Author: Helena

I’ve been thinking more about the recent announcements of massive new Chinese investments in both Afghanistan and Iraq. These announcements really do signal the beginning of a completely new phase in international affairs: the phase in which China, cautiously, steps in to start cleaning up the mess created in these crucial world areas by the reckless policy of the late-phase American empire, and thereby becomes a significant power in its own right in both Central Asia and the Persian Gulf.
From one perspective, these two large Chinese investments– $3.5 billion to develop Afghanistan’s Aynak copper field and $3 billion to help develop a new oil-field in Iraq– might be seen as driven simply by China’s need for increased access to the resources in question. But nothing is that simple. Oil and copper resources can be developed in many places around the world.
By making these massive investments in these two countries China is also quietly signaling that when the international community becomes involved– as certainly, sooner or later, it must– in the search for a broad and effective resolution of the thorny challenges they pose, Beijing will be occupying a substantial seat at that table.
I’ve been trying to get some figures to indicate what proportion of the new external investment in each of these two countries, these Chinese deals represent. It’s been really hard, because there really hasn’t been much external investment on any similar scale, in either of them, at all.
Regarding Afghanistan, in this March 2008 study (PDF) Oxfam’s Matt Waldman wrote (p.3) that since 2001, “Just $15 billion in aid has so far been spent, of which it is estimated a staggering 40% has returned to donor countries in corporate profits and consultant salaries.” So over seven years, about $9 billion in external non-military aid of all kinds– relief, reconstruction, and ‘development’– has ended up being disbursed inside the country. That’s about $1.29 billion per year.
Interestingly, the table on p.27 of that PDF indicates that China has disbursed $41 million of official development aid in that period, and has pledged to disburse a further $84.15 million by February 2011. Compared with all those figures, for China to sink $3.5 billion into development of the copper field– and the associated power plant and rail line– will be HUGE.
How much of the $3.5 billion will go into paying and training Afghan workers, and buying goods from Afghan sub-contractors– and thereby, help to stimulate the Afghan economy directly, long before the first copper ingot is pressed? This is a crucial question, that I hope the Chinese get right. (In many places where China does development projects, they do them on a turnkey basis that by all accounts is incredibly impressive and efficient, but that does almost nothing to provide livelihoods and training to indigenes of the countries concerned.)
… In Iraq, the general picture– and the associated concerns about the design and local economic effects of the project– are broadly similar. (Though, since Iraq already has a massive labor-pool of highly trained oil technicians, engineers, and administrators, the training needs will be completely different, though the livelihood-provision needs are equally important.)
I looked for information about external investments of all kinds in non-military projects in Iraq, and that was hard to find and quantify, too. However, this website for the “International Reconstruction Fund Facility for Iraq” proudly (or not) notes that “So far 25 donors have committed about $1.84 billion to the Facility.” IRFFI, as it is known, is a collaboration between the World Bank, the UN, and the Government of Iraq.
In the cancer-like proliferation of different agencies, “facilities”, and the like that have grown up around the US-led project to “reconstruct” (or deconstruct) Iraq, there is also something called the “International Compact for Iraq”, run by the Swedish government but including, I think many of the same people who contribute to IRFFI. (Do they get double credit for their “donations”, I wonder?)
China is not recorded as a donor on this IRFFI list of (small-bucks) donors.
If you want to see how mind-bogglingly bureaucratic, goobledy-gookish, and colonialist the ICI seems to be, look at pages like this (PDF) one on their website. Your eyes will glaze over, guaranteed.
Okay, back to China. Evidently these two new investments are a huge deal for the two countries being invested in. And certainly not solely at the economic level.
Think about the challenges the Chinese engineers will face in Afghanistan. Not just the technical (and environmental-protection) challenges, which are huge enough. But also the political and security challenges. Some of these are described in the well-reported Eurasianet article by Ron Synovitz linked to above.
This article by Times Online’s Jeremy Page is also informative. He writes, intriguingly,

It was here, in the Aynak valley, that al-Qaeda trained and planned for the 9/11 attacks that triggered the US-led invasion of Afghanistan in 2001. And it is here, seven years on, that Afghanistan – with the help of British geologists and a Chinese mining company – will lay the foundations of a new economy in the next few weeks…

