China Dumps Dollars for Oil and Gold: They are Now Strategic Competitors!

China Dumps Dollars for Oil and Gold
by T. Stein / S. McIntyre
PM

China, which President Bush has called a "strategic competitor", will see its demand for industrial energy more than double over the next 15 years. China's electricity demand has doubled within the last decade and is likely to quadruple by 2019. Could China's recent shenanigans in the region be a small baby step for an energy-hungry power getting restless?

As can be seen from the chart above, China was a net exporter of oil until about ten years ago. Today, China is the world's #3 consumer of oil behind the United States and Japan. Given its population and need for infrastructure, we can confidently predict that China will sooner or later overtake both nations and become the world's leading importer of oil, bringing it into conflict with the developed world.

China has already invested billions of dollars into pipeline projects in Central Asia and the Middle East and has strengthened its relationships with governments from energy-rich states. For example, China is Sudan's largest trading partner and the most important foreign investor in Sudan's oil industry. China National Petroleum Corporation has a 40% stake in the international consortium extracting oil in Sudan, and it is constructing refineries and pipelines, enabling Sudan to benefit from oil export revenue over the last five years. Recently, China deployed thousands of troops to Southern Sudan to protect its pipeline interests while Western oil companies have been withdrawing from the war-torn African nation. Sudan has been accused of using its oil revenue to purchase arms for its wars against its black African population in its Darfur region. In a classic example of realpolitik, China has threatened to veto a resolution that would consider U.N. sanctions against Sudan's oil industry if Khartoum does not stop the genocide. Could Chinese PLA troops in Sudan be a first step in China's growing expansionism throughout Eurasia?

Like Britain a century ago, the United States has greatly over-borrowed in an effort to control access to the world's energy supply and at the same keep its domestic economy firing on all cylinders. As competition for diminishing oil resources threatens U.S. dollar hegemony over world oil transactions, expect to see increased Chinese political and military presence in the Middle East. The presence of Chinese PLA troops in Sudan, in our opinion, marks the middle kingdom's entrance into the great game. China's next move could come in the form of massive dollar devaluation when they decide to unload their supply of accumulated greenbacks. China just recently released six billion of those greenbacks for its purchase of Noranda Mining - Canada's biggest mining company. Keep your eyes open for stepped-up greenback dumping by China in exchange for natural resources such as oil-bearing properties or perhaps more mines. We predict that in the near future, Saudi princes will decide to denominate some of their oil transactions in Yuan (or at least something other than dollars) and invest their profits into shares of China Mobile or PetroChina instead of Citigroup.

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China Puts 700,000 Troops on Alert in Sudan
NewsMax.com
Sunday, Aug. 27, 2000
In a stunning revelation, London's Sunday Telegraph is reporting in today's editions that China has as many as 700,000 troops in the Sudan and is preparing to enter that country's civil war.
According to the British paper, for the past three years China has been bringing Chinese nationals into the Sudan by cargo jets and boats.
Ostensibly, the Chinese were to serve as guards at oil fields and facilities controlled by the China National Petroleum Corporation.
The introduction of Chinese troops comes in the wake of the military success of the Sudan People's Liberation Army (SPLA) headed by Col. Johnny Garang.
Garang's forces, largely Christian, have been battling Sudan's Islamic regime which controls the country's oil region in the Upper Nile.
SPLA troops are reported to be just 10 miles from these oil fields.
The Islamic regime has made an emergency request that China crush the SPLA forces and end the country 17-year-old civil war.
Oil production began in Sudan just last year, and since then arms have been flowing in from Libya, Qatar and China.
The Telegraph cites an internal document from the Sudanese military indicating that "as many as 700,000 Chinese security personnel were available for action."
Baroness Caroline Cox, the leading human rights activist for Christians in Sudan, criticized Western governments for their complacency and complicity.
She said: "If with foreign help the NIF regime crushes all opposition we will have entrenched in the heart of Africa a militant Islamist regime aimed at spreading terrorism throughout the continent. It's unbelievably serious for the future of democracy in Africa and could happen in the next few weeks."
British companies, and Canada's Talisman Energy, have joined the Chinese to help develop its oil production facilities and pipelines.
Human rights activists have criticized Western governments for backing the militant Islamic regime in Khartoum, one that has killed civilians to clear areas for oil production.
Christian groups have also publicized the regime's use of slavery.
China's involvement in the ongoing civil war may prove to be the most unusual twist, and may represent the largest movement of one army into another country that went completely undetected by other nations.
A Western aid worker in southern Sudan told the Telegraph, "Everyone knows what is going on. We've all seen the Chinese being brought in and can only pray about what's going to happen next."
The use of Chinese "workers" as a military force may raise serious concerns about the growing number of Chinese illegals detected in Central America and the Caribbean.
Chinese influence in Panama which controls the Panama Canal has already raised serious warning froms military experts, including Adm. Thomas Moorer, former chairman of the Joint Chiefs of Staff.
Read Christopher Ruddy's special report on China's new air and sea base just 60 miles from Florida in the Bahamas. Click Here to Read Report
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The article that you've just read was posted on Newsmax in 2000. The revelations are shocking, because nobody realizes that China has so many troops right on Egypt's border. Like the magician, who practices slight of hand, we're not keeping our eyes on the 'ball'. Or maybe we don't wish to even know that 700,000 troops are sitting in Sudan, protecting the Chinese oil supplies. Wake UP!
This is an economic war..................Be prepared, very prepared...........and if you're not prepared, then at least say "hello" to your new master, Mr. Wang!

