What Really Happened in Beijing: Putin, Obama, Xi And The Back Story The Media Won’t Tell You
November 16, 2014 "ICH" - "Salon"-
By way of events on the foreign side, the past few weeks start to
resemble some once-in-a-while event in the heavens when everyone is
supposed to go out and watch as the sun, moon and stars align. There are
lots of things happening, and if we put them all together, the way
Greek shepherds imagined constellations, a picture emerges. Time to draw
the picture.
The
situation on the ground in Ukraine is getting messy again. Equally,
events of the past year now leave Ukraine’s economy not far from sheer
extinction. You have not read of this because it does not fit the
approved story, but Ukraine’s heart barely beats. Further east, we hear
in the financial markets that the ruble’s decline brings Russia to the
brink of another financial collapse.
Let’s
see. Oil prices are now below $80 a barrel. It costs me nearly $20 less
to put gasoline in my car than it did a year ago, and good enough. But
why has the price of crude tumbled in so short an interval? It makes
little sense when you gather the facts, and — goes without saying — you
get no help with that from our media.
Let’s
keep on trucking. Secretary of State Kerry went to Oman for another
round of talks on the Iranian nuclear question last weekend. Russia
recently emerged as a potentially key part of a deal, which will be the
make-or-break of Kerry’s record. In effect, he now greets Russian
Foreign Minister Sergei Lavrov with one hand and punches him well below
the belt with the other. Somewhere beyond our view this must make sense.
En
avant! Obama went to Beijing last week for a sit-down with Xi Jinping,
who makes Vladimir Putin look like George McGovern when he wants to,
which is not infrequently. Still in the Chinese capital, our president
then attended a meeting with other Asian leaders to push a trade
agreement, one primary purpose of which is to isolate China by bringing
the rest of the region into the neoliberal fold. (Or trying to.
Washington will never get the overladen, overimposing Trans-Pacific
Partnership off the ground, in my view.)
A
big item on Xi’s agenda — he was in on the Pacific economic forum, too —
was the recent launch of an Asians-only lending institution intended to
rival the Asian Development Bank, the World Bank affiliate doing the
West’s work in the East. Being entirely opposed to people helping
themselves advance without American assistance and all that goes with
it, Washington used all means possible to sink this ship. When Obama got
off the plane in Beijing, the Asian Infrastructure Investment Bank had
$50 billion in capital and 20 members, more to come in both categories.
Xi,
meantime, had a productive encounter — another — with the formidable
Vlad. My sources in attendance tell me both put in strong performances.
In short order, Russia will send enough natural gas eastward to meet
much of China’s demand and — miss this not — in the long run could price
out American supplies in other Pacific markets, which are key to the
success of the current production boom out West.
This
is a lot of dots to connect. As I see it, the running themes in all
this are two: There is constructive activity and there is the
destructive. Readers may think this oversimplifies, but for this there
is the ever-lively comment box below. I am willing to listen.
Let’s
go back to early September. On the 5th, Germany brokered a cease-fire
between the Ukraine government in Kiev and the rebels in the eastern
Donbass region. Washington made it plain it wanted no part of this,
preferring to continue open hostilities. And then strange things
happened.
Less
than a week after the Minsk Protocol was signed, Kerry made a
little-noted trip to Jeddah to see King Abdullah at his summer
residence. When it was reported at all, this was put across as part of
Kerry’s campaign to secure Arab support in the fight against the Islamic
State.Stop right there. That is not all there was to the visit, my trustworthy sources tell me. The other half of the visit had to do with Washington’s unabated desire to ruin the Russian economy. To do this, Kerry told the Saudis 1) to raise production and 2) to cut its crude price. Keep in mind these pertinent numbers: The Saudis produce a barrel of oil for less than $30 as break-even in the national budget; the Russians need $105.
Shortly
after Kerry’s visit, the Saudis began increasing production, sure
enough — by more than 100,000 barrels daily during the rest of
September, more apparently to come. Last week they dropped the price of
Arab Light by 45 cents a barrel, Bloomberg News just reported. This has
proven a market mover, sending prices to $78 a barrel at writing.
