Friday, May 1, 2015

Putin's Visit to China Tomorrow Is a Sign of a New Eurasian Alliance | Mother Jones

Putin's Visit to China Tomorrow Is a Sign of a New Eurasian Alliance | Mother Jones

Vladimir Putin and Chinese President Xi Jinping are expected to sign a
major energy deal, ushering in an era of Eurasian power.

| Mon May 19, 2014 5:09 PM EDT
This story first appeared on the TomDispatch website.

A specter is haunting Washington, an unnerving vision of a Sino-Russian
alliance wedded to an expansive symbiosis of trade and commerce across much of
the Eurasian land mass—at the expense of the United States.

And no wonder Washington is anxious. That alliance is already a done deal in
a variety of ways: through the BRICS group of emerging powers (Brazil, Russia,
India, China, and South Africa); at the Shanghai Cooperation Organization, the
Asian counterweight to NATO; inside the
; and via the 120-member-nation Non-Aligned
(NAM). Trade and commerce are just part of the future bargain.
Synergies in the development of new military technologies beckon as well. After
Russia's Star Wars-style, ultra-sophisticated S-500
air defense anti-missile system comes online in 2018, Beijing is sure to want a
version of it. Meanwhile, Russia is about to sell
dozens of state-of-the-art Sukhoi Su-35 jet fighters to the Chinese as Beijing
and Moscow move to seal an aviation-industrial partnership.

This week should provide the first real fireworks in the
celebration of a new Eurasian century-in-the-making when Russian President Vladimir
Putin drops in on Chinese President Xi Jinping in Beijing. You remember "Pipelineistan,"
all those crucial oil and gas pipelines crisscrossing Eurasia that make up the
true circulatory system for the life of the region. Now, it looks like the
ultimate Pipelineistan deal, worth $1 trillion and 10 years in the making, will
be inked as well. In it, the giant, state-controlled Russian energy giant
Gazprom will
to supply the giant state-controlled China National Petroleum
Corporation (CNPC) with 3.75 billion cubic feet of liquefied natural gas a day
for no less than 30 years, starting in 2018. That's the equivalent of a quarter
of Russia's massive gas exports to all of Europe. China's current daily gas
demand is around 16 billion cubic feet a day, and imports account for 31.6
percent of total consumption.

Gazprom may still collect the bulk of its profits from Europe, but Asia
could turn out to be its Everest. The company will use this mega-deal to boost investment
in Eastern Siberia and the whole region will be reconfigured as a privileged
gas hub for Japan and South Korea as well. If you want to know why no key
country in Asia has been willing to "isolate"
Russia in the midst of the Ukrainian crisis—and in defiance of the Obama
administration—look no further than Pipelineistan.

Exit the Petrodollar, Enter the Gas-o-Yuan

And then, talking about anxiety in Washington, there's the fate of the
petrodollar to consider, or rather the "thermonuclear" possibility
that Moscow and Beijing will agree on payment for the Gazprom-CNPC deal not in
petrodollars but in Chinese yuan. One can hardly imagine a more tectonic shift,
with Pipelineistan intersecting with a growing Sino-Russian
political-economic-energy partnership. Along with it goes the future
possibility of a push, led again by China and Russia, toward a new
international reserve currency—actually a basket of currencies—that would
supersede the dollar (at least in the optimistic dreams of BRICS members).

Right after the potentially game-changing Sino-Russian summit comes a BRICS
summit in Brazil in July. That's when a $100 billion BRICS
development bank
, announced in 2012, will officially be born as a potential
alternative to the International Monetary Fund (IMF) and the World Bank as a
source of project financing for the developing world.

More BRICS cooperation meant to bypass the dollar is reflected in the "Gas-o-yuan,"
as in natural gas bought and paid for in Chinese currency. Gazprom is even
considering marketing bonds in yuan as part of the financial planning for its
expansion. Yuan-backed bonds are already trading in Hong Kong, Singapore,
London, and most recently Frankfurt.

could be more sensible for the new Pipelineistan deal than to have it settled
in yuan. Beijing would pay Gazprom in that currency (convertible into rubles);
Gazprom would accumulate the yuan; and Russia would then buy myriad
made-in-China goods and services in yuan convertible into rubles.

It's common knowledge that banks in Hong Kong, from Standard Chartered to
HSBC—as well as others closely linked to China via trade deals—have been
diversifying into the yuan, which implies that it could become one of the de
facto global reserve currencies even before it's fully convertible. (Beijing is
unofficially working for a fully convertible yuan by 2018.)

