Chinese expansionism

[Azarkon]

Since we're China's biggest customer, it would be logical to make them suffer financial consequences every time they misbehave.

 

It's not so easy.

 

Imagine telling an average American that his next trips to Walmart are going to cost $25 extra because America is taking issue with China's ADIZ.

 

You think Americans are up for this? That they're willing to pay extra $ in everyday life to send a message to China about its ADIZ?

 

Of course not. The bulk of Americans don't even know what an ADIZ is, much less care that China put one up.

 

Economic sanctions are useful when the country is currently providing you jack, but with China, they're the source of income for a huge amount of American companies and of lower prices for the American consumer. Hitting China financially hurts them, but it also hurts us. That's why it doesn't happen over small issues.

Edited December 6, 2013 by Azarkon

[Walsingham]

I think it's a damned interesting question.

 

I'd agree that many Americans - or Britons - would be annoyed about paying more. But then equally my instinct says that we'd be better able to sustain that effort than the Chinese state. Not precisely sure why. But I guess it's to do with how we'd justify it.

 

Thoughts?

[Zoraptor]

It wouldn't just be x$ on top of the price of a set of cheap garden furniture. As soon as the US tries something significant China can and will reciprocate. It's economic MAD, in essence, you can have a certain amount of low level antagonism and 'competition' but if you try doing something that is considered to be important you're risking escalation and retaliation- and you'll end up getting as much damage yourself as them. While China is not the sole source for bond purchases and loans for the US it is a major one and if the stakes are raised enough they will use that leverage, for example. Or cut off some of the essential stuff they make, it will take months to years to gear up to make replacements and during that time it won't be x$ on the price, it'll be xyz$ on and likely complete unavailability.

 

China also, and in contrast to the west in general, has trillions in cash reserves. They'll burn through it quickly enough if push comes to shove, but that's certainly a better position than being 17 trillion in debt or whatever the US debt level currently is.

 

Germany didn't have the fleet to support the african colonies it did have. Cameroon, others ?. Lost in the WW1 peace treaty. 

 

Tanzania (German east africa, which reminds me...), Namibia, Samoa, Papua and Togo. Nowhere near France or the UK or even the Netherlands, but quite significant.

[Enoch]

 

Since we're China's biggest customer, it would be logical to make them suffer financial consequences every time they misbehave.

 

It's not so easy.

 

Imagine telling an average American that his next trips to Walmart are going to cost $25 extra because America is taking issue with China's ADIZ.

 

You think Americans are up for this? That they're willing to pay extra $ in everyday life to send a message to China about its ADIZ?

 

Of course not. The bulk of Americans don't even know what an ADIZ is, much less care that China put one up.

 

Economic sanctions are useful when the country is currently providing you jack, but with China, they're the source of income for a huge amount of American companies and of lower prices for the American consumer. Hitting China financially hurts them, but it also hurts us. That's why it doesn't happen over small issues.

 

 

The WTO is also a major factor-- the structure of the agreement makes it very tough to carry on any kind of trade sanctions against another member unless you have an exceedingly good reason. 

[Walsingham]

It wouldn't just be x$ on top of the price of a set of cheap garden furniture. As soon as the US tries something significant China can and will reciprocate. It's economic MAD, in essence, you can have a certain amount of low level antagonism and 'competition' but if you try doing something that is considered to be important you're risking escalation and retaliation- and you'll end up getting as much damage yourself as them. While China is not the sole source for bond purchases and loans for the US it is a major one and if the stakes are raised enough they will use that leverage, for example. Or cut off some of the essential stuff they make, it will take months to years to gear up to make replacements and during that time it won't be x$ on the price, it'll be xyz$ on and likely complete unavailability.

 

China also, and in contrast to the west in general, has trillions in cash reserves. They'll burn through it quickly enough if push comes to shove, but that's certainly a better position than being 17 trillion in debt or whatever the US debt level currently is.

 

Germany didn't have the fleet to support the african colonies it did have. Cameroon, others ?. Lost in the WW1 peace treaty. 

 

Tanzania (German east africa, which reminds me...), Namibia, Samoa, Papua and Togo. Nowhere near France or the UK or even the Netherlands, but quite significant.

 

Not so sure, Zor.

 

China can cut off manufacture and 'investment'. The USA can cut off oil and food. Doesn't sound liek an even outcome to me.

