China, Roads, Shipping, Pipelines, and Placing a Go Stone

China is busy making global access easier for itself. And a bit harder for others.

They are busy building sand islands in the South China Sea. Eventually to claim the waters around them, and then to be able to “watch over” anyone wanting to ship through “their” waters.

http://www.washingtonpost.com/world/us-navy-alarmed-at-beijings-great-wall-of-sand-in-south-china-sea/2015/04/01/dda11d76-70d7-4b69-bd87-292bd18f5918_story.html

Satellite images show rapid construction on various coral reefs and rocks controlled by China within the disputed Spratly Islands, including harbors, piers, helipads, buildings and potentially at least one airstrip, experts say. Last month, State Department spokeswoman Jen Psaki expressed concerns that the program was an attempt to “militarize outposts on disputed land features.”

Includes lots of nice photos too… and a pretty good discussion of the potential geopolitical issues involved.

Then, here in the Americas, they are busy building their own bypass to the Panama Canal.

http://fpif.org/new-nicaragua-canal-china-barges/

The New Nicaragua Canal: China Barges In
A proposed canal in Nicaragua, built by China, is a tangible signal that the United States can’t set the terms of the world economy forever.

By Arnie Saiki, November 20, 2013
[…]
Nicaragua and China have come to an agreement allowing the construction of a new inter-oceanic canal in Nicaragua, connecting China with the Caribbean and its Atlantic-American trade partners. This won’t just increase the flow of goods between China and the Americas. It will also usher China into the region as a major political force—something that is likely to raise alarm in Washington, which will regard any Nicaragua-China alliance as a destabilizing influence in the hemisphere.

China’s role in the development of this canal is partly about expanding its global trade. But it’s also a way for China to push back against Washington’s militarized “Pacific Pivot,” as well as the U.S. drive to establish a Trans-Pacific Strategic Economic Partnership (commonly shortened to Trans-Pacific Partnership, or TPP) that seeks to contain China’s global economic growth.
[…]
What BRICS offers is a new reserve currency that helps stabilize economies in developing markets, thereby providing greater access for development and trade, as well as a less draconian debt structure, compared to Wall Street investments.

Of course these competing systems are not mutually exclusive—after all, China and the United States have a symbiotic and integrated economic relationship with each other. However, the TPP and the BRICS economies are competing over the trade and investment rules for the 21st century—and the neoliberal model no longer gets the last word.

That article has more on how the competition is heating up and who’s picking which sides. Such as:

As we unpeel the geographical layer of the TPP, we find that the TPP countries form an integrated wall separating the Mercosur and ALBA economies under Brazil’s economic influence from the Asia-Pacific economies under China’s regional influence—in effect turning the west coast of South America into a barrier between two of the BRICS charter members. A Nicaraguan canal not only provides the maritime access that streamlines the supply chain between China and Brazil, but it also provides new trade advantages to the Global South.

This does not necessarily alienate the United States, but it does have the potential impact of reducing U.S. economic and military hegemony in the region.
[…]
A China-led Nicaragua Canal challenges Washington’s 150-year-old claim of military and economic hegemony in the Western Hemisphere as outlined in the Monroe Doctrine. The rise of the trans-global BRICS economy, coupled with a new inter-oceanic canal that the United States has no jurisdiction over, means that the United States has been, at this moment, out-maneuvered by China.

An interesting side note is that Al Jazeera is not so keen on the canal and points out the downsides for the locals as the deal, apparently, gives China a free hand in picking out the route and what dirt to acquire along the way…

http://www.aljazeera.com/indepth/features/2015/04/40bn-canal-project-dividing-nicaragua-150408213353654.html

The $40bn canal project dividing Nicaragua

Supporters say it could lift country out of poverty, but opponents point to potential for environment and rights abuses.

Lindsay Fendt | 14 Apr 2015 12:32 GMT | Poverty & Development, Politics, Environment, Latin America
[…]
La Junta will be one of the first towns demolished to make way for a 300km transoceanic canal that will bisect Nicaragua.