The Russia-China gas deal is inextricably tied up with the energy
relationship between the European Union (EU) and Russia. After all, the bulk of
Russia's gross domestic product comes from oil and gas sales, as does much of
its leverage in the Ukraine crisis. In turn, Germany depends on Russia for a
hefty 30 percent of its natural gas supplies. Yet Washington's geopolitical
imperatives—spiced up with Polish hysteria—have meant pushing Brussels to find
ways to "punish" Moscow in the future energy sphere (while not
imperiling present day energy relationships).

There's a consistent rumble in Brussels these days about the possible cancellation
of the projected 16 billion euro South Stream pipeline, whose construction is
to start in June. On completion, it would pump yet more Russian natural gas to
Europe—in this case, underneath the Black Sea (bypassing Ukraine) to Bulgaria,
Hungary, Slovenia, Serbia, Croatia, Greece, Italy, and Austria.

Bulgaria, Hungary, and the Czech Republic have already made it clear that
they are firmly opposed to any cancellation. And cancellation is probably not
in the cards. After all, the only obvious alternative is Caspian Sea gas from
Azerbaijan, and that isn't likely to happen unless the EU can suddenly muster
the will and funds for a crash schedule to construct the fabled
Baku-Tblisi-Ceyhan (BTC) oil pipeline, conceived during the Clinton years
expressly to bypass Russia and Iran.

In any case, Azerbaijan doesn't have enough capacity to supply the levels of
natural gas needed, and other actors like Kazakhstan, plagued with
infrastructure problems, or unreliable Turkmenistan, which prefers to sell its
gas to China, are already largely out of the picture. And don't forget that
South Stream, coupled with subsidiary energy projects, will create a lot of
jobs and investment in many of the most economically devastated EU nations.

Nonetheless, such EU threats, however unrealistic, only serve to accelerate
Russia's increasing symbiosis with Asian markets. For Beijing especially, it's
a win-win situation. After all, between energy supplied across seas policed and
controlled by the US Navy and steady, stable land routes out of Siberia, it's
no contest.

Pick Your Own Silk Road

Of course, the US dollar remains the top global reserve currency, involving
33 percent of global foreign exchange holdings at the end of 2013, according to
the IMF. It was, however, at 55 percent in 2000. Nobody knows the percentage in
yuan (and Beijing isn't talking), but the IMF notes that reserves in
"other currencies" in emerging markets have been up 400 percent since

The Fed is arguably
70 percent of the US government debt in an attempt to keep
interest rates from heading skywards. Pentagon adviser Jim Rickards, as well as
every Hong Kong-based banker, tends to believe that the Fed is bust (though
they won't say it on the record). No one can even imagine the extent of the
possible future deluge the US dollar might experience amid a $1.4 quadrillion
Mount Ararat of financial derivatives. Don't think that this is the death knell
of Western capitalism, however, just the faltering of that reigning economic
faith, neoliberalism, still the official ideology of the United States, the
overwhelming majority of the European Union, and parts of Asia and South

As far as what might be called the "authoritarian neoliberalism" of
the Middle Kingdom, what's not to like at the moment? China has proven that
there is a result-oriented alternative to the Western "democratic"
capitalist model for nations aiming to be successful. It's building not one,
but myriad new Silk Roads,
massive webs of high-speed railways, highways, pipelines, ports, and fiber
optic networks across huge parts of Eurasia. These include a Southeast Asian
road, a Central Asian road, an Indian Ocean "maritime highway" and
even a high-speed rail line through Iran and Turkey reaching all the way to

In April, when President Xi Jinping visited the city of Duisburg on
the Rhine River, with the largest inland harbor in the world and right in the
heartland of Germany's Ruhr steel industry, he made an audacious
proposal: a new "economic Silk Road" should be built between China and
Europe, on the basis of the Chongqing-Xinjiang-Europe railway, which
already runs from China to Kazakhstan, then through Russia, Belarus, Poland,
and finally Germany. That's 15 days by train, 20 less than for cargo ships
sailing from China's eastern seaboard. Now that would represent the ultimate
geopolitical earthquake in terms of integrating economic growth across Eurasia.

Keep in mind that, if no bubbles burst, China is about to become—and
remain—the number one global economic power, a position it enjoyed for 18 of
the past 20 centuries. But don't tell London hagiographers;
they still believe that US hegemony will last, well, forever.