[Rostere]

The modern global economy works like this: the more trade partners you have (with no trade restrictions), the more opportunities you will have (and also more pressure on your economy to be competitive, which is beneficial in the long term). If China and the US cease trade it will hurt both - but also be gainful to the rest of the world, since they can buy Chinese products at discount prices. Plus manufacturing countries other than China will instead get to export to the US. It's how this game works. Sanctions only ever works when a large and important country sanctions a small one, since it will relatively speaking (as a percentage of the entire economy) hurt the smaller one more. China and the US are globally speaking of equal size.

 

Sorry I'm late to this discussion  Ros its not often I disagree with you but in this case I definitely do, I'm very surprised that our UK based members seemed happy to accept your view that the UK doesn't deserve a permanent place on the UNSC ( shame on you Walsie !! Where is that famous Jingoism that we like to see from you )

 

I assume we are ignoring the historical context and sacrifice of the UK in the previous world wars, that's fine. Lets focus on the last 15 years.

 

 

Firstly your initial link is flawed and doesn't represent the reality of peace keeping roles.

 

http://en.wikipedia.org/wiki/List_of_countries_by_number_of_UN_peacekeepers

 

Its based on 2013 data only. But even then look at the contribution that Russia and China have made to peace keeping forces. In fact lets keep it simple, find me the a couple of examples in the last 10 years that Russia or China have committed military resources to any real conflict? That should be a salient reason for a place on the UNSC,  your personal stake in the security of the world and your influence. So if your link is appropriate to this discussion why should Russia or China be a member of the UNSC?

 

 Also in almost cases where the UNSC send troops to places like Africa the funding of those troops is done through the members of the security council. So just because you don't see UK troops in Mali or Central African Republic countries like the UK still pay for those troops and the deployment of those troops? This is one of the biggest failures of the African Union. They can't afford to fund there own peace keeping. I have provided another link at the end that highlights how much money the UK does give to the UN for military operations throughout the world

 

Now lets look at some accurate deployments that the UK has been involved in last 10 years.

 

http://www.army.mod.uk/operations-deployments/operations-deployments.aspx

 

Then there NATO involvement

 

http://www.nato.int/cps/en/natolive/topics_52060.htm

 

Now you can research the individual examples above to see the UK commitment to conflicts like Bosnia, Libya and Sierra Leone. And lets not forget Syria, the UK was one of the few countries along with France and the USA that were prepared to get involved on a military level after Assad used Chemical weapons

 

Then we have the personal financial contributions to humanitarian disasters around the world that the UK have made.

 

 You can find endless links around the various UK charities and the commitment that the UK has made to humanitarian issues around the world.

 

And finally the contribution that the UK has made to the UN budget. Go back a few years to see how much money the UK commits to the UN. Compare this to Russia and China.

 

http://www.globalpolicy.org/un-finance/tables-and-charts-on-un-finance/member-states-assessed-share-of-the-un-budget.html

 

 

So in summary the UK absolutely deserves its place on the UNSC, it is prepared to send its own troops to conflict areas and is actively involved in UNSC endorsed military operations. Finally if you really don't feel the UK should be on the UNSC then neither should China and Russia because how have they assisted with stabilising conflict areas around the world?

 

 

 

Let's reiterate what I have said first:

 

My proposed permanent UNSC member list: US, China, Japan, Germany, France

The current permanent UNSC member list: US, China, France, UK, Russia

 

So in other words, I don't think that the strength of the UK and Russia merits a place among the five most powerful countries in the world. The UK is probably at place 6 or 7. Russia at place 8-10. So I'm not trying to say that Russia should be on the UNSC either. In fact if I was forced to choose between the two I'd choose the UK over Russia.

 

My link IS based on 2013 only, so it's not fully reflect what historically has happened. But then, what has happened 50 years ago does not necessarily matter now, that was kind of one of my original points. More importantly, the list was just used to refute the point that the UK pledging troops should warrant a seat on the UNSC. So I don't think that Bangladesh should be on the UNSC just because they pledge the world's most important and well-respected UN peacekeeping force. Nevertheless the UK has not contributed a significant amount of UN troops in recent times.

 

Please, let's look at your list of who really pays for peacekeeping efforts because it's a good arguments for why I'm right.

 

Top 5 sponsors of the UN:

 

1. US - 22%

2. Japan - 10,833%

3. Germany - 7,141%

4. France - 5,593%

5. UK - 5,179%

6. China - 5,148%

 

I'm not even going to talk about Russia. They pay a lot less.