The United States and China: Strategic Partners or Strategic Competitors?" -
Prof. David Shambaugh, November 19, 1999

by Edward Cunningham

(Yes, this is an old article) However, sometimes old articles have telling insights into the future.)

In an illuminating talk, Prof. Shambaugh criticized the bilateral use of the phrase "constructive, strategic partnership" in characterizing US-China relations into the new millennium, and effectively highlighted the most important aspects of the US strategic agenda for the near future. Arguing that in effect "strategic" is in many ways synonymous with "security," Prof. Shambaugh reasoned that the disparity in world-view and regional security goals between the two countries leads to a current relationship based on competition and not partnership. While competition needs not mean adversarial stances, the best that the two nations could hope for is to be future cooperative partners. Such status is still, however, a far cry from the strategic partnership identified by the current American and Chinese governments. Strategic concerns have been dominant, but not constant, throughout the Sino-US relationship since 1949. Prof. Shambaugh argued that the relationship has progressed from one of strategic adversaries in the 1950s and 1960s, to partners in the 1970s and 1980s, to competitors in the 1990s and on. The declining Soviet threat that served as the glue that brought the two nations together in the first place produced a need for the two countries to find a new strategic rationale for their relationship following Sino-Soviet détente in the late 1980s. They have had a difficult time establishing strategic commonality ever since. While both the US and the PRC knew that they collectively stood against the USSR, they now lack the vision to construct what they stood for in common. A long-term, stable bilateral relationship needs a strategic floor to under-gird dialogue and not allow other peripheral interests to dominate the relationship. In the current presidential campaign, Sino-American relations has been referred to by George W. Bush as one of strategic competition, while other Republicans use harsher language. Even former Clinton officials, such as Winston Lord, argue that the term should "be struck from the vocabulary of US-China relations." Prof. Shambaugh expressed that on an empirical basis, "strategic competitor" is indeed the better word for describing the PRC. However, he cautioned that competitor is distinct from the term "strategic rival" or "adversary." In his attempt to analyze the semantics of such terms, Prof. Shambaugh proposed a relationship continuum which progresses from "harmonious" on the left to "antagonistic" on the right and consists of six separate segments. Under the "harmonious" umbrella on the far left, one would have a fully institutionalized allied relationship. The next type of relationship, moving a notch to the right, would be a "strategic partnership," such as that shared between the US and France or the US and Singapore. Such a partnership would include extensive military training, intelligence sharing, a shared world-view, and similar political systems. Farther to the right and approaching the median of the continuum is a "cooperative partnership," which means a more limited cooperation level in certain defined areas without a strategic dimension. According to Prof. Shambaugh, this is the most Sino-US relations can hope to achieve, at least in the near future. Transcending the median and entering into the realm of antagonism, strategic competitors share some element of cooperation but are often troubled by strategic friction caused by differing views and national security interests. Shambaugh saw the current relationship between the two nations to lie somewhere within this range. Farther to the right, classic Cold War-style strategic adversaries/rivals define their opposite as an explicit strategic threat and devote resources (usually military) towards countering one another, continually contesting the other's attempt to expand their own sphere of influence. Finally, outright enemies harbor the potential for full-scale war. However, the current situation is not reminiscent of the Cold War, according to Professor Shambaugh. China lacks the desire, political influence, and the military power to contest the US globally. The PRC seeks a multi-polar world in which American hegemony is diluted and dissolved, viewing US hegemony as "the major threat to world peace." The US does not oppose the construction of a multi-polar world but speaks consistently of the importance of US leadership in such a world order. As a result, the US has been working to expand and strengthen bilateral and multilateral security alliances around the globe, while official Chinese policy calls for the abrogation of all such alliances. A prime example of the strategic disagreement between China and the US is their opposed views on the expansion of NATO and the five bilateral alliances maintained by the US in East Asia. China is especially opposed to the US-Japan Mutual Security Treaty. From the Chinese perspective, such international actions are mere relics of the Cold War and zero-sum in nature. It is further evident that the definition and goals of sovereignty in international security affairs, especially in regard to humanitarian interventionism, differ greatly between the two nations. Another significant security problem in the relationship is Taiwan. However, China's greatest discomfort is the US security architecture in the Pacific Region, i.e. the Five Alliances, possible TMD capability over Taiwan and Japan, as well as the over 100,000 troops stationed throughout the region. Of course, such concerns exist in addition to various peripheral clashes over non-strategic issues such as human rights, trade, China's political system and so on. There are, therefore, many elements of strategic competition within the relationship. The primary ones include the competition over the nature of the world in which we want to live, the role of sovereignty, the legitimacy of intervention, and the role of alliances. The above-stated friction is basic, not peripheral and is at the core of US-China relations and cannot be negotiated away. According to Shambaugh, we can anticipate increased friction over Taiwan, the issue of TMD and NMD, the US-Japan alliance, NATO activities, the US dual containment of Iran and Iraq, and other issues. Such a reality does not preclude cooperation, however. In terms of security, both nations are opposed to the proliferation of weapons of mass destruction and the means to deliver them to North Korea and South Asia. They also oppose chemical and biological warfare. In terms of "low security," they are united in fighting narcotics production and smuggling, organized crime, alien smuggling, and in engendering environmental security and economic security - particularly in the wake of the financial crisis. In short, the strategic ledger contains elements of both cooperation and competition. In light of these considerations, Prof. Shambaugh discussed the Sino-American strategic agenda for the near future. The first issue concerns Asian security: both nations seek peace and stability in the region, but they hold differing views of the sources of instability and stability and how to shape such a future. Maintaining peace in the Taiwan Strait is a commonality, as are restraining the nuclear capability of Pakistan and India, regulating the North Korea situation, and maintaining the freedom of navigation throughout the region, especially in the South China Sea. A related point concerns the US military posture in the region. The US regards such a presence as a deterrence to aggression in the Pacific Rim. China sees the maintenance of such forces as a tangible show of US willingness to interfere in international matters. Such a fundamental difference has the potential to worsen bilateral relations. China has to understand that the US is unlikely to withdraw from Asia and is in fact welcomed by other Asian nations. Another subject on the future strategic agenda should be China's own military development. While the US recognizes the PRC's legitimate right to modernize its military capabilities and the US worries little about the development of the Chinese military, save in ballistic missile development, it is an area ripe for discussion within the context of military-military exchanges. In more concrete terms, there is a need to create a dialogue between both sides at an operational officer level and to conduct visits to installations. Finally, nuclear arms control should loom large in future discussions. There has been good progress in counter-proliferation over the past few years; the issue now is how to move into strategic arms control dialogue and then bring the Chinese into bilateral or multilateral control talks. While the agenda discussed above offers several signposts of progress, the road ahead still requires intensified engagement. Despite the existence of numerous differences, the relationship between the US and the PRC enjoys the potential for constructive dialogue in a number of arenas. However, reality should not be ignored in an effort to force a strategic partnership, when in reality competitive forces are indeed molding the arena in which the two nations interact.

