Monday, June 2, 2014

Geopolitical chess June 2 , 2014 -- Are China And Russia Moving Toward A Formal Alliance? Rather , will the foreign policy actor who have made considerable blunders over the past few years make an even larger blunder by taking steps that push Russia and China into a formal Alliance ? If such an alliance forms , do we see Brazil , India and South Africa align with this New World Order spearheaded by Russia and China ?

Are China And Russia Moving Toward A Formal Alliance?

Tyler Durden's picture

Submitted by Dingding Chen via The Diplomat,
During Russian President Vladimir Putin’s visit to China last week, China and Russia signed a huge natural gas deal that is worth about $400 billion. The natural gas deal is a win-win for China and Russia, as China secures a long-term (30 years) provision of natural gas from Russia and Russia can reduce its dependence on the European markets as well as strengthen Russia’s position against Western sanctions. In the meantime, China and Russia conducted a joint naval drill in East China Sea, sending a deterrence message to Japan and the U.S. This also indicates that Russia is now moving closer to China’s side with regard to the territorial disputes between China and Japan. Furthermore, China and Russia last weekvetoed a draft UN resolution to send Syria to the International Criminal Court for war crimes. China and Russia had vetoed three previous UNSC resolutions condemning Syria.
In the joint statement issued by China and Russia, the main message is that China-Russia relations have reached a new stage of comprehensive strategic partnership and this will help increase both countries’ international status and influence, thus contributing to a more just international order. Of particular importance is the agreement that China and Russia will deepen cooperation underthe Conference on Interaction and Confidence Building in Asia (CICA), a new security framework in Asia-Pacific that conveniently excludes the U.S. and Japan.
The question that everybody now is asking is this: Why this new development in China-Russia relations?Obviously, the main trigger is the recentUkraine crisis that has seriously damaged Russia-West relations, thereby pushing Russia closer to China. However, there is also a larger strategic reason. That is, there are mutual strategic needs as both China and Russia want to create a multipolar world that is not dominated by the U.S., particularly as China faces threats from the US-led alliance in Asia. As previously pointed out by Zachary Keck, China’s chance of winning maritime disputes with Japan partly depends on maintaining a good relationship with Russia. From Russia’s perspective, the NATO expansion is a serious threat to Russia’s national security and as such Russia has to fight back. Russia’s current and future capabilities are limited, however, and it desperately needs a reliable strategic partner, which happens to be China.
A more fundamental question, however, is: are China and Russia moving toward to a formal alliance? Some believe (hereand here) that a new China-Russia alliance is now emerging and this will eventually lead to a multi-polar world order. Others disagree (here and here) by pointing to problems in China-Russia relations such as historical mistrust, the lack of a common threat, and conflicting interests in Central Asia. Interestingly, within China there have been some domestic debates (herehere, and here) about whether China should form an alliance with Russia.
A prominent proponent for a China-Russia alliance is Professor Yan Xuetong from Qinghua University. Yan has been advocating for a China-Russia alliance for some years. According to Yan, the most important factor determining whether China and Russia should form an alliance is whether the two countries have shared strategic interests and how long such shared strategic interests can last. He first argues that currently neither China nor Russia could become a member of the Western bloc led by the U.S. because other allies of the U.S. would feel threatened by China and Russia. On the one hand, the West would never trust Russia, thus Russia has no better alternative to siding with China. On the other hand, China’s number two position in the world means that China will not be supported by the U.S. with regard to most international affairs issues. Moreover, a declining U.S. will choose an offshore balancing strategy by relying on its allies in Europe and Asia, thereby increasing pressures for China and Russia. Such increasing pressures pose common threats to China and Russia. Thus, a China-Russia alliance would benefit both countries in the next 10 to 20 years. Yan also refutes the argument that a China-Russia alliance against the U.S. would lead to another cold war.
Opponents of a China-Russia alliance, however, point out that there could be potentially high costs of such an alliance due to common problems such as fears of abandonment and entrapment. China could be dragged into an unnecessary war by Russia. Also, Russia is not that interested in this alliance idea as Russia is unwilling to be China’s junior partner in the relationship. Besides, Russia wants to maintain good relations with all Asian states and thus will not side with China when it comes to territorial disputes between China and Japan. For all these reasons, a China-Russia alliance is unrealistic and a strategic partnership is more flexible and better for China.
Thus, it seems that in the near future a formal alliance between China and Russia will not happen due to a variety of reasons. Unless the U.S. militarily threatens both China and Russia at the same time, a formal alliance will not occur.However, the U.S. should be careful not to make another strategic mistake that would only facilitate a formal China-Russia alliance.