 

You are right in that the UK pays 0,6% more than China, earning them the 5th place with a slim margin. If you think that paying 0,6% more to the UN trumps China having more than three times as large economy and more than a hundred times the population of the UK... Well, China will likely pay more than the UK in 2014. Nevertheless the point here was to illustrate how Japan and Germany pay more (a lot more in the case of Japan) compared to current permanent UNSC members.

 

And then you only make vague statements, and talk about British non-UN and NATO engagements. All of this is kind of missing the point though. The UNSC is about which countries are the most powerful and important right now, not about who won WW2.

 

(On a side note: even if you said that your military is involved in every country in the entire world, it wouldn't mean anything. Do you think the Russian intervention in Syria warrants their place on the UNSC in your opinion? The entire point of the military part of the UN is having a global consensus around peacekeeping efforts.)

[obyknven]

My proposed permanent UNSC member list: US, China, Japan, Germany, France

The current permanent UNSC member list: US, China, France, UK, Russia

You dont understand point of UN. UN is private club created by victors in WW2 for victors in WW2. All others are guest's here, they can  give all own money's to UN but this change nothing, they are not bosses here. Your attempt include ex-Axis states as permanent UNSC members in such organisation is laughable.

 

[Wrath of Dagon]

 

Since we're China's biggest customer, it would be logical to make them suffer financial consequences every time they misbehave.

 

It's not so easy.

 

Imagine telling an average American that his next trips to Walmart are going to cost $25 extra because America is taking issue with China's ADIZ.

 

You think Americans are up for this? That they're willing to pay extra $ in everyday life to send a message to China about its ADIZ?

 

Of course not. The bulk of Americans don't even know what an ADIZ is, much less care that China put one up.

 

Economic sanctions are useful when the country is currently providing you jack, but with China, they're the source of income for a huge amount of American companies and of lower prices for the American consumer. Hitting China financially hurts them, but it also hurts us. That's why it doesn't happen over small issues.

 

 Just don't tell them, they'll never figure it out on their own, like you said, they don't know anything anyway. And small issues turn into large issues if not nipped in the bud.

 

It wouldn't just be x$ on top of the price of a set of cheap garden furniture. As soon as the US tries something significant China can and will reciprocate. It's economic MAD, in essence, you can have a certain amount of low level antagonism and 'competition' but if you try doing something that is considered to be important you're risking escalation and retaliation- and you'll end up getting as much damage yourself as them. While China is not the sole source for bond purchases and loans for the US it is a major one and if the stakes are raised enough they will use that leverage, for example. Or cut off some of the essential stuff they make, it will take months to years to gear up to make replacements and during that time it won't be x$ on the price, it'll be xyz$ on and likely complete unavailability.

 

China also, and in contrast to the west in general, has trillions in cash reserves. They'll burn through it quickly enough if push comes to shove, but that's certainly a better position than being 17 trillion in debt or whatever the US debt level currently is.

If they don't keep buying bonds, we'll just print more money instead, making their bonds worthless. Plus they can't stop buying US bonds, that would make the dollar fall against the yuan and make their economic situation even worse.

  

 

The WTO is also a major factor-- the structure of the agreement makes it very tough to carry on any kind of trade sanctions against another member unless you have an exceedingly good reason.

I'm not proposing public action, that would only push them against the wall and make any crisis worse. It needs to be more subtle, like let American companies privately know in no uncertain terms they need to cut back on Chinese investment and start looking elsewhere.

[alanschu]

I'm not proposing public action, that would only push them against the wall and make any crisis worse. It needs to be more subtle, like let American companies privately know in no uncertain terms they need to cut back on Chinese investment and start looking elsewhere.

It still won't work unless you somehow got 100% buy in, which you won't.

 

Some company somewhere will be presented with an offer that is excessively beneficial for not buying in, and it'd only be bad business to not accept it even if they were encouraged to do something else.

[Zoraptor]

If they don't keep buying bonds, we'll just print more money instead, making their bonds worthless. Plus they can't stop buying US bonds, that would make the dollar fall against the yuan and make their economic situation even worse.

 

Which is irrelevant as we aren't talking about a minor spat here. If things are serious enough that the US is seriously damaging China's economy then they would have no expectation that the US would pay back its loans anyway. And it wouldn't just be Chinese bonds being devalued, it would be everyone's. Good luck getting more money out of anyone if you've just proven that you will- effectively- default on your loans wholesale, and if printing money were an economic panacea Zimbabwe and Weimar Germany would be Nirvanas. Recipe for winning bragging rights over a pile of economic ash, that.