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This fact is sad, but true. The Chinese are still communists. Their mindset has really not changed that much since 1949. They are extremely patient, and skilled negotiators..........and there's over 1.2 billion of them. Iraq? Unfortunately, Iraq is an unpleasant diversion............you are being programmed.
And N. Korea? A Chinese puppet state. Like the uncontrollable pit bull, they do the growling, while the Chinese tug on a very short leash. N. Korea is a strategic Chinese asset.

'China deployed thousands of troops to Southern Sudan to protect its pipeline interests'

I remember reading this, and being amazed, back in 2000 but have not heard anything since. I passed it off as nonsense.

Is this new information?? 100,000 700,000 ?

All the oil is in the South of the country too if I'm not mistaken.

Yes, this is true. Do a search on Newsmax. This info will come up.

Here is the most telling quote from the article.

" China's greatest discomfort is the US security architecture in the Pacific Region, i.e. the Five Alliances, possible TMD capability over Taiwan and Japan, as well as the over 100,000 troops stationed throughout the region."

So one can now see that there is a giant, grand strategy that each side is employing. Now, if this scenario could be plugged into Revelations, all dots would be completed.

A Chinese puppet state. Like the uncontrollable pit bull, they do the growling, while the Chinese tug on a very short leash. N. Korea is a strategic Chinese asset.