The project’s backer, Chinese telecommunications mogul Wang Jing, expects to complete the $40bn project within five years.
Canal supporters claim that the project could lift Nicaragua – the poorest country in the Western Hemisphere after Haiti – out of poverty, but opponents point to the potential for environmental and human rights abuses.

Though La Junta and nearby towns have been surveyed for construction, no one has come to tell the residents where they will go when the canal comes.

The people in La Junta say they woke up one day to a fleet of police and Chinese engineers in their backyards.
[…]
Nicaragua’s Law 840, passed in June 2013, grants HKND the right to expropriate land anywhere in Nicaragua.
The company is required to compensate residents the tax-assessed value of their land, but residents say this is usually lower than the market price.

There’s more at that article. I’ve also noticed a guy who was a former NPR reporter now works for them and is doing a hit piece in support of Global Warming, and that A.J. has definitely drunk the Green Kool-Aid. Then again, maybe the Arab Oil Money knows that crushing coal and nukes only leaves oil to power the world…

Then there is the way that China is paving the Money Road…

http://www.forbes.com/sites/donaldkirk/2015/03/23/chinas-asian-infrastructure-investment-bank-upsets-u-s-lures-u-s-allies-including-korea/

RBES ASIA 3/23/2015 @ 3:33AM 6,952 views
China’s Asian Infrastructure Investment Bank Upsets U.S., Lures U.S. Allies, Including Korea
Donald Kirk
Contributor

China’s foreign minister, Wang Yi, in Seoul last weekend for a trilateral meeting with Korea’s foreign minister, Yun Byung-se, and Japan’s foreign minister, Fumio Kishida, lobbied hard for Korean and Japanese membership. His pitch was basic: It’s an Asian venture, he told them. “We can cooperate together.”

The display of easy-going friendship among the three foreign ministers provided still more evidence of what is turning into an humiliating experience for the United States — that is, defiance by America’s closest friends and allies of U.S. pleas to boycott China’s invitations to join AIIB.

The U.S. claims the bank will undermine the authority of the International Monetary Fund, the Asian Development Bank and other organizations and also detract from TPP, the Trans-Pacific Partnership that Washington is promoting in a bid to cut through trade barriers. The response to U.S. entreaties to avoid the AIIB like the plague, however, is turning into an embarrassment at the highest levels.

How could U.S. Treasury Secretary Jack Lew, the most outspoken foe of AIIB, think otherwise after Christine Legarde, the IMF managing director, assured a forum in Beijing last weekend that certainly the IMF would cooperate? So too, she seemed confident, would the World Bank.

If Legarde was just putting on a show of politesse for the benefit of her Chinese hosts, others are pledging serious substantive support. To Washington’s dismay, Germany, France and Italy quickly signed on after Britain, surely one of America’s strongest, oldest friends and allies, decided that trade and investment with China took priority over Washington’s qualms about the bank’s transparency and governance.

Then there’s the NY Times take on things. Even they had to admit that the Obama leadership got singed on this one…

http://www.nytimes.com/2015/04/03/world/asia/china-asian-infrastructure-investment-bank.html?_r=0

Washington basically undermined itself by failing to allow a bigger voice for China in the World Bank and the International Monetary Fund, said David Daokui Li, a former adviser to the People’s Bank of China who has a Ph.D. in economics from Harvard.

“The Americans got nervous, saying to its allies, ‘You guys can’t join, they are not dependable,’ ” Mr. Li said. “But in the end, all of America’s best allies ended up joining. We should be the ones most surprised, not the Americans.”

Washington had warned some major allies not to join. And President Obama took a hard-line stance against China’s attempts to exert power in the region in his State of the Union address this year, said Bonnie Glaser, senior Asia adviser at the Center for Strategic and International Studies in Washington.

“He said China should not be able to write the rules — the United States should write the rules,” Ms. Glaser said.

Now that the United States has lost the battle, it has softened its position, saying that it will encourage the World Bank and the Asian Development Bank to cooperate with the new bank, provided projects meet certain standards.