Aynak, Ground Zero for major geopolitical change. Who knew?
Aynak is a valley that, according to my Google map is, located a lot closer to Kandahar than to Kabul (which was what Page had written…. On the other hand, he was writing from there, so I guess he must know?) If the Chinese really are also going to build a rail line that comes from western China, through Tajikstan, down through Afghanistan (including Aynak,) and through Pakistan to Karachi, then that is extremely significant.
I think the China-Tajikstan connector is already underway…
But the whole project, when completed, will have huge benefits:

* for China, in its continuing drive to bring economic development to its far-west regions,
* for Tajikstan and the other landlocked former-Soviet Stans, who have pretty good Soviet-era railway systems– but so far, most of them connect to the outside world only through Russia. This new connector would give them new outlets, to both China and the Arabian Sea.
* for Pakistan, which gets access to a whole new hinterland and trading bloc there in Stanistan, and finally–
* for Afghanistan, which gets its first ever long distance rail line— and one that connects, moreover, to such a lot of other interesting and potentially lucrative places. It also thereby gets a way to start exporting not just the massive amounts of copper said to exist in Aynak but all the rest of its currently barely scratched-at wealth of mineral resources.

Win-win-win all round, I’d say. And not just because I’m a committed ferrophile.
But — and this is a huge but– how can the security of the people who work on these projects in Afghanistan be assured? All the more pressing of a question since the Aynak-Karachi segment of the line will have to pass through some prime Taleban heartland.
Worth noting that China has always had considerable influence in Pakistan. If (or as) it goes ahead with the whole Aynak project, the task of steering the Pakistani state off its current path toward implosion will be very important indeed.
Anyway, security. That has been the biggest problem for all the (admittedly much smaller scale) “development” projects that the US and its allies have tried to launch during the lengthy and crushingly unsuccessful years of occupation — in Afghanistan, as in Iraq.
Obviously, the Chinese must be discussing this exact question with the Afghan government. It is probably a huge advantage to the Chinese that they are not Americans, and not associated with NATO. On the other hand, Beijing does have its own considerable problems with hard-line Islamists among its citizens, who almost certainly have some connections with counterparts in Afghan movements, including the Taleban. So the Chinese security experts will have to work closely with the Afghan authorities to craft a plan that avoids arousing the opposition of the Taleban— or perhaps, that even cuts them into the deal in some way?
Karzai has been known in the past to have favored using some form of ‘big-tent’ approach to reaching out to the Taleban, though until now, his suggestions to that end have all been firmly squashed by the Americans.
Maybe now, with this Chinese deal in hand, he can have more ability to stand up to the Americans and do what he thinks is best for his country?
One thing seems certain, though. The Chinese will most likely be very wary indeed of having the US Special Forces “terrorist killers” (or baby-killers, depending who you believe) operating anywhere near their worksites. So Karzai will have to start constricting the Special Forces’ areas of operations considerably, once the project gets underway. (Or, boot ’em out of the country completely. Probably the best solution all round.)
NATO? Well, perhaps the Chinese and Afghan security people could hire them to provide some security services. (!) Who knows?
… Similar socio-political and security considerations may well come into play with regard to China’s new investment in southern Iraq. More on that, later.
But for now, suffice it to say that while most Americans have been looking at the minutiae of the “game” of US presidential politics, the world outside our borders has been undergoing rapid shifts. And not just (indeed, not even mainly) in Georgia.
No, the biggest shifts have been those announced not with the rumbling of Georgian and Russian tanks but with the quiet signatures of Chinese business executives, bankers, and government officials on these massive contracts with two governments that the US itself created, from scratch, and put into power by force.
If these deals go ahead as Beijing plans (and hard to see what can stop them now?) then vroom, Central Asia and the Persian Gulf: things will be changing fast in both strategic regions, over the five years that lie ahead!
… And the air will also thereby be let out of the over-inflated balloon of America’s global control-system. We Americans can return to being a normal– hopefully friendly– nation among nations rather than trying to control and dominate everyone else around the world. And here’s the most important point: This transformation has a good chance of being achieved through the efforts of contract lawyers, civil engineers, oil, mining, and rail technicians, and solid police work (to assure security)– not through military power and violence.
Now that’s what I call good news.