 

China can cut off manufacture and 'investment'. The USA can cut off oil and food. Doesn't sound liek an even outcome to me.

 

Then you're actually talking a blockade and an act of war, not some sort of economic stoush. That scenario leads to Fallout, if you aren't absolutely sure what you're doing. And, of course, it would prove every single one of China's reservations completely correct.

 

My proposed permanent UNSC member list: US, China, Japan, Germany, France

The current permanent UNSC member list: US, China, France, UK, Russia

I'm unenthusiastic about the current set up, but your proposed one is... bonkers. Japan is still cordially loathed by its neighbours, is clearly on its way down, is internationally irrelevant and if you're going to award permanent seats based on contributions be ready for Saudi Arabia to be next on the list. If I had to redesign the UNSC Japan wouldn't make my short list. I'm not even sure if I were to appoint the whole 15 seats that Japan would make it.

[Azrayel]

Well, there are coups as well as revolutions, in fact i'd venture to say that the former are more common, where established democracies become juntas. I don't see the invisible hand of statistics at work unless a dictatorship is tied directly to the life of a single person. Chauchesco, Hussein, etc. 

 

The communist party will be the communist party. It's reasonably inclusive as long as you are willing to tow the official line, and government repression is tempered as well. They tend to make do with making an example out of very loud detractors and leave it at that.  

 

The Chinese people at large have come to accept it. 

 

The highlighted part is what makes me question you know what you're talking about.

 

Chinese people?  You mean the Han?  They're basically the only people allowed to be in government or make money in a meaningful way, but there are Chinese Peoples.

 

The brown, Muslim Uyghur who recently had a genocide conducted against them?  They've grown to accept this?

 

The Zhuang who grew out of Guangxi and speak mutually unintelligible dialects which resemble phonetically but are not Chinese?

 

China is a multi-ethnic state teeming with unrest and surrounded by increasingly faulty attempts to censor the 'net.  While "the Communist Party" is still effectively the only party, Beijing is starting to deal with other figureheads cropping up in other localities' Communist Parties.  Top that off with all of the remaining states they border having anti-China pacts with not only one another but also the US, and you see a burgeoning blob straining to press out of its britches even as its organs seek to break loose from its blood-red seam.

 

It isn't a place of complacancy because the midnight news hasn't been able to tell the Western World about the fine detail goings-on since Tiananmen, and we do the Chinese Peoples a disservice to insinuite from ignorance they are complacent in all of this.

[Wrath of Dagon]

 

I'm not proposing public action, that would only push them against the wall and make any crisis worse. It needs to be more subtle, like let American companies privately know in no uncertain terms they need to cut back on Chinese investment and start looking elsewhere.

 

It still won't work unless you somehow got 100% buy in, which you won't.

 

Some company somewhere will be presented with an offer that is excessively beneficial for not buying in, and it'd only be bad business to not accept it even if they were encouraged to do something else.

 

Why would it matter what one company does in an economy as big as China's?

 

 

 

 

If they don't keep buying bonds, we'll just print more money instead, making their bonds worthless. Plus they can't stop buying US bonds, that would make the dollar fall against the yuan and make their economic situation even worse.

Which is irrelevant as we aren't talking about a minor spat here. If things are serious enough that the US is seriously damaging China's economy then they would have no expectation that the US would pay back its loans anyway. And it wouldn't just be Chinese bonds being devalued, it would be everyone's. Good luck getting more money out of anyone if you've just proven that you will- effectively- default on your loans wholesale, and if printing money were an economic panacea Zimbabwe and Weimar Germany would be Nirvanas. Recipe for winning bragging rights over a pile of economic ash, that.

 

I was talking about the current situation, where China is acting in an increasingly belligerent and arrogant way toward its neighbors. It's not open warfare yet though. And I was somewhat flippant about printing more money, although with the current government it seems to be a solution for everything. I actually wish others would stop buying our bonds to force us into some financial discipline before it's too late. Edited December 7, 2013 by Wrath of Dagon

[Azarkon]

 

It wouldn't just be x$ on top of the price of a set of cheap garden furniture. As soon as the US tries something significant China can and will reciprocate. It's economic MAD, in essence, you can have a certain amount of low level antagonism and 'competition' but if you try doing something that is considered to be important you're risking escalation and retaliation- and you'll end up getting as much damage yourself as them. While China is not the sole source for bond purchases and loans for the US it is a major one and if the stakes are raised enough they will use that leverage, for example. Or cut off some of the essential stuff they make, it will take months to years to gear up to make replacements and during that time it won't be x$ on the price, it'll be xyz$ on and likely complete unavailability.