And we have the BRICS setting up their own Internet Backbone link bypassing US authorities and snooping.

http://www.infowars.com/brics-countries-build-new-internet-to-avoid-nsa-spying/

That has a nice global map showing a mostly underwater cable connecting the BRICS. (Brazil, Russia, India, China, South Africa). Then with a different color cable on to a landing point in Miami for any traffic they have destined for the USA…

In light of revelations that the National Security Agency hacked German Chancellor Angela Merkel’s phone, in addition to recording information about 124 billion phone calls during a 30-day period earlier this year, the fallout against the NSA has accelerated.

Brazil is set to finalize a 34,000-kilometre undersea fiber-optic cable by 2015 that will run from Vladivostok, Russia to Fortaleza, Brazil, via Shantou, China, Chennai, India and Cape Town, South Africa.

According to the Hindu, the project will create, “a network free of US eavesdropping,” which via legislative mandates will also force the likes of Google, Facebook and Yahoo to store all data generated by BRICS nations locally, shielding it from NSA snooping.

Now that, alone, is an interesting pattern and picture. China bypassing US power, control, and checkpoints. Finding plenty of ways to just ignore the USA. So, when the time comes to say “Pay up on all that debt”, the USA will have little leverage to say anything other than “Oh, um, er, would you like hundreds?”…

But, IMHO, the more interesting bit is the Pakistani angle. China is building a new Silk Road out the back door of China and down the spine of Pakistan to the sea. This deal is well thought out, and has a LOT of angles to it. I’d not be surprised if there are similar such thoughts and angles in the works on some of the other deals. But first, a word about Go.

https://en.wikipedia.org/wiki/Go_(game)

It is one of my favorite games. It makes chess look like a game for kids and checkers look like something to keep the baby busy. The basic notion is that you place a ‘stone’ (like a small white or black M&M candy) and then try to build added structures around it so that it can not be captured. If a structure has two holes in it such that a stone placed in either hole gets captured, it is not possible to capture that structure as it takes two stones and that can never happen. You might own a large expanse of the board, but without “two eyes”, it can all fall. There are times when a single small stone placed in an important place is later shown to be a critical anchor that a run of stone reaches, and the opponent is now one stone ahead of you and can capture the space. Sadly, I’ve not had time to play it in many years, but I still have my board and stones (somewhere…).

What can be clearly seen in all this is a Global Go Strategy. China carefully placing stones, some small and some large, and when they all connect, it will have many ‘eyes’ and be very secure. The US State Department really needs to hire some Go players with strategic skills… Right now they are playing checkers, at best.

It looks like there are also online Go providers now…

http://www.flyordie.com/go/

No idea if that site is safe and no vetting done, so use at your own discretion. Me, I like the tactile process of putting stones on wood…

http://news.xinhuanet.com/english/china/2014-02/20/c_133131328.htm

http://news.xinhuanet.com/english/china/2014-02/21/c_133131361.htm

Two stories in two days (but different pictures even if the text is similar) leads me to think they find this an important deal…

CHINA-PAKISTAN-LI KEQIANG-HUSSAIN-MEETING (CN)

BEIJING, Feb. 20 (Xinhua) — China and Pakistan have provided further details on their planned economic corridor project, signaling the two nations’ commitment for stronger ties.

Leaders of the two states agreed to accelerate the building of the economic corridor, which will focus on energy cooperation, transportation infrastructure construction and industrial parks.

During a meeting with visiting Pakistani President Mamnoon Hussain on Thursday in Beijing, Chinese Premier Li Keqiang emphasized the strategic significance of building an economic corridor.

The two sides need to implement large-scale cooperation projects in electricity and new energy, promote the management of the port of Gwadar and advance connectivity schemes, Li noted.

The economic corridor project was proposed during Li’s visit to Pakistan in May 2013.

For China, the project with Pakistan links China’s strategy to develop its western region with Pakistan’s focus on developing its economy, Ma Jiali, researcher with China Institute of Contemporary International relations, told Xinhua.

Geographically, the economic corridor refers to the 2,000-kilometer road and rail link connecting Kashgar in west China’s Xinjiang Uygur Autonomous Region to the southwestern Pakistani port of Gwadar.