Obama Administration Prepares To Unleash Weapons Of Mass Wealth Effect Destruction On Russia

Tyler Durden's picture

As Senator Ron Johnson so appropriately blasted, "I'm not sure sanctions had any effect whatsoever other than, you know, the Russians have mocked them," and so it is that the Treasury's (little heard of)"Terrorism and Financial Intelligence" division is preparing to unleash its most deadly weapons yet - an arsenal of financial weaponry aimed at hitting foreign adversaries with limited cost to allies. It appears clear that while the US dropped speech-bombs and sanction-mines, proclaiming the disastrous economic significance of these efforts, Russian stocks soared (vastly outperforming the US) and the Ruble strengthened... and so - as undersecretary David Cohen tells the WSJ, "What we've done over the past 10 years is to create a new method of projecting U.S. power..." e.g. sell non-US stocks (thus buy US stocks).

While the US equity market has already become a monetary policy tool, it appears now it is a global geopolitical force for good too...
the Obama administration is trying to shore up international support for a growing arsenal of financial weaponry aimed at hitting foreign adversaries with limited cost to allies.

As the administration prepares for a possible next round of sanctions against Russia, it is increasingly relying on an obscure unit inside the Treasury Department—a group of sanctions architects and financial sleuths in the Office of Terrorism and Financial Intelligence—to play a leading role in U.S. foreign policy.


Founded to disrupt terrorist financing after the attacks of Sept. 11, 2001, the Treasury office now plays a central role in exerting pressure overseas as the American public has little appetite for military intervention.
"What we've done over the past 10 years is to create a new method of projecting U.S. power," Mr. Cohen said in an interview. "We do that in a way that is unique in the world."
His office includes an intelligence shop that scours bank reports and spy agencies' gleanings for financial patterns that could threaten U.S. security, making Treasury "the only finance ministry in the world with an in-house intelligence unit," Mr. Cohen said.
"We have become proficient at reducing collateral damage," Treasury Secretary Jacob Lew said in remarks to be delivered Monday at a conference hosted by the Center for Strategic and International Studies that is looking at the office's work in its first decade. "But we cannot escape the fact that when we deploy these methods, there will be those who will unintentionally pay a price."

But it seems not everyone is so excited about the threat of this obscure war-mongering from the US Treasury...
Some of the resistance Treasury faces comes from U.S. businesses that worry about the fallout. Meddling with an economy as big as Russia's, for instance, could trigger significant losses for U.S. businesses if their work is affected by the sanctions, or if Moscow decided to retaliate.


Leaders of several European countries, including Hungary, have opposed tough sanctions on Russia, a major energy supplier on the continent, and their reluctance weighs on the sanctions policy of the EU, which makes such decisions by consensus. German firms have complained openly about the prospect of losing business in Russia.
Still, despite the massive outperformance of Russian stocks (and the Ruble) since sanctions began, Obama is proclaiming his actions as a major factor in Putin's retreat...
Still, Mr. Obama last week credited the sanctions and other measures the international community took against Russia with serving as a key "counterweight" to Russian troops on the border with Ukraine, most of which are now believed to have moved away.
So perhaps that explains the shocking decoupling surge in US equities this week as bonds rallied , volatility rose, and Russia stocks leaked lower...

Welcome to the new order... where elites wage wars on the stock exchanges... while real blood flows on the streets