Think
about this. Winter is coming, there are serious production outages now
in Iraq, Nigeria, Venezuela and Libya, other OPEC members are screaming
for relief, and the Saudis make back-to-back moves certain to push
falling prices still lower? You do the math, with Kerry’s unreported
itinerary in mind, and to help you along I offer this from an extremely
well-positioned source in the commodities markets: “There are very big
hands pushing oil into global supply now,” this source wrote in an
e-mail note the other day.
The
Russians, meantime, are reported to be sending soldiers and artillery
back across, or maybe just across, the Ukrainian border. This we read,
but we read nothing as to why this may be so, assuming for argument’s
sake it is. We are invited to accept that there is no reason worth
reporting.
I
decline the invitation. The possibility-likelihood-probability — it is
impossible to say, we are so ill-informed — is that these reported
deployments are in reaction to moves kept out of sight. Given
Washington’s disapproval of the Minsk accord and its underhanded
manipulations in the oil markets since it was signed, I label this a
likelihood, at least, maybe more.
As
to the Ukrainian economy, this is getting sordid even before the
International Monetary Fund gets its mitts on the place. A Royal Bank of
Scotland analyst in Hong Kong, Roland Hinterkoerner, just published a
tour d’horizon, a few of the highlights (or lowlights) being these:
This
kind of report leaves me nearly speechless — and our correspondents
silent, of course. All that we have read of this past year, events
taking place in the name of democracy and a better life for Ukrainians,
comes to this. “The economy?” Hinterkoerner concludes. “What economy?”
Onward. “Going forward,” as the State Department’s chirpy spokespeople like to put it.
Kerry
just finished up in Oman, where a round of talks on the Iran question
were held just short of the Nov. 24 deadline for a deal. Russia’s role
in these talks has suddenly grown potentially large. To break the
impasse over Iran’s centrifuge count, Moscow offers to take most of
Iran’s stockpile of unprocessed uranium and send back enriched fuel when
Iran needs it to power the nuclear energy program it wants. This is a
reprise of an idea first floated five years ago, and this time Tehran
finds it acceptable, at least tentatively.
Put
this in the larger context: With the prospect of ending three and a
half decades of pointless hostility within reach, this is the moment to
be battering Russia as near to a pulp as possible with sanctions, market
interventions to its disadvantage, and who can tell what on the
military side in Ukraine? You start to think Washington simply cannot
help itself, and more on this in a minute.
And
so to Beijing. Nobody will put it this way, but Obama arrived with one
failure already accomplished and others to come. It was a mistake to
oppose the Beijing-sponsored Asian lending institution in the first
place, and already it begins to cost the Americans. The TPP trade pact
is no further along, you may have noticed. The climate pact Obama and Xi
signed looks so far like an agreement for the sake of an agreement —
something Obama could bring home in triumph. The only “successes”
American media were able to report were a few market-opening measures of
benefit to specific American corporations. Nothing visionary, fair to
say. A junior trade negotiator could have got this done.
And
here is why, a point hardly lost on the Chinese: There is no vision on
the American side, only resistance and objection. Xi has consistently
urged a “new great power relationship,” and if someone can explain why
this is not a perfectly logical thought in the face of 21st century
realities, again, to the comment box with it.
Washington’s
claim to be an unrivaled Pacific power by destiny goes back to Teddy
Roosevelt’s imperial cruise around the region after the U.S. defeated
the Spanish and massacred the Jefferson-reading Filipino democratic
movement. We simply cannot surrender the turf, realities be damned.
Xi,
on the other hand, is all about realities, and not a few have to do
with stronger ties with Russia. Xi and Putin shook hands on a
historically huge, $400 billion gas deal earlier this year. How did
Obama feel when the two announced during his visit that they have just
reached another one, this time for $325 billion?
Details:
The gas will arrive from Siberia by way of a not-yet-constructed
pipeline. PetroChina will take a 10 percent share of a subsidiary of
Rosneft, the Russian gas company. By 2020, China will source a quarter
of its demand from Russia; the Russians, in turn, will by then sell more
gas to China than they now send to Europe.