 

China also, and in contrast to the west in general, has trillions in cash reserves. They'll burn through it quickly enough if push comes to shove, but that's certainly a better position than being 17 trillion in debt or whatever the US debt level currently is.

 

Germany didn't have the fleet to support the african colonies it did have. Cameroon, others ?. Lost in the WW1 peace treaty. 

 

Tanzania (German east africa, which reminds me...), Namibia, Samoa, Papua and Togo. Nowhere near France or the UK or even the Netherlands, but quite significant.

 

Not so sure, Zor.

 

China can cut off manufacture and 'investment'. The USA can cut off oil and food. Doesn't sound liek an even outcome to me.

 

 

I've heard of this line of thinking before from strategy analysts, and the consensus is that without Russia's consent there's no way the US is able to cut off oil from China. Yes, China gets the bulk of its oil from maritime sources now, but were we to clamp that shut with a blockade, they're going to turn straight to Russia and Central Asia. That plays into Russia's hands and makes them the kingpins of the East. I think the US still rather deal with a rising China than a rising Russia.

 

Food, not a dice in hell. Just because China is importing a lot of food now doesn't equate to them not being able to produce that food when they're forced to. The Chinese are getting fat on our burgers and high fructose corn syrup, but they don't need it. Their land is fertile enough to support their current level of population.

Edited December 7, 2013 by Azarkon

[Azarkon]

 

 

It's not so easy.

 

Imagine telling an average American that his next trips to Walmart are going to cost $25 extra because America is taking issue with China's ADIZ.

 

You think Americans are up for this? That they're willing to pay extra $ in everyday life to send a message to China about its ADIZ?

 

Of course not. The bulk of Americans don't even know what an ADIZ is, much less care that China put one up.

 

Economic sanctions are useful when the country is currently providing you jack, but with China, they're the source of income for a huge amount of American companies and of lower prices for the American consumer. Hitting China financially hurts them, but it also hurts us. That's why it doesn't happen over small issues.

 

 Just don't tell them, they'll never figure it out on their own, like you said, they don't know anything anyway. And small issues turn into large issues if not nipped in the bud.

 

It wouldn't just be x$ on top of the price of a set of cheap garden furniture. As soon as the US tries something significant China can and will reciprocate. It's economic MAD, in essence, you can have a certain amount of low level antagonism and 'competition' but if you try doing something that is considered to be important you're risking escalation and retaliation- and you'll end up getting as much damage yourself as them. While China is not the sole source for bond purchases and loans for the US it is a major one and if the stakes are raised enough they will use that leverage, for example. Or cut off some of the essential stuff they make, it will take months to years to gear up to make replacements and during that time it won't be x$ on the price, it'll be xyz$ on and likely complete unavailability.

 

China also, and in contrast to the west in general, has trillions in cash reserves. They'll burn through it quickly enough if push comes to shove, but that's certainly a better position than being 17 trillion in debt or whatever the US debt level currently is.

If they don't keep buying bonds, we'll just print more money instead, making their bonds worthless. Plus they can't stop buying US bonds, that would make the dollar fall against the yuan and make their economic situation even worse.

  

 

The WTO is also a major factor-- the structure of the agreement makes it very tough to carry on any kind of trade sanctions against another member unless you have an exceedingly good reason.

I'm not proposing public action, that would only push them against the wall and make any crisis worse. It needs to be more subtle, like let American companies privately know in no uncertain terms they need to cut back on Chinese investment and start looking elsewhere.

 

 

Americans are pretty naive but they aren't that stupid. They're going to find out via their iphones and facebooks what's going on sooner/later when they see price hikes that affect their own lives.

 

US companies are already looking elsewhere for investments. China is no longer the top investment choice: India is. But having the government regulate private investments for the sake of 'teaching teh Chinese a lesson' is bad for the economy. You invest to make a profit, and when companies are being forced to play the government's lapdog, they end up losing money on bad investments, resulting in bankruptcies, unemployment, etc.

 

To this end, I have to go against the naive grain that at times the American media spouts about how the US transferred its wealth to China. Investments aren't wealth transfers. In the same way the banks don't loan you money to do you a favor, investments in China aren't freebies/gifts. They're designed to make us richer, a sort of coattail riding on a developing economy. Yes, we're responsible for China's rise - because we wanted to cash in on that rise. Yet that also limits our options when it comes to economic retaliation, because at the end of the day, it's our investments that are being hurt.

