Posted on 11/19/2004 7:34:07 PM PST by demlosers
China's insatiable demand for energy is prompting fears of financial and diplomatic collisions around the globe as it seeks reliable supplies of oil from as far away as Brazil and Sudan.
An intrusion into Japanese territorial waters by a Chinese nuclear submarine last week and a trade deal with Brazil are the latest apparently unconnected consequences of China's soaring economic growth.
The connection, however, lies in an order issued last year by President Hu Jintao to seek secure oil supplies abroad – preferably ones which could not be stopped by America in case of conflict over Taiwan.
The submarine incident was put down to a "technical error" by the Chinese government, which apologised to Japan.
But even before the incident the People's Daily, the government mouthpiece, had commented that competition over the East China Sea between the two countries was "only a prelude of the game between China and Japan in the arena of international energy".
The Brazil trade deal included funding for a joint oil-drilling and pipeline programme at a cost that experts said would add up to three times the cost of simply buying oil on the market.
The West, however, has paid little attention to these developments. For the United States and Europe are far more concerned with the even more sensitive issues of China's relations with "pariah states".
In September, China threatened to veto any move to impose sanctions on Sudan over the atrocities in Darfur. It has invested $3 billion in the African country's oil industry, which supplies it with seven per cent of its needs.
Then, this month, it said that it opposed moves to refer Iran's nuclear stand-off with the International Atomic Energy Agency to the United Nations Security Council.
A week before, China's second biggest state oil firm had signed a $70 billion deal for oilfield and natural gas development with Iran, which already supplies 13 per cent of China's needs.
China has its own reserves of oil and natural gas and once was a net oil exporter. But as its economy has expanded by an average of nine per cent per year for the last two decades, so has its demand for energy.
This year it overtook Japan as the world's second largest consumer of energy, behind the US.
Its projected demand, boosted by a huge rise in car ownership as well as the need to find alternatives to polluting coal for electricity generation, has contributed to the surge in the price of oil this year. Shortages are already leading to power cuts in the big cities.
Since President Hu ordered state-owned oil firms to "go abroad" to ensure supply, they have begun drilling for gas in the East China Sea, just west of the line that Japan regards as its border.
Japan protested, to no avail, that the project should be a joint one.
The two are also set to clash over Russia's oil wealth. China is furious that Japan has outbid it in their battle to determine the route of the pipeline that Russia intends to build to the Far East.
Japan favoured a route to the sea, enabling oil to be shipped to both Japan and China. China wanted an overland route through its own territory, which would give it ultimate control if hostilities broke out.
Increasingly, analysts are saying that China's efforts have gone beyond what is safe or even in its own interests.
Claude Mandil, the executive director of the International Energy Agency in Paris, said the reserves in the East China Sea were hardly worth the trouble.
"Nobody thinks that there will be a lot of oil and gas in this part of the world," he said.
"It may be a difficult political issue but I don't think the energy content is worthwhile."
Eurasia Group, a New York-based firm of political analysts, said its oil experts worked out that China was paying such an inflated price for its investment in Brazil that the cost for the oil it ended up with was three times the market price.
"If China's economy falters, which, in my view, appears increasingly likely, then commodity prices will plummet, and with them, the value of the assets that produce them," Jason Kindopp, Eurasia's lead China analyst, said.
"Beijing may end up in a early 1990s Japan situation, where it is forced to sell recently purchased overseas assets for a fraction of what it paid for them."
China's wider aggression to secure oil and gas was the greatest threat to its international standing in the next decade.
"Sudan is the primary example," he said.
"It marks the first time in recent years that China has promised to wield its veto power in the UN Security Council against a petition initiated by the United States and backed by France and Great Britain."
I wonder what China has in mind for the long haul...
Unintended Consequences in the quest for ever-lower wage rates: China goes from a sleepy agricultural economy to an industrial giant, benefitting 1000 executives in 100 U.S. companies. But now they are competing for energy, which increases the price. You can add steel and aluminum to the list. Before long, prices will go back up to where they were when Americans were making the products, but the market will still be controlled by Chinese. And the benefit is...?
PRC signed an agreement with Argentina last few days. I'll get the FR link in a second.