In the opinion piece I had in the CSM on August 22, I described the Olympic opening ceremony held in Beijing on August 8 as China’s “stunning coming-out party as a world power.” On that very same day, though in a very different way, Russia was also “coming out”– almost literally– or “coming back” as a world power.”
Of course, if you take a long, Chinese-style view of history then China was also coming “back” to the status of major world power.
It is important to note the very different ways these two powers have been emerging (or re-emerging) in recent years. Russia has done so primarily by wielding instruments of hard power– military strength, and “hard” economic power in the form of control over oil spigots. China has done so primarily with instruments of soft power, including a strong commitment to the “rules” of international politics, a generally strong preference for negotiation over military force, and the building of broad webs of relationships and influence through the “softer” economic levers of trade and financial dealings, culture (of various forms), and the smart enrollment of the broad global diaspora of Chinese ethnics.
Some differences between the approaches used by these two powers have been on show during this week’s meetings in Dushanbe, Tajikstan of the “Shanghai Cooperation Organization,” which unites the two of them, Kazakhstan, Kyrgyzstan, Tajikstan, and Uzbekistan. (Of the Central Asian Stans, Turkmenistan, Afghanistan, and Pakistan are not members. But Pakistan, India, Mongolia, and Iran all have observer status. And yesterday it was extremely significant to see that Afghanistan’s Prresident Hamid Karzai had slipped his NATO leash for long enough to attend the SCO as a visitor.)
The Russian leaders had evidently tried somewhat hard– not clear how hard– to get the SCO to express corporate backing for their recent moves in the breakaway Georgian regions of South Ossetia and Abkhazia. But they failed– and the reasons for their failure are probably instructive.
Nabi Abdullaev of The Moscow Times wrote

Moscow fell short of the diplomatic support it was looking for Thursday, as Central Asian states and China failed to back its recognition of independence for South Ossetia and Abkhazia, offering instead only qualified praise for Russia’s actions in the Georgian conflict.
… The hope of winning significant support from the membership of the Shanghai Cooperation Organization… vanished with a joint statement at a meeting in Dushanbe, Tajikistan, calling for the respect of all countries’ territorial integrity and denouncing the use of force in local conflicts.
Russia has steadfastly rejected the territorial-integrity argument in Georgia, saying Tbilisi lost such a right by attempting to establish control of South Ossetia by force…
It was unrealistic for President Dmitry Medvedev to expect the organization, in which China plays a leading role, to support Moscow’s position on South Ossetian and Abkhaz independence, given Beijing’s own concerns over its own separatist Tibet and Xinjiang provinces, said Masha Lipman, a political analyst with the Moscow Carnegie Center.
“Medvedev might have had some chance to win support from some individual Central Asian states after bilateral talks but never in the format of the whole alliance, which acts by consensus and where most members view China as the major partner,” Lipman said.