However, the project is not confined to transportation infrastructure construction. In addition to road and railway construction, it includes energy cooperation and investment programs.
[…]
In the joint statement issued after Chinese President Xi Jinping’s meeting with Hussain, the Chinese side assured Pakistan of its full support in helping the latter to address its energy deficit, which is a major obstacle ahead of Pakistan’s socio-economic development.

China’s state-owned enterprises and private companies are being encouraged to invest in Pakistan’s conventional and renewable energy sectors.

In addition to hydropower, Ma Jiali predicted that China will also provide technical support for Pakistan to develop its wind, solar and nuclear energy.

Tang Mengsheng holds the view that the construction of the economic corridor will also help improve the security situation in some underdeveloped areas of Pakistan by reducing poverty and generating job opportunities.

Note that they don’t mention coal. No worries, that’s in a different deal…

http://www.pmln.org/government-to-develop-6600-mw-gaddani-energy-park-ahsan/

I’ve bolded a couple of bits.

Government to develop 6,600 MW Gaddani energy park: Ahsan

Posted on September 6, 2013

ISLAMABAD, Sep 4 (APP): Minister for Planning and Development, Ahsan Iqbal has said that the government is planning to develop 6,600 MW coal based Gaddani energy park with the assistance of Chinese companies. Ahsan Iqbal said during his visit to a 900 Mega Watt Puttalam Coal Power Plant being set up by Chinese company in coastal of Colombo, Sri Lanka, according to a press statement received here on Wednesday. He was accompanied by senior officials of Water and Power and Foreign Ministries. He said the experience of Sri Lanka is very relevant in this regard.

“Pakistan wants to utilize more coal,
hydel, and gas for power generation and move away from furnace oil based power generation as oil prices have increased many fold and enhanced per unit generation cost”, he added.
[…]
(Courtesy: Associated Press of Pakistan)

Guess we can add Pakistan to the list of countries not caring about Global Warming and coal… Go Pakistan!

So China is busy making a major highway down the center of Pakistan to the sea, enhancing port facilities (maybe a ‘base’? at least port rights), including a rail road line, pipelines (oil from nearby Iran?) and fiber optic cables (that private internet link?). Good luck getting a tap placed on China phone calls to Iran via fiber in Pakistan…

This will put China heavily into the Arabian sea, with a load of ships all over the major oil shipping route (I’m sure any ship that sinks in the mouth of a gulf during a time of tensions would be strictly accidental…) with port and base facilities, and a direct communications and shipping links home via rail and roads. Most likely a nice airport or two also. This is just a super huge collection of “stones” placed neatly with a dozen “eyes” in it, while essentially telling the Americans to go home. Decades of peeing on heads of State in “little countries” we wanted to bully, come home to roost.

Furthermore, this puts India in a pickle. It is now surrounded by China and Pakistan, who both have disputes with it. China to the north and south in the sea, Pakistan to the west. Only a tiny strip open to Burma. Bangladesh as formerly part of Pakistan is an interesting question mark, though being mostly irrelevant null space and swamp is more like a blockade than a strategic piece. So what’s the ‘state of play’ of Burma?

http://onlinelibrary.wiley.com/doi/10.1111/1759-5436.12094/abstract

Abstract

China has been a long-standing partner for Burma (Myanmar), providing important political, military and economic support. Burma’s reform process poses new questions and challenges for China. China’s interests in Burma are primarily economic-driven by its need for strategic resources and are highly controversial. This study argues that China’s approach to Burma’s development is determined by its own national economic interests. Beijing’s view is that this is a ‘win-win’ situation. This is a view under critical review in Burma as it seeks to re-balance its foreign relationships. This article details the critical point at which Sino–Burmese relations now stand, explains Burma’s current development profile, outlines Chinese involvement in Burma and explains China’s development approach to Burma in terms of China’s national economic, political and security interests.

Hmmmm….

So India is surrounded by a nuclear China and Pakistan… Watch for the Chinese Navy to eventually spread their presence into the Indian Ocean in a larger way as “protection” for their interests in Burma and Pakistan…

So tying this all together, we have China making it harder for folks in South Korea and Japan to ship to Europe or Africa without passing through waters that China claims, and is getting ready to control, or going way further out to sea, and even then needing to pass by a Chinese presence at key choke points. At the same time, China side steps US choke points and power centers, slips under more surveillance, gets better more secure access to oil, and has nice fat roads to move men and material if needed. I’d say the last stone to place will be large military fleet presence, then an unwillingness to loan more money to the USA just about the time we can’t build ships without it. Maybe about 10 to 15 years out. Possibly sooner.

