Replies to post #4533 on Foreign Correspondence

[Amaunet]

Oil Denomination: The clash between United States and China starts

Jul 5 2005, 12:59 PM

The oil war is openly declared now and the world shall stand to witness it. In what seems to be the clash of China and the United States over Unocal is already having its impact felt all over the world. United States is a nation driven by the politics of oil and influence. The mammoth growth of China is a reality and for the first time China is directly contesting America ’s sphere of influence all over the world.

With oil prices touching record high of 60 dollars per barrel the war is likely to intensify if anything else. But one must not forget that the United States is in complete control of Iraq and still exercises a considerable degree of influence over Kuwait and other oil-rich gulf nations. Similarly America is trying to exert its presence and influence in Central Asia much to the agony of both China and Russia . The war is clearly not for the present but for the future. Before we can understand India ’s role in this war, it is important to observe the oil politics in the world.

China is hunting for oil; petroleum and LNG like a beleaguered dragon looking for a future treat due to its ever increasing domestic demand and surging export volumes. So much so that it has tied up with Russia , Nigeria and other much OPEC nations to ensure continuity of its oil supplies. China is actively engaging with the Latin American countries cutting the American influence steadily. The rise of leftist governments in Latin America which are anti-America has made the situation a bit friendlier for China .

All this stems from the massive failure of the “Washington Consensus” and success of the “Beijing Consensus”. The Latin American countries are increasingly looking up to China to replicate its model of growth and success while defying America and its monopoly over the affairs of world bodies like the World Bank and IMF. While China has made impressive gains in Latin America and Africa, the Unites States is making deep inroads in Central Asia while holding on to the Gulf states.

America ’s rigid attitude in granting aid to the starved states in Africa is proving to be a blessing for China . The G-8 summit which is to be held soon in Scotland is going to be a dramatic one especially since Britain which recognizes the need to maintain influence in Africa is willing to walk another mile to help the poor countries in Africa while America is not in favor of any such moves. This gives an opportunity to China to make its way through with ease and America stupidly yet merrily willing to hand over the mantle.

Central Asia is the current hotspot where the great game is being played. Russia and China have tried to dig in their heels with the Shanghai – 6 (SCO) while America is conveniently supporting regime change overthrowing governments considered friendly to China and Russia. It is still not certain who will win the great game in Central Asia for other players such as India have not thrown their weight among any of the contesting players as yet. China has even signed multi-lateral agreements with Russia stepping up the ante for continuous supplies in the foreseeable future.

India too is taking a very active part of this great game. India started with the Indo-Iran gas pipeline which has been in the reckoning for as long as one can remember but is finally seeing some light of the day. While India-Pakistan and Iran have formed an axis for this pipeline major hurdles still remain. America is threatening sanctions on Pakistan and using pressure tactics to which Pakistan can give in anytime keeping in mind the huge amount of aid it receives from the United States .

The proposed pipeline has to run through regions where exiled Taliban commandos are still very much in control. Safety and security are likely to be a major concerns keeping in mind the terrain through which the pipeline has to come. The emergence of a hardliner as Iran ’s new President may actually force America to rethink its policy on Iran and step up efforts for taking action on Iran . The new Iranian President has already antagonized the United States by declaring that Iran will now more actively pursue its nuclear programme.

The recently concluded visit of Indian Petroleum Minister to Azerbaijan was an effort in the direction of exploring the oil-rich region of Caspian Sea . This project too has its shares of difficulties and problems since India wants to send the oil through ships by loading them on an Israeli port which might not sound music to the ears of the Arab nations including Azerbaijan . India has tried to capitalize on its influence in the Central Asia Republics and for the first time India is being invited as an observer to the meeting of the Shanghai 6 (SCO) to be held very soon.

India is even exploring the option of Indo-Iran pipeline stretching to include China in order to neutralize American pressure on Pakistan . China has good relations with Iran and will be more than glad to have a piece of the pie thereby creating a win-win situation. With China ’s presence in the project America is likely to chew a stale gum and be left fuming. India has made good gains in Africa but not at par with what China has achieved. India is far behind in Latin-America and that is one region where Indian policy makers need to concentrate on.

Similarly Indonesia , Asia’s only OPEC producer needs investment for its oil projects, India should take this opportunity and grab a big share before China or the United States come in. Thus the new age war for oil between United States and China is openly declared with the instance of CNOOC’s all cash bid for America’s ninth largest oil company “Unocal” for a sum of 20 billion dollars. Unocal has gas and oil reserves in Thailand , Indonesia and Central Asia . It has more than 6,000 employees, with most of its activities in Asia and North America and has no refining or marketing operations.

CNOOC, a Chinese state enterprise is the third largest oil group in China and has a market value of about 22.5 billion dollars. CNOOC beat America ’s Chevron Corp's 16 billion dollars takeover offer for Unocal. In April 2005 CNOOC even acquired 16.69 percent stake of MEG Corp., Canada based oil and Gas Company. CNOOC’s bid for Unocal left the American policy makers stunned and baffled. After all it is for the first time that the Chinese have opened up a new oil battle on American soil for an American oil company. As many as 40 US Congressmen have cited this as a matter of national security thereby urging to stop Unocal’s takeover by CNOOC.