Listen to the sound of the world turning. Wonder why your media do not pass it on to you.
Always
more in this line, it seems. Russia is also in numerous other energy
deals with China, including one that doubles petroleum exports to the
People’s Republic. Then there is the Silk Road Investment Fund, a $40
billion vehicle to finance development projects in the seven nations of
Central Asia. Relations with Vietnam and Japan, horrible of late, now
appear to be on the mend. So much, maybe, for Washington’s role as
protector of the region from the reawakening empire.
“Add
this up,” writes Ken Courtis, a close observer of the international
scene for decades, “and you have the outline of a number of important
initiatives which will be key to China’s increased lead role in
development through investment in other emerging market economies.”
Courtis
had a curious exchange with Putin during some of the economic forum
sessions in Beijing. He asked if Russia would provide North Korea
security guarantees if it agreed to renounce nuclear weapons.
Putin
replied in part: “Your question is too clever. This is not the moment
yet even to raise that question, let alone answer it. Often, the problem
in the world is not that small countries, who feel they are under
siege, are unwilling to change. Rather, it is that the bigger countries
are all piling on like bullies in the school yard – and they don’t know
when to stop.”
I
hope Kerry and Obama were listening at that moment. As Courtis heard
it, “I think Putin was signaling to the West that there will be no more
help from Russia with sanctions on North Korea, or anywhere else. One
could also read Iran, Syria, Venezuela, etc., into that line of
reasoning.”
I
agree. We can start to connect the stars, then, see our constellation,
and identify the costs of a consistent pattern of destructive behavior
on Washington’s part here, there and everywhere. Specific to the case,
the Sino-Russian energy deals cannot possibly be taken as other than
long-term responses to the West’s renewal of Cold War hostilities toward
Russia and its refusal to countenance China’s emergence. More narrowly,
Putin wants an Iran deal to demonstrate Russia’s importance as a global
player, yes, but he is not so far from fed up even there.
The
obvious question is what we are watching as all these events unfold and
then coalesce into a single reality. This peculiar moment seems to make
this reality clear. Nostalgic for the period of primacy known as the
American Century, the U.S. cannot accept its passing. Logically enough,
the task becomes essentially destructive of the world as it is a-borning
— an effort, in the end, to destroy history itself.
The
planet’s other major powers, for all their imperfections and, indeed,
disgraces, understand that their time has come, parity between West and
non-West is upon us. This is the core reality, not to be lost sight of.
China’s and Russia’s domestic problems are rather like America’s; they
are to be resolved by Chinese, Russians and Americans, a point we
understand easily when it comes to the interference of others but not
the other way around, when the question is our interference elsewhere.
All
too bad. But only for those who insist on holding on to the wrong end
of the stick. This century’s winners and losers are not yet clearly
marked — I have to preserve my optimism on this point — but with each
passing event, each mistake, who is fated for which side becomes a
little more evident.
I
like the thought a Chinese scholar-turned-diplomat-turned scholar again
made at a dinner in Beijing the other night, as passed on by a friend.
He spoke of Ukraine, but the remark applies across the board.
“From
our perspective, we see all of this agitation as noise at the surface,”
he said. Then he cited that scene from “Macbeth” at Dunsinane Castle,
“Life’s but a walking shadow, a poor player that struts and frets his
hour upon the stage, and then is heard no more. It is a tale told by an
idiot, full of sound and fury, signifying nothing.”
The Chinese — always attuned to the long view. Who are the idiots in this man’s rendering?I leave it there.
Patrick Smith is the author of “Time No Longer: Americans After the American Century.” He was
the International Herald Tribune’s bureau chief in Hong Kong and then
Tokyo from 1985 to 1992. During this time he also wrote “Letter from
Tokyo” for the New Yorker. He is the author of four previous books and
has contributed frequently to the New York Times, the Nation, the
Washington Quarterly, and other publications. Follow him on Twitter, @thefloutist.
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