Edited December 7, 2013 by Azarkon

[Walsingham]

I've heard of this line of thinking before from strategy analysts, and the consensus is that without Russia's consent there's no way the US is able to cut off oil from China. Yes, China gets the bulk of its oil from maritime sources now, but were we to clamp that shut with a blockade, they're going to turn straight to Russia and Central Asia. That plays into Russia's hands and makes them the kingpins of the East. I think the US still rather deal with a rising China than a rising Russia.

 

Food, not a dice in hell. Just because China is importing a lot of food now doesn't equate to them not being able to produce that food when they're forced to. The Chinese are getting fat on our burgers and high fructose corn syrup, but they don't need it. Their land is fertile enough to support their current level of population.

 

 

Sorry to stamp down on you. But I am almost 100% sure both of these points is wrong.

 

1) In order to transport the quantities of oil you're talking about you need serious oil pipelines. And I men on an enormous scale. It takes years to get something like that in place. Even assuming it could run effectively. Oil moves by supertanker for a very simple reason: economics.

 

2) China's arable land is maxed out. Worse, there are many reports that it is being overused and actually diminishing. Just take a look at the vast country on a satellite image. All the arable land is along the coasts and in the southeast.

 

Having said that I'd want to look again at the figures. But That's what I know.

[kgambit]

Sorry to stamp down on you. But I am almost 100% sure both of these points is wrong.

 

1) In order to transport the quantities of oil you're talking about you need serious oil pipelines. And I men on an enormous scale. It takes years to get something like that in place. Even assuming it could run effectively. Oil moves by supertanker for a very simple reason: economics.

 

2) China's arable land is maxed out. Worse, there are many reports that it is being overused and actually diminishing. Just take a look at the vast country on a satellite image. All the arable land is along the coasts and in the southeast.

 

Having said that I'd want to look again at the figures. But That's what I know.

 

True.

 

1)  Chinese oil consumption outstripped its production by over 6.3 million barrels per day, and existing pipelines from Russia and Kazahkstan are capable of supplying less than 0.5 million barrels a day. Proposed pipelines from Pakistan and India have failed to get off the drawing board.  Expansion of existing Siberian-China pipelines will expand the pipeline capacity but nowhere near to covering the total shortfall.   

 

http://www.theodora.com/pipelines/east_asia_oil_gas_products_pipelines_map.html

 

2)  The farm land lost during the 3 Gorges damn project had provided 40% of China's grain and 70% of rice crops. Continued resettlement of farmers for larger development projects has put further pressure on Chinese domestic food production.

 

Thanks to rapid industrialization and urbanization, the formerly self-sufficient agrarian country has to feed about one-fifth of the world’s population with just 8% of the world’s farmland. China ranks 42nd in the world in food security, just ahead of Botswana. Food inflation is a consistent worry, especially for poorer Chinese households that spend a large proportion of their income on food.

http://qz.com/140994/china-imports-4-of-the-worlds-grain-and-thats-still-not-enough/

Edited December 7, 2013 by kgambit

[Azarkon]

 

Sorry to stamp down on you. But I am almost 100% sure both of these points is wrong.

 

1) In order to transport the quantities of oil you're talking about you need serious oil pipelines. And I men on an enormous scale. It takes years to get something like that in place. Even assuming it could run effectively. Oil moves by supertanker for a very simple reason: economics.

 

2) China's arable land is maxed out. Worse, there are many reports that it is being overused and actually diminishing. Just take a look at the vast country on a satellite image. All the arable land is along the coasts and in the southeast.

 

Having said that I'd want to look again at the figures. But That's what I know.

 

 

1. Oil is also capable of moving by trucks and trains. Building pipelines is a long-term solution; cutting off oil creates a short-term crisis, one that China is capable of managing provided that the Russians are willing to sell. I believe I read this from a recent Stratfor release talking about exactly this issue.

 

2. Pretty sure the geographic distribution is 100% wrong. China was fundamentally a riverine agricultural civilization and the biggest continuous chunk of arable land in East Asia. It's why it was the center of the East Asia both economically and demographically.

 

 

You see there that the bulk of cultivated land is in the North China Plain ie the traditional center of Chinese civilization.

 

Don't get me wrong, environment degradation is a huge problem for them, but the idea of a Chinese food squeeze is exaggerated. Chinese agriculture isn't that efficient because they don't have the economic muscle to employ hundreds of millions of farmers in other jobs, and the fact that they're building tons of cities in the interior with the goal of making all the farmers urban workers tells me that they don't worry about food being a problem.