There are a number of interesting points there. First, it is significant that the well informed, and Moscow-based, Lipman judges that the four “Stan” members of the SCO view China as more powerful than Russia.
The IISS’s Oksana Antonenko has a nuanced description of the decidedly ambivalent feelings that the citizens of these four Stans– many of whom are ethnic Russians– have toward their former overlords in Moscow, here. I have noted elsewhere that the roads and rail links that link these landlocked Stans to the world economy have nearly all, until now, run through Russia. The Chinese have been working hard to complete a couple of nodal new rail connections to key Stans. But already, Masha Lipman is telling us, most of them view China as more powerful than Russia. Interesting.
There is probably also another reason, in addition to the one given by Lipman, why China (and also, probably, many of the other SCO members) might be wary of supporting Moscow’s position on Ossetia and Abkhazia. Yes, as mentioned by Lipman, the whole idea of opening up a “national independence” option for national minorities is an absolute can of worms for Beijing. But in addition, Moscow’s in-your-face policies toward the US and NATO threaten to inflame global tensions and tear up the fabric of international economic cooperation that the Chinese have benefited so strongly from in recent decades. So we might expect– and certainly hope– that they will use their influence with Russia and other actors to work hard to de-escalate the tensions that have been arising between Russia and the west.
I cannot emphasize this new role that China can m(and imho should) play in international relations strongly enough. Certainly, China’s very existence as a third significant big-power actor in world affairs– alongside Russia and the US– makes the present era of world politics very different from the decades of the overwhelmingly bipolar Cold War.
But China doesn’t play only the “balancing” role that any third big power might play. It plays an even more special kind of potentially leadership role, because of the way it has emerged as a big power over recent decades and the values it has pursued along that path.
China has not emerged through military conquest and arms-racing. It has emerged overwhelmingly through a focused pursuit of national consolidation (in many different ways, good and bad… none of them very different from the ways other nations have been consolidated elsewhere), smart diplomacy, and integration into the US-led world political and economic order.
Yes, there were military confrontations with western forces and pro-western proxies in Korea and Vietnam. But even those confrontations were far from being as violative of the international order as they were portrayed to be in the west. But then, by the design of both Beijing and Nixon’s Washington, the ending of the war in Vietnam coincided with Beijing’s full reintegration into the (still firmly US-led) international order. And since then, Beijing’s rulers have been careful not to use military force beyond their own borders. Since 1974, they have pursued even what they see as their remaining goals in the field of national consolidation– in Hong Kong, Macao, and Taiwan– through diplomatic means… That, while during the last decade of the Cold War the arms of Washington and Moscow and their proxies continued to battle each other openly throughout much the “Third World.”
China’s rulers are the ultimate “softly softly, catchee monkey” players in the international game. They are patient. They play by the existing international rules. They slowly stack up the chips of goodwill that they acquire through their growing economic might and their growing webs of international relations. They don’t waste huge amounts of money investing in large-scale military goods as a way of out-performing the US’s massively bloated arms production industry. Instead, they are probably quietly happy, at some level, when the US makes ill-considered military moves like the ones into Afghanistan or Iraq that lead to, effectively, the self-destruction of its own massive military might. Ultimate in ju-jitsu! Eat your heart out, Putin!
The Chinese wait, and wait, and then–
June 3, 2008, China wins,

a $3.5 billion contract to develop Afghanistan’s Aynak copper field, the largest foreign direct investment project in the history of Afghanistan.
The size of the bid — almost double the expected amount — surprised other potential foreign investors.
By some estimates, the 28-square-kilometer copper field in Logar Province could contain up to $88 billion worth of ore. But there is no power plant in the area that can generate enough electricity for the mining and extraction operations. And Afghanistan has never had the kind of railroad needed to haul away the tons of copper that could be extracted.
That is why a large part of the Chinese bid includes the cost of building a 400-megawatt, coal-fired power plant and a freight railroad passing from western China through Tajikistan and Afghanistan to Pakistan.

No wonder Pres. Karzai hurried off to Dushanbe yesterday to meet with Chinese Pres. Hu Jintao– even though the security situation at home in Afghanistan is in chaos!
And then, August 28, 2008, China and Iraq sign,

a $3 billion deal … to develop a large Iraqi oil field, the first major commercial oil contract here with a foreign company since the 2003 U.S.-led invasion.
The 20-year agreement calls for the state-owned China National Petroleum Corp. to begin producing 25,000 barrels of oil a day and gradually increase the output to 125,000 a day, said Asim Jihad, a spokesman for the Iraqi Oil Ministry…
Western oil companies came close this summer to reaching agreements with the ministry to return to Iraq. Those smaller technical service contracts involved giving advice on how to boost production. The China deal is a service contract, which is more lucrative and involves large-scale development of the field.

Do we see a pattern here? Do we see China stepping in to these two countries reeling from years of war and foreign occupation and starting to replace the US’s own deeply unsuccessful forms of economic and reconstruction aid, in some important ways, with its own?
What, in fact, is it we’re seeing? Is China stepping in to prop up the US role in these two countries, or to replace it? Can China avoid being seen by the war-battered and fairly distrustful peoples of these countries as “just more foreign exploiters”?
These are both high-stakes ventures for Beijing’s rulers to engage in. Particularly, perhaps, the one in Afghanistan, some of whose people have a lot in common with the often restive, Uighur people of Xinjiang.
What arrangements will be made– in either Iraq or Afghanistan– for assuring the security of the massive new Chinese economic ventures. Can they be, simply, “economic” ventures without also having a broad social, political, and security impact? (No, they can’t.)
So maybe China’s real coming-out party as a new kind of world power was not the one that was held August 8. Maybe instead it has been a two-act party, with the first act held June 3, and the second held earlier this week.
Or maybe there are further acts of similar impact, to follow? Stay tuned.