Take Me to Cold War 2.0

Despite recent serious financial struggles, the BRICS countries
have been consciously working to become a counterforce to the
original and—having tossed Russia
 in March—once again Group of 7, or G7. They are eager to
create a new global architecture to replace the one first imposed in the wake
of World War II, and they see themselves as a potential challenge to
the exceptionalist and unipolar world that Washington
imagines for our future (with itself as the global robocop and NATO
as its robo-police force). Historian and imperialist cheerleader Ian
Morris, in his book War! What is it Good For?, defines the US as
the ultimate "globocop" and "the last best hope of Earth."
If that globocop "wearies of its role," he writes,
"there is no plan B."

Well, there is a plan BRICS—or so the BRICS nations would
like to think, at least. And when the BRICS do act in this spirit on
the global stage, they quickly conjure up a curious mix of fear, hysteria, and
pugnaciousness in the Washington establishment. Take Christopher Hill as an
example. The former assistant secretary of state for East Asia and US
ambassador to Iraq is now an advisor with the Albright Stonebridge Group, a
consulting firm deeply connected to the White House and the State Department.
When Russia was down and out, Hill used to dream of
a hegemonic American "new world order." Now that the
ungrateful Russians have spurned what
"the West has been offering"—that is, "special status with NATO,
a privileged relationship with the European Union, and partnership in
international diplomatic endeavors"—they are, in his view, busy trying to
revive the Soviet empire. Translation: if you're not our vassals, you're
against us. Welcome to Cold War 2.0.

The Pentagon has its own version of this directed not so much at Russia as
at China, which, its think tank on future warfare claims, is already
at war
 with Washington in a number of ways. So if it's not apocalypse
now, it's Armageddon tomorrow. And it goes without saying that whatever's going
wrong, as the Obama administration very publicly "pivots" to Asia and
the American media fills
with talk
 about a revival of Cold War-era "containment
policy" in the Pacific, it's all China's fault.

Embedded in the mad dash toward Cold War 2.0 are some ludicrous
facts-on-the-ground: the US government, with $17.5 trillion in national debt
and counting, is contemplating a financial showdown with Russia, the largest
global energy producer and a major nuclear power, just as it's also promoting
an economically unsustainable military encirclement of its largest creditor,

Russia runs a sizeable trade surplus. Humongous Chinese banks will have no
trouble helping
Russian banks
 out if Western funds dry up. In terms of inter-BRICS cooperation,
few projects beat a $30 billion oil pipeline in the planning stages that will
 from Russia to India via Northwest China. Chinese companies
are already eagerly discussing the possibility of taking part in the creation
of a transport
 from Russia into Crimea, as well as an airport, shipyard, and
liquid natural gas terminal there. And there's another
"thermonuclear" gambit in the making: the birth of a natural gas
equivalent to the Organization of the Petroleum Exporting Countries that would
include Russia, Iran, and reportedly disgruntled
US ally Qatar.

The (unstated) BRICS long-term plan involves the creation of an
alternative economic system featuring a basket of gold-backed currencies that
would bypass the present America-centric global financial system. (No wonder
Russia and China are amassing as much gold as they can.) The euro—a sound
currency backed by large liquid bond markets and huge gold reserves—would be welcomed
in as well.

It's no secret in Hong Kong that the Bank of China has been using a parallel
SWIFT network to conduct every kind of trade with Tehran, which is under a
heavy US sanctions regime. With Washington wielding Visa
and Mastercard as weapons
in a growing Cold War-style economic campaign against Russia, Moscow is about
to implement an alternative payment and credit card system not controlled by
Western finance. An even easier route would be to adopt the Chinese Union Pay system,
whose operations have already overtaken American Express in global volume.

Ask hm if  has not gone to China for help as did go after he annexed forcibly
lands of sovereign country UKRAINE by Russia. On addition, India did in a brute’s
way with the help of Russia to separate the sovereign country.

In addition, during 1971 Russia for the benefit of its corny country India
under congress first time and again in 2013/2014 to annex the entire country
during congress in power under watch of Sonia Ghandi of India. Even now,

It continued
to do the same to accomplish Sonia Gahani's task left over unfinished.

Is it now to take down US with conspiracy hatched in collusion with the
Zionist Israel and seek help from China as PUTIN did when EU and WE objected
and Russia came under pressure from US and EU sanction went like this to China
seeking help and support then.

To China only, there is a saying when poodles get mad people writes
"BEWARE OF DOGS" and hang it on the gate of the house. So also, should
CHINA hang a notice board 'BEWARE OF PUTIN' in front of China's entry gate?

Because the day it gets out of the trouble with the WEST, it would bite
China. So too INDIA should not be so sanguine with its friendship with Russia.

China too should make the best use of the situation in its favor without any
mercy. It should be hard business. Russian were never been a friend in the past
and would never be a friend of any except India.

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