A 'flat earth' statement.

NK growls on its 'short leash' and what happens? Aegis class cruisers start prowling the Sea of Japan , carrier battle groups start lurking just over the horizon, the Japanese start talking nukes and the spirit of the Samuri rises, and SE Asia goes apesh*t.

Strategic asset? Like Hell!

What the Chinese want is peace and tranquillity in SE Asia, so peaceful we and everybody else goes to sleep. Then they can move.

When people make 'flat earth' statements, I have to wonder about the rest of their expertise in 'geography'.

Troke, you are soooooooooooooooo very wrong. If a state like N. Korea were on the borders of the U.S. how long do you think it would last. Not too long.
Think about it. N. Korea gets to arm all the middleastern countries, and the Chinese can say, Oh, not me.........while they're sending all their manufactured goods to the U.S. Your statement about the Chinese wanting tranquility in Asia is also way off............they want to control all of Asia, and we are standing in their way. This is a game of hegemony and it's winner take all. You obviously aren't familiar with two faces of Chinese diplomacy. Mr. Good Guy, and Mr. N. Korea.

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Troke Said:
A Chinese puppet state. Like the uncontrollable pit bull, they do the growling, while the Chinese tug on a very short leash. N. Korea is a strategic Chinese asset.

A 'flat earth' statement.

NK growls on its 'short leash' and what happens? Aegis class cruisers start prowling the Sea of Japan , carrier battle groups start lurking just over the horizon, the Japanese start talking nukes and the spirit of the Samuri rises, and SE Asia goes apesh*t.

Strategic asset? Like Hell!

What the Chinese want is peace and tranquillity in SE Asia, so peaceful we and everybody else goes to sleep. Then they can move.

When people make 'flat earth' statements, I have to wonder about the rest of their expertise in 'geography'.

Troke
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I say let China police Sudan. Sudan needs it very badly. Especially with the 1000 to 5000 Christians being slaughtered every month,...actually, I wonder who they will help? Christians or the Muslims?

Your statement about the Chinese wanting tranquility in Asia is also way off............they want to control all of Asia, and we are standing in their way

And the way to do that it to have NK agitate so our attention is drawn to the area? You sound like one of the current geniuses in our WH.

My scenario: Again, peace and quiet in SE Asia. We go to sleep, everybody else goes to sleep and the Chinese Tiger moves in under the somulence.

By the time everybody wakes up....tooooooooooooo late!

Your scenario; Beat the war drums, agitate, agitate, agitate, get everybody in an uproar, Japan goes nuke, maybe Taiwan too, US battle groups stack up three deep in the western Pacific.

Don't you think that is a tad counter-productive to Chinese goals? I sure do.

There were rumblings last week about Russia dropping the dollar. Saw something here earlier today about Cuba diminishing its support too.

Troke:

I'm not a war monger..........I actually hate the concept of war. However, most wars (not all) are preceeded by a few rounds of economic shocks to one or both countries involved. War is of course, the last resort......but IMHO, what we are
fighting for is simple. Who is going to be the economic powerhouse in the 21st century.........China or the U.S. Presently, the U.S. has the military advantage, since our technology is better than the Chinese. However, they are constantly probing us, stealing our technology, and causing economic duress to America's corporations. .
The Chinese would love the U.S. to collapse slowly. That would give them the needed natural resources for their huge population to survive....and if the dollar keeps on losing its value, we won't be able to afford these resources, such as oil. First, however, the Chinese must dump our currency, and diverge their markets. Also, they must shift more to a war economy, since their population needs to be controlled. If you think I'm wrong, be patient-watch these guys in action. They are very clever,smart, and industrious. Their culture has been around for 4000 years........and generally speaking, the Chinese of a few hundred years ago considered all outsiders barbarians. If we don't watch out,
these guys will 'eat our lunch'. They wish to have all of Asia, including the Philippines as their sphere of influence. They're already moving into the Spratleys.
Remember, it's not what we know, or hear that's as important as what we don't know, or don't hear.

I'm not a war monger..........I actually hate the concept of war

Well, I was being opaque, as usual. I meant that you were arguing that it was Chinese policy to have NK beat the war drums. My view is that would be very counter-productive to Chinese goals, which among other things, is to get us out of Asia.

And the quickest way to do that is to convince everybody there is no menace on the Asian mainland.

Which leads to my position that in the long run (and not too long now) NK is China's problem, not ours.

Now if China can get us to do what the Cultural Left wants; pay tribute to NK on a unilateral basis thus causing the US to lose face big time in Asia, good deal for China.

So far, we have avoided that. Multilateral 'assistance' OK, unilateral tribute not.