That really is logical thinking, however, when has the PRC EVER been logical?
The connection, however, lies in an order issued last year by President Hu Jintao to seek secure oil supplies abroad – preferably ones which could not be stopped by America in case of conflict over Taiwan.
There are no secure oil supplies abroad that America could not interdict.
China is an enemy of America. It bears remembering.
Steel yourself for price of stainless
By Paul Glader, The Wall Street Journal
The stainless-steel kitchen is getting pricier, as rising wholesale stainless prices boost the cost of refrigerators, stoves and other appliances.
The price of stainless steel has risen as much as 60 percent in the past year, reflecting a shortage worldwide due in large part to demand for the metal in fast-growing China.
Paul Leuthe, corporate marketing manager for Madison, Wis.-based Sub-Zero, says metal prices are driving up the company's costs.
To lure cost-conscious customers, some appliance makers are introducing similar-looking products made with cheaper materials, from aluminum to lower-grade steel painted in colors like "meteorite," and even plastic that looks like stainless steel. Others are including less stainless in their products. Meanwhile, to justify the premium prices of the real thing, some retailers are aiming to make better grades of stainless a selling point, the way bedding makers pitch 400-thread-count sheets.
The goal: to keep the lucrative stainless-kitchen craze going. The stainless look has been a huge boon for appliance makers, becoming a staple of high-end kitchens in recent years. Stainless steel, which consists of traditional carbon steel mixed with at least 11 percent chromium and often nickel, is shinier than traditional steel, doesn't corrode as easily and has a neutral hue that easily matches floors, cupboards and walls.
Kitchen designer Boffi says 25 percent of the kitchens the company does are either completely stainless or have a large percentage of products and materials in stainless.
As an appliance metal, stainless isn't without its flaws: It smudges and can be prone to scratch marks. Moreover, stainless isn't magnetic, which means parents can't easily put drawings, notes or photos on the front of their refrigerator.
With the economy showing signs of improvement, demand for stainless-steel appliances remains strong, despite the higher prices. Sales of major home kitchen appliances are up about 30 percent this year from 2001 levels, according to the Association of Home Appliance Manufacturers.
To convince shoppers that the real thing is worth paying for, some industry observers expect companies to begin trying to increase awareness of stainless-steel grades. The idea is for consumers to discuss the nickel count of their refrigerator over cocktails, just as they do bed-sheet thread counts.
Stainless steel comes in varying degrees of nickel content and other alloying materials. At this point, retailers outside of the restaurant-products industry don't promote the distinction, except in cookware and the occasional range hood or work table.
Bump ... This needs to be read by everyone ... especially
the brilliant minds at CATO.
Bump.
Ping.
FYI
China asks Southeast Asian nations to cooperate in tapping oil
Nov 18, 2004 05:23:00 PM
Anil K Joseph
Beijing, Nov 18 (PTI) China, which is facing an energy crunch, today urged Vietnam and other Southeast Asian nations to agree for "joint development" of the disputed South China Sea area so as to tap the unexploited natural resources there, including oil and gas.
"We are ready to conduct cooperation with other countries, including Vietnam in ASEAN on the basis of mutual respect, equality and mutual benefit. We should actively explore how to conduct joint development work in the disputed waters of the South China Sea," Chinese Foreign Ministry spokeswoman Zhang Qiyue said.
Brushing aside Vietnam's reported protest against a recent bilateral agreement between China and the Philippines to explore oil around the Spratlys in the South China Sea area, Zhang said the pact was in conformity with the code of conduct signed between China and other members of the Association of Southeast Asian Nations (ASEAN) in 2002.
"It is true that China and the Philippines signed an oil cooperation agreement on jointly developing the seismic survey work in the region. The purpose of this agreement is to study and assess the oil and energy in the region," Zhang said.
"It is actually an important move for the two countries to implement the principles in the code of conduct of all the parties in the declaration of the South China Sea," she said. PTI
I remember seen somewhere that if everyone want a living
standard equivalent to Europe, we need an additional three earth.
Let's all praise Nixon for going to China. And Kissinger, too. They should have read Napolean's warning.
Patriots FYI ping.
Gotta get that energy somewhere to make all that crap that Walmart sells to us. {/irony}
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