You just have to admire a game so very well played. I just wish that Madam Hillary and His Highness Obama were even aware of the board…

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
This entry was posted in Economics - Trading - and Money, Political Current Events, World Economics and tagged , , , , , , , , , , , . Bookmark the permalink.

9 Responses to China, Roads, Shipping, Pipelines, and Placing a Go Stone

  1. Graeme No.3 says:

    Given Obama’s lead footed approach to Australia where he embarrassed the PM, gave ammunition to his left wing critics over global warming, and then expected the Australians to touch their forelock and refuse to have anything to do with the Asian development front, I can’t say that Hillary could be worse. Australia will join and it is the conservative side of politics, hither too the big supporters of the USA alliance, that is wondering if the USA is worth continuing with.
    How to lose friends and antagonise them.

  2. Richard Ilfeld says:

    Obama has made good things bad and bad things worse internationally. But on China he shares failing with Americans of all stripes (including me for most of my life) ,tho for different reasons. Whether Libertarian, Conservative, or liberal, Americans believe in “We Hold these truths to be self evident…..”. Progressives believe that ‘we are smarter than you and should run everything…listen to the international elites’. The Chinese appear to be marching to be the beat of a different drummer. They define words like freedom differently than we do, and have little resect for western elites or cultural traditions. They appear to believe in their own manifest destiny to dominate the inferior races of the world, and don’t much care what we think. Thus, like most other actors on the world stage but with an order of magnitude more determination, they pursue what they believe as their own self-interest. If our views are corrupted by some notion of wanting to good for all mankind, we are at a disadvantage. We do not deen to be xenophobic, but need to be focused and goal directed. This is not a strength of the current folks in office. The whole world is laughing at Lucy and Ethel, the State Department sorority sisters, but China is focused on taking advantage of the weakness behind them.

  3. punmaster52 says:

    And President Obama took a hard-line stance against China’s attempts . . . “He said China should not be able to write the rules — the United States should write the rules,” Ms. Glaser said.

    Somebody help me up off the floor. I’m out of breath laughing.

    Patience and the long view are the Chinese strengths, aren’t they?

  4. R. de Haan says:

    The Locus is swarming and they hate our guts. But don’t make the mistake to regard them as a counter operation of the NWO. They have similar objectives. Global Control and Master of the Universe.

  5. R. de Haan says:

    For now the Chinese Government looks for ways to stop massive sums of money from leaving the country, deflate the massive real estate bubble and cope with the reality of bondmarkets and QE. But which figures can they trust for their policy to be effective?

    The West voluntarily committed suicide
    China however is not really in a better shape. I take my beer and popcorn and watch the landing of their economy.
    Will it be soft or will it make a big hole in the ground.

    I have absolutey zero confidence in centralist schemes. Those plants they grow look beautiful and they sell good and smell good but then the plant suddenly dies. Eaten from within by Parasites.
    There is a name for this parasite and it is called Corruption.

  6. p.g.sharrow says:

    The Clintons play for the other side. pg

  7. E.M.Smith says:

    @Graeme No3:

    It makes sense if you consider that the ‘goal’ is to diminish the USA and get us roped into an internationalist view. The USA and our idea of individual liberty as the source of authority and our sense of being Exceptional and NOT subjugated to “international law” as promulgated by the UN stands in the way of a nice Global Socialism (many on ‘their side’ have said so); so obviously anything that ‘brings America down a notch’ is a good thing in their eyes. So of course he wants to P.O the Australian conservatives and give ammo to the socialists there… especially if it comes at the expense of American Exceptionalism…

    @Richard Ilfeld:

    BINGO! Give that man a rubber ducky (made in China…)

    “One Chinese Heart” is how they phrase it. Strong sense of kin and clan, but with the uber-clan of all China over all of anyone else.

