentle early millennium. China has shifted from being the US’s discount overseas factory to a vertically integrated and highly efficient economic powerhouse, with a thriving internal market, and strong economic ties with populous Brazil and India. What’s more, until recently, China’s foreign reserves were bulging with US dollars and treasury bills even while China no longer depended nearly as much on exports to grow.
Economists seem to agree on only one thing these days: when the oil price broke the mythical $300 a barrel in 2017, the global economy suffered a deadly blow. Since then, the lights have virtually gone out in Africa, and much of South America is down to a flicker. The smaller, less resilient – mostly European – companies have either collapsed or been taken-over by larger ones, further consolidating global corporate structures. Mergers and acquisitions have brought together the most unlikely of couples. Last week saw the hostile take-over of Ballistika, Russia’s largest military hardware manufacturer, by the mammoth Exxon-GE-Pfizer Group (EGPG). Most of Ballistika’s dozen or so plants are situated in North Eastern China — plants which have for the last 6 years been China’s foremost supplier of advanced missile technology. But with the suggestion of US troops trickling into Xinjiang province, some things may be about to change.
As many commentators have pointed out, the most important developments in recent years all seem to be hinged on whether or not adequate supplies of energy can be secured. There isn’t a major multinational in the world that doesn’t have a stake in the oil and gas supply chain, be it upstream or downstream; be it in shipment or commercialization. Many alliances have been built around political objectives. One of these has been to squeeze China out. Facing chronic widespread power outages and oil price spikes, China has been forced to step up coal production dramatically over the last few years. Calls by Beijing to reopen at once hundreds of derelict and ill-equipped coal mines grimly echoes the Great Leap ventures that brought so much hardship and environmental degradation. About one third of the coal is currently being converted to liquid, synthetic fuel to make-up the two million barrels a day shortfall from conventional oil. The rest is either burned on site or transported to power plants around the country.
The amount of CO2 released into the atmosphere by China has doubled in the last five years. Perversely, some might claim this is an indication of how well things are going. After all, the true scale of global warming continues to be hotly debated. The quintupling of freak hurricanes since the beginning of the century is suggestive, but climatologists from the Hadley Centre predicted a waterlogged Benelux by 2020, and this appears not to be the case. And so, until it is, to some there is no global warming. This seems to be the mindset predominating in boardrooms, and up and down the global strip mall.
Here in the Cunning City, the man on the street is little concerned with the world’s conflicts and upheavals. He’s worked hard to be able to consume hard, and no border skirmish is likely to upset that.