An almost unnoticed geopolitical event in the last 18 months is the strengthening ties between China, Russia and Iran. This significant shift is the direct result of the implementation of the Bush administrations unilateralist foreign policy.
Chinas premier, Wen Jiabao, visited Moscow in September of last year. In October 2004, Russian President Vladimir Putin paid a visit to Beijing. At that meeting, both leaders stated Sino-Russian relations had reached unparalleled heights.
Asia Times reported the two men announced resolution of border disputes between the two countries and a plan to hold joint military exercises this year. These would be the first large exercises of this type between the two nations since 1958.
The exercises herald a quickly expanding arms trade between Russia and China. Last year, China reportedly signed deals with the Russians for more than $2 billion in arms, including warships and submarines, missile systems and aircraft. The director of Russias armed forces, Anatoliy Kvashnin, said: Our defense industrial complex is working for this country [China], supplying the latest models of arms and military equipment, which the Russian army does not have.
Trade has not been limited to military goods. In the past five years, non-military exchanges have grown at an annual rate of almost 20 percent. It is expected this kind of trade will reach $60 billion by 2010, up from $200 billion in 2004.
While China has been better arming itself, it also has been busy securing sources of energy to meet future needs. Early this year, Moscow agreed to more than double electricity exports to China to 800 million kilowatt hours by next year.
Last year, Chinas National Petroleum Corp. and Russias Gazprom [gas company] signed a series of agreements on finding ways to best supply China with natural gas. Russia, at the same time, signed agreements to furnish China with specific oil exports.
Asia Times said Russian oil exports to China are expected to reach 10 million tons this year and rise to 15 million tons next year. All of this oil will be shipped by rail. Meantime, talks continued about building a pipeline from Siberia to northern China. Moscow, in 2002, pledged $2 billion toward construction of a pipeline from the city of Angarsk in Siberia to Daqing in northeastern China.
In 2004, Russia announced that instead of extending into China, the new pipeline would end at Russias Pacific port of Nakhodka. Japan, which is desperate for an energy source, and wanted the pipeline precisely in that location, has offered to pay the estimated $10 billion plus cost of construction. The pipeline route will allow Moscow to keep full control of the oil flow as it will be entirely in Russian territory.
Though the pipeline will not go into China, it will pass within 40 miles of the Chinese border. That would allow a spur to be easily run into China without great expense. Annual oil flows are expected to top 80 million tons.
The Russian oil company Yukos was the only Russian company shipping oil to China. In 2004, the Russian government renationalized the company when it seized its primary production unit called Yuganskneftegaz, the No. 2 oil producer located in Siberia.
Roseneft, Russias state-owned oil company, bought that production company for $9.3 billion. In February of this year, it was disclosed that China had supplied $6 billion in financing for that purchase. The financing was secured by long-term oil contracts between Rosneft and the Chinese National Petroleum Corp. This was a very significant investment in Russias closely guarded oil sector.
The CNPC also is involved in several joint ventures with Russias state gas company, Gazprom. Included are projects to develop energy reserves in Iran, site of Chinas largest energy-related investments.
In March 2004, Zhuhai Zhenrong Corp., Chinas state-owned oil trading company, inked a 25-year contract to import 110 million tons of liquified natural gas [LNG]. An even bigger deal followed in October between another state-owned oil company in China and Iran. This $100 billion transaction permits China to import an additional 250 million tons of LNG from a major Iranian oilfield over 25 years. The agreement also furnishes China with 150,000 barrels of crude oil per day in the same period.
This deal will result in a second $100 billion investment by the Chinese in Iranian energy development over 25 years. These funds will finance exploration, drilling, and production plus investment in petrochemical and natural gas infrastructure.
China also has an oil source in Indonesia as well as in Africa, South America, and on the U.S. West Coast and is trying to make a deal for some Canadian oil as well. It also has some oil deposits along its own coast.
Both Moscow and Beijing have ignored U.S. laws and sanctions against Libya and Iran, which prohibit supplying sanctioned countries with weapons systems.
Both countries have furnished Iran with missiles and missile technology since the mid-1980s. China has sold Tehran surface-to-air cruise missiles and anti-ship missiles like the Silkworm. Russia has aided Iran in development of long-range missiles, including the Shihab-3 and Shihab-4 missiles with a range of 2,000 kilometers. Iran reportedly is developing missiles with ranges of 3,000 kilometers.
Late last year, former Secretary of State Colin Powell claimed Iran was attempting to adapt its long-range missiles to nuclear warheads. These developments make Israel very nervous because they are no longer in the ranks of the untouchables where missile attack is concerned.
Such sales are in violation of the U.S.-Iran Non-Proliferation Act of 2000. The law has done little to stop such dealings. In fact, the pace of missile acquisition and development by Iran has increased. Russias dealings with Iran also have sped up in the past 18 months. Besides increased investment in Iran, Russia has been heavily involved in building Irans infant nuclear energy industry.
Washington believes Iran is working to develop nuclear weapons with the aid of Russia, although evidence of an Iranian nuclear program is very skimpy.
China and Russia, of course, both support Irans nuclear energy program. President Putin said he is convinced Iran is not trying to develop nuclear weapons. Both countries oppose any UN action against Iran.
China, Russia and Iran are solidly aligned against U.S. foreign policy in the Mideast and Far East.
Chinas former foreign minister, Qian Qichen, writing in the China Daily, a state-controlled paper, declared: The United States has tightened its control of the Middle East, Central Asia, Southeast Asia and Northeast Asia.
Qian added that such control testifies that Washingtons anti-terror campaign has already gone beyond the scope of self-defense. Further, he said, The U.S. case in Iraq has caused the Muslim world and Arab countries to believe that the superpower already regards them as targets [for] its ambitious democratic reform program.
From the June 15-21, 2005, issue