The U.S House of Representatives have even passed measures to block and scrutinize CNOOC’s bid for Unocal. A number of lawmakers both from the Democratic and the Republican sides have been pushing U.S President George Bush and Treasury Secretary to initiate a thorough investigation into the bid. While the final decision on Unocal lies in the hands of its shareholders it is likely that the political groups will actually have the final say. There are desperate attempts being made to stop CNOOC’s takeover bid. In the meantime representatives of CNOOC are in the U.S trying to push for the takeover of Unocal. It remains to be seen how this drama will end.

CNOOC's bid for Unocal puts the world on notice that China is ready to go head-to-head with oil-industry giants in a worldwide scramble for energy. While the American lawmakers and experts are frantically trying to stop CNOOC, the Chinese government is having a hearty laugh on putting the Americans in a tight spot. The game for oil among the new players has just begun and this seems to be the first chapter. India for its part too could be an important player in this oil game but how well it plays its part will decide the fate of India .

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[Amaunet]

China Aims Spy Network At Trade Secrets In Europe


The strongest complaints about Chinese spying have emerged in America. David Szady, the chief of FBI counter-intelligence operations, has said that China is rapidly eroding America's technological superiority: "I think you see it where something that would normally take 10 years to develop takes them two or three."

-Am


'Defector' Reveals Beijing's Plan To Use Espionage To
Achieve Its Objective Of Commercial Dominance
By Damien McElroy
The Telegraph - UK
7-3-5

A network of Chinese industrial spies has been established across Europe as the Communist government's intelligence agencies shift their resources and attention from traditional Cold War espionage towards new forms of subterfuge aimed at achieving global commercial dominance.

The extent of the spying was laid bare after a leading Chinese agent "defected" in Belgium. The agent, who has worked in European universities and companies for more than 10 years, has given the Sûreté de l'Etat, the Belgian equivalent of MI5, detailed information on hundreds of Chinese spies working at various levels of European industry.

With the number of Chinese entering Europe about to increase as Beijing relaxes travel restrictions, Western intelligence agencies fear that the spying will be even more difficult to combat. Britain is likely to be one of the countries where significant infiltration is planned.

"There is a large Chinese intelligence operation in northern Europe spanning communications, space, defence, chemicals and heavy industries," said Claude Monique, a Brussels-based intelligence analyst.

"The Chinese agent has given details of hundreds of experts and their activities. As a result national inquiries have been launched, certainly by the German, French, Netherlands and Belgian agencies and, I believe, in Britain too."

A former British official, who runs a private consultancy specialising in fraud and risk management in Beijing, said that the Ministry of State Security systematically extracted the information it wanted from Chinese people travelling aboard, including tourists, businessmen and scientists.

"Any ethnic Chinese with relatives or business interests in China is vulnerable," he said. "There are a large number of people who live at or travel to key locations who are regularly debriefed or given orders to obtain various types of strategic information that Beijing finds is militarily or economically useful.

"Traditionally, the Chinese who went abroad since the late 1970s for trade or study purposes were in businesses controlled by the state. That apparatus of spying has grown over time as Chinese ambitions have risen."

Visa regulations easing restrictions on Chinese tourism have recently come into force in the UK, as well as continental Europe, and attempts to monitor travellers' activities and telephone calls are at risk of being overwhelmed. A spokesman for the security services said that Chinese spying already represented a significant intelligence challenge that mirrored the threat previously posed by Russian agents.

The defector making the allegations of spying in Belgium has refused to come forward in public because he has not yet received political asylum. He is described by Western intelligence officials as a leading figure in the Chinese Students and Scholars' Association of Leuven, an alleged front organisation based in a Belgian university town that co-ordinated industrial espionage activities across Europe.

According to an intelligence official, the association enabled Beijing's Ministry of State Security to maintain contact with a wide spectrum of Chinese citizens living across the continent: "The Chinese operate at many levels, from the pure intelligence agents based at embassies to researchers sent to Europe for training to individual citizens who work apparently independently for five or 10 years until they are in a position to prove their usefulness."

Among the companies targeted by the Chinese network, according to Belgian officials, is the French communications company Alcatel. It is contracted to build the ·1 billion (£676m) Galileo satellite communications system that European leaders have promoted as a rival to the American Global Positioning System, which has a monopoly of satellite communications systems.

The Western intelligence official said that China had been brought in as an official partner on the technology, largely because its successful espionage made it futile to keep Beijing out.

The strongest complaints about Chinese spying have emerged in America. David Szady, the chief of FBI counter-intelligence operations, has said that China is rapidly eroding America's technological superiority: "I think you see it where something that would normally take 10 years to develop takes them two or three.

"What they are looking for are the systems or materials or the designs or the batteries or the air-conditioning or the things that make that thing tick," he said. "That's what they are very good at collecting, going after both the private sector, the industrial complexes, as well as the colleges and universities in collecting scientific developments that they need."

A recent report to the American House of Representatives listed 16 "remarkable" Chinese technological breakthroughs that could have been achieved only by industrial espionage. These included a supercomputer that runs at speeds previously achieved only by America and Japan. Sophisticated communications systems, advanced satellite technology and advances in nano-technology were also identified as suspect in the report.

Among recent Chinese military advances, which experts believe increase Beijing's military strength in the sensitive Taiwan Strait, is a new cruise missile copy of America's Tomahawk weapon and a sea-borne defence system based on stolen Aegis system blueprints.

A Chinese adage holds that one good spy is worth 10,000 men. As China strives to displace America and Europe as a global economic powers, that ancient insight could help propel the country to new economic heights.

© Copyright of Telegraph Group Limited 2005.

http://telegraph.co.uk/