 

Were the US to clamp down on food exports, there's plenty of other options both within and outside of China.

Edited December 7, 2013 by Azarkon

[kgambit]

1. Oil is also capable of moving by trucks and trains. Building pipelines is a long-term solution; cutting off oil creates a short-term crisis, one that China is capable of managing provided that the Russians are willing to sell. I believe I read this from a recent Stratfor release talking about exactly this issue.

 

 

It is true that China could survive a maritime oil embargo if and only if Russia and Kazahkstan alter their current export distribution. Russia could supply the import shortfall by itself but would it do so with 78% of Russian oil exports marked for EU countries? Maybe. If China paid thru the nose as it would likely do. Kazakhstan only exports a total of 2 million barrels a day so that won't completely make up the shortfall. The pipeline to China is expected to double capacity to 400,000 bbl/d by 2014. Iran, which only supplies 555,000 bbl/day to China and could increase that to a max of 2 million a day but is land transport an option?

 

 

Currently, Kazakshtan and Russia supply around a half a million bbl a day to China.

 

Further, Russia's and Kazakhstan's oil exports have been static since 2009 at a combined quantity of about 9 million barrels per day. This value is assumed to remain constant for the foreseeable future. China's imports are growing exponentially and even conservative projections will have Chinese demand outstripping the capacity for Russian/Kazahkstan resupply by as early as 2020 if not before.

 

You might want to read this article:

Stranglehold: The Context, Conduct and Consequences of an American Naval Blockade of China

http://www.tandfonline.com/doi/full/10.1080/01402390.2012.743885#.UqM4sWd3uUk

 

Several other Chinese neighbors might act as transit points for goods and resources produced outside of their borders, albeit to a limited degree. Broadly speaking, China could import through three potential sub-regional transit routes: a Central Asian route (via either Tajikistan or Kyrgyzstan), a Southwest Asian route (via either Afghanistan or Pakistan) and a Southeast Asian route (via either Burma or Laos.

 

In theory, Beijing could use any country along these routes with access to the international markets as a stepping stone for imports. However, the infrastructure associated with the three routes was not designed to support the transportation of large quantities of goods to China and might become overloaded by a significant increase in imports. In particular, the Central Asia and Southwest Asian routes would be severely hampered by the extensive mountain ranges that act as an alpine fence dividing China from its western neighbors. Hence, these states could only relieve China's blockade to a limited degree.

The rest of Chinese oil imports REQUIRE tanker transport - trains and trucks are not an option for transport from most of the countries that currently export oil to China. Even the China-Myanamar gas and oil pipeline was designed to provide a southern offload terminal that bypassed the choke point at the Straights of Malacca. It still requires tanker transport to the Bay of Bengal terminal.

 

China does have the short term capacity to withstand a 30 day oil embargo thanks to their petroleum reserve, which is being planned for expansion to a 60 day reserve by 2030 even with increased demand.

 

Quick digression on Chinese oil imports:

 

Oil imports

 

China's crude oil imports have grown robustly in the past several years, and reached a record-high 6 million bbl/d by May 2012. China imported nearly 5.1 million bbl/d of crude oil on average in 2011, rising 6 percent from 4.8 million bbl/d in 2010. In the first half of 2012, imports rose even higher to 5.6 million bbl/d. Crude imports now outweigh domestic supply, consisting of over half of total oil consumption in 2011. EIA expects China to import about 75 percent of its crude oil by 2035 as demand is expected to grow faster than domestic crude supply.

 

The Middle East remains the largest source of China's crude oil imports, although African countries, particularly Angola, began contributing more to China's imports in recent years. As part of China's energy supply security policy, the country's NOCs are attempting to diversify supply sources in various regions through overseas investments and long-term contracts. In 2011, the Middle East supplied 2.6 million bbl/d (51 percent). Other regions that export to China include Africa with 1.2 million bbl/d (24 percent), Asia-Pacific region with 173,000 bbl/d (3 percent), and 1.1 million bbl/d (22 percent) from other countries. Saudi Arabia and Angola ranked as China's two largest sources of oil imports, together accounting for almost one-third of China's total crude oil imports. Sudan and South Sudan became significant oil exporters to China until production was shut in at the start of 2012, following political conflicts between the two African nations over their oil resources. Exports from Sudan and South Sudan to China dropped from 260,000 bbl/d in 2011 to zero by April 2012.