    (Don’t get me wrong. I’m not bigoted about China. I was enamored of a Chinese girl in high school – though her 3 older brothers warned me off… white guy being not good enough… and I’ve worked well with several Chinese partners over the years. It is just that you must accurately know your place and what the cultural norms are. I can work with it.)

    Anyone who thinks of China with a western perspective is properly called a “mark”…

    @Punmaster52:

    You think YOU are laughing… The folks in China will be absolutely hysterical over that one! They won’t show it, though. Just quietly take advantage of it. Say “yes sir” while thinking “knife to back slowly so not notice”…

    I admire them for that… takes a lot of self control and long road planning…

    @R. De Haan:

    Yes, China is corrupt. Yes, it has dramatic ‘quality’ issues. Yes, it has horrible mal-distribution and greed issues.

    It is also globally “eating the lunch” of the western democracies. After we are collapsed, they can just pick up the pieces. So it’s a rough ride and things get broken, no matter, still win…

    The only real question is: “Who’s corruption is worst?”

    @P.G.:

    See the last line above…

    The Clintons are horribly corrupted at this point, selling government favors for money and screwing the “little guy” globally for a fat speaking fee from a grant recipient. How is this worse than China? Hard to say… and that is sort of the point…

    Oh, and I’d say that rather than playing for the “other side”, they play for the biggest paycheck “donation”…

    To quote Chinese proverb: Rotting fish first stink from head.

    @All:

    At the end of the day, China is expanding, by a great deal, and in very strategic ways. The USA (and even more so the EU) is inward directed, shrinking, and fighting internally over little nothings while being invaded and subverted by active agencies. (Along with some “help” in the subversion from folks like the Global Socialists in our own government).

    The end game of that is a China dominated cesspool, but still China dominated.

    China will have problems, some major, but until the USA gets back to it’s roots and has a government that actually stands up for the USA and it’s real citizens, we will be headed downhill faster than China. (This is structural due to the China money management of their dollar peg and manipulation of differential trade rules. THEY know that “free trade” is not as beneficial to them as mercantilism. It’s our stupidity to not recognize that and stand up to it.)

  8. Ric Werme says:

    I learned about Go in the waning days of the Cold War. My friend commented that nation’s military strategy could be compared to those countries’ favorite games.

    Russia: Chess.
    Focus on the center of the board, bring fire power from many directions, and try to out-gun your opponent. Annexing eastern Europe made it easier to concentrate on western Europe.

    Japan: Go
    In WWII, Japan knew they didn’t have to defend all the Pacific islands, just enough to form an enclosing territory that would be defensible. Pearl Harbor was a reach well into enemy territory, and while the goal of destroying the US Navy is outside the concept of Go, it prevented the US from responding to Japan’s spreading influence in the Pacific theater.

    United States: Poker
    The US’s plans for the MX missile project called for several ICBMs shuttled around between many more silos, the effect being bluffing the Russians into knowing where to target a first strike to take out the US missile system. http://www.washingtonpost.com/archive/politics/1978/08/25/missile-shell-game-is-consistent-with-salt-warnke-says/73ac1946-fbf5-4eb8-950e-f6196d3fe3fa/

    Today’s China: They play Go too, as well as the Japanese and Koreans.
    They don’t have the immediate need to reach half way across the playing field, they can shore up their territory and push their influence outward more gradually. And capture some of the Philippine’s territory along the way. Too far away for the US to do anything about it except bluster.

    http://www.theguardian.com/world/2015/jun/27/china-proceeds-with-building-artificial-islands-on-reefs-claimed-by-philippines

  9. Larry Ledwick says:

    That shell game concept is very similar to another idea that was under consideration, building a long underground tunnel with several launch points along the route. It would be sort of a whack a mole approach as you could never be sure which silo was loaded and active at any given time, forcing the opponent to target all of the launch points which would greatly increase the costs and uncertainties for a counter strike.

    The Russians are apparently attempting to accomplish the same uncertainty with road mobile missiles again :
    https://en.wikipedia.org/wiki/RT-2PM2_Topol-M
    https://en.wikipedia.org/wiki/RS-24_Yars

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