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    Greater China
     Dec 15, 2007
Page 1 of 2
China leaves the US and India trailing
By M K Bhadrakumar

Hardly a week passes without Delhi taking stock of China's creeping "encirclement" of India. The Indian media reported on Thursday that Delhi denied permission for China's cargo carrier Great Wall Airlines to land in Mumbai or Chennai since the two Indian cities have "key nuclear facilities" which Chinese aeroplanes might reconnoiter.

That becomes more grist to the mill, though no one knows what it could be that the two aging Indian cities would hide that Google Earth hasn't yet spotted. Beijing predictably balked. Some Indian

strategic thinkers go so far as to call it China's "containment" of India - as if the Indian rogue elephant has gone berserk in the Asian courtyard and needs to be shackled.

Actually, the latest irritant shouldn't have been aerial reconnoitering, but China's upset win - trumping formidable rivals like the US, Canada and Russia - in the massive Afghan tender for copper mines. But the strategic community in Delhi doesn't know, as the Indian media kept it in the dark.

The news from the Hindu Kush would have made Indian thinkers pull their hair in despair. China has never been a player in Afghanistan in modern history. Indeed, it is a needless provocation on the part of the Chinese to be so utterly fearless of the Taliban and al-Qaeda. While India prides itself as a major donor for Afghan reconstruction - building roads, bridges, hospitals, a Parliament building and even, intriguingly, public toilets - China marches ahead and wins the tender for the Aynak cooper deposit in Afghanistan's Logar province bordering Kabul, which is billed as one of the world's largest copper mines.

The project involves US$4 billion in investment by China Metallurgical Group, which will be by far the biggest foreign investment in Afghanistan and is estimated to provide employment for 10,000 people. Significantly, the project includes the development of a railway system linking Afghanistan to China. (Nepal also has sought the extension of China's railway system from Lhasa to Kathmandu.)

Beijing-Tehran oil deal
These audacious Chinese are pole-vaulting across the impenetrable Himalayan ranges with merry abandon in their zest to globalize and integrate.

But the mother of all Chinese encirclement of India still remains largely unnoticed in Delhi - the Beijing-Tehran axis. There is wide recognition that if the United States hasn't been able to push through another tougher United Nations Security Council resolution against Iran over its nuclear program, that has been largely because of China's reluctance to concur.

But what happened last Sunday still came as a bolt from the blue. China Petroleum Corporation, better known as the Sinopec Group, signed a contract with the Iranian Oil Ministry for the development of the Yadavaran oil and gas fields in southwestern Iran.

The current estimation is that the project cost will be $2 billion. Under the contract, China will make the entire investment necessary to develop the fields. The first phase is to produce 85,000 barrels of oil per day and the second phase will add another 100,000 barrels. According to Iranian estimates, Yadavaran has in place oil reserves of 18.3 billion barrels and gas reserves amounting to 12.5 trillion cubic feet.

Iran is already China's third-largest supplier of crude oil, but the Iranians are simply delighted. Oil Minister Gholam-Hossein Nozari was quick to point out that the deal with China flies in the face of Washington's attempts to block foreign investments in Iran. Sinopec merely said, "We are very happy to sign this contract ... China is willing to buy LNG [liquefied natural gas] from Iran and we hope to talk about an LNG project later."

The Sino-Iranian deal has been closed within a week of the US National Intelligence Estimate (NIE) on Iran's nuclear program, which has conclusively debunked any conspiracies hatched by the neo-conservative coterie within the George W Bush administration for launching a military strike against Iran. Beijing has indeed moved fast.

But what stands out is that Beijing anticipated a long time ago the inevitability of precisely such a u-turn in US policy towards Iran. More important, it began plotting how it could take optimal advantage when the Iran question inexorably moved toward its denouement. Beijing estimated that time was of the essence. Beijing could visualize a day when Tehran would have competing customers from the Western world seeking access to its oil and gas.

Beijing's take on the Iran question
As far back as May, the government newspaper China Daily commented, "This policy [of Washington refusing to have dealings with Iran] is no longer workable. The reality of the Middle East is that the US cannot ignore Iran."

And by the beginning of June, Chinese regional experts had already assessed, "Iran, with no geopolitical competitors, has become the 'boss' within the Persian Gulf region. Since the US has fallen into the Iraqi quagmire, Iran concludes that the United States dare not use force against Iran. Therefore, it maintains strong strategic determination and refuses to make concessions on the nuclear issue.

"This favorable environment, coupled with a strategic resolve, has earned Iran a certain status of equilibrium with the United States in the contest within the Persian Gulf region. It is this balance of power that has forced the United States to sit down and talk with Iran. Iran, hence, has won the battle for survival and the status of a regional power."

The anonymous scholar from the Institute of Asia and Africa under the Chinese Institute of Contemporary International Relations, who wrote the above commentary for the People's Daily, went on to give his prognosis with extraordinary prescience. He wrote, "Despite many variables and the complicated situation in the Middle East, there is one thing that remains clear. The United States cannot reverse its current downhill trend in the Middle East. Iran's rise and its challenging gestures will further accelerate the decline of the United States' presence within the region. In the emerging 'new Middle East', Iran will certainly play a role that cannot be ignored."

By end-July, Beijing knew its assessment was perfect and that the US position with regard to Iran was rapidly eroding.

In the context of the US-Iran security talks over Iraq in July, the People's Daily noted, "The United States has eventually recognized Iran as a 'game player' in the region ... From the angle of geopolitics or religious culture, Iran can give scope to its role of a radiant power or influence over Iraq, which is exactly what the US refused to acknowledge but has [now] come to recognize."

India's Iran policy in tatters
How is it that such wisdom and foresight that immensely strengthens Beijing's hand today in the Persian Gulf and the Middle East eluded the strategic community in Delhi? Admittedly, Indian regional policy in the Middle East has been shaken to the core in recent days. The Indian strategic community was shell-shocked by the NIE.

The trauma was all the more painful as Delhi had just recently succumbed to Washington's arm-twisting and imposed banking restrictions on Iran, beyond what the two United Nations Security Council resolutions on that country demanded. That was a disastrous decision by any diplomatic yardstick. It is immaterial that Washington pressured Delhi into it despite knowing that the NIE was to sail into view. What matters is that Delhi looks very foolish and naive.

India is, alas, facing collateral damage from the reverses that the United States policy is taking in the Middle East and Persian Gulf. Delhi's estimation that it was always safe to hitch its diplomatic wagon to the US-Israeli caravan in the Middle East region has been put to the test. Delhi must now confront the reality that playing poodle to Washington didn't help advance India's medium- and long-term interests.

Delhi's Middle East policy rested on assumptions. First, it was assumed that the Bush administration would ultimately sort out the Iran question on American terms and the international community would have to learn to live with it. Delhi believed that 

Continued 1 2 

China outwits the EU in Africa (Dec 13, '07)

1. Iran: The wrong options on the table

2. Putin's choice: Charm could be unlucky 

3. Sino silence in subprime swamp

4. Ties on Iran's nuclear program loosen  

5. US looks on as Malaysia wobbles

6. Strange bedfellows emerge in Pakistan

7. Bulls, bankers blind to 
inevitable bust

8. China outwits the EU in Africa

9. It's a fragile 'quiet' in Iraq

10. Delhi: It's a jungle out there

(24 hours to 11:59 pm ET, Dec 13, 2007)


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