 

 

http://www.eia.gov/countries/cab.cfm?fips=CH

Edited December 7, 2013 by kgambit

[Walsingham]

My thanks to kgambit for furnishing what I couldn't be bothered to. He is a better man.

 

Sorry, Azarkon, but there's no economic way you could move crude oil by land, even if the tanker capacity existed on that scale, which it doesn't. Besides, all the refineries are at the ports at the opposite end of the country. You can't just get across the border and declare yourself a winner. The entire setup would be all wrong.

 

Just look at Iran. Surrounded by sodding oil, but had a petrol crisis that nearly sparked a revolution.

 

Your point about land reform is specious, if less obviously wrong. Just because the central planning committee decide to transform farmers into urbn workers doesn't mean that they should. Central planning committees routinely make decisions on ideological, not practical grounds. China has had famines in living memory, for God's sake!

[kgambit]

A bit more on rail capacity. As Wals points out, it's not economic (moving crude by pipeline in the US for example still costs about half to one-third what it does to move it by rail) but cost in this case is a secondary concern. The truth is that the Chinese simply do not have the rolling stock required.

 

Let's look at the US for starters:

 

A PLG Consulting analysis found that by 2015 US pipeline capacity and rail capacity will be equal, both able to move 975,000 barrels per day. This year, (2013) pipeline capacity is 565,000 barrels per day and rail is 925,000 barrels per day. In 2012, they carried nearly 234,000 carloads and will likely haul around 400,000 carloads in 2013. According to the Association of American Railroads, trains transported a record 97,135 carloads of crude oil in the first quarter of 2013. That’s 166 percent more than during the first quarter of 2012. The North American tank car fleet currently consists of about 335,000 cars, with around 92,000 used to transport crude oil and other flammable liquids. A typical DOT-111 (69% of U.S. rail tank cars) carload of crude oil contains around 34,500 gallons (~630 barrels).

 

As an aside, there is an 18 month waiting list for new rail tanker cars.

 

https://www.aar.org/keyissues/Documents/Background-Papers/Crude-oil-by-rail.pdf

http://www.chicagobusiness.com/article/20131026/ISSUE01/310269977/oil-boom-is-creating-years-long-backlog-for-tank-cars#

 

The US (and Canada) has an extensive coast to coast railway system in place.

 

By contrast, China has a single rail line that runs to the Kazahkstan border and China's rail network has direct connections with Russian railways at two points: Manzhouli and Suifenhe. In 2004 China’s railroad inventory included 15,456 locomotives owned by the national railroad system. National railroad freight cars numbered 520,101. Assuming a similar ratio of tanker cars to total rolling stock as the US, that would give the Chinese ~140,000 tanker rail cars with a capacity of ~1.5 million barrels a day. Even if the Chinese rail freight car stock was comprised of 100% tankers, they still wouldn't be able to haul the required 6 million barrels a day.

 

Forget tanker trucks since they have a capacity of around 200 barrels each.

[licketysplit]

[obyknven]

Yeaah, sea blokade of China can causing serious problem for  this country. But Westlings forgot how  in past times similar politics causing Japanese attack to Pearl-Harbor as response. Imagine such response now not from small and resourse-less Japan, but from huge and powerful  Chinese nuclear Empire.  Do you really prepared be nuked, because such pathetic reason as  ownership of few  small rocks in Ocean?
 

[Azarkon]

 

1. Oil is also capable of moving by trucks and trains. Building pipelines is a long-term solution; cutting off oil creates a short-term crisis, one that China is capable of managing provided that the Russians are willing to sell. I believe I read this from a recent Stratfor release talking about exactly this issue.

 

 

It is true that China could survive a maritime oil embargo if and only if Russia and Kazahkstan alter their current export distribution. Russia could supply the import shortfall by itself but would it do so with 78% of Russian oil exports marked for EU countries? Maybe. If China paid thru the nose as it would likely do. Kazakhstan only exports a total of 2 million barrels a day so that won't completely make up the shortfall. The pipeline to China is expected to double capacity to 400,000 bbl/d by 2014. Iran, which only supplies 555,000 bbl/day to China and could increase that to a max of 2 million a day but is land transport an option?

 

 

Currently, Kazakshtan and Russia supply around a half a million bbl a day to China.

 

Further, Russia's and Kazakhstan's oil exports have been static since 2009 at a combined quantity of about 9 million barrels per day. This value is assumed to remain constant for the foreseeable future. China's imports are growing exponentially and even conservative projections will have Chinese demand outstripping the capacity for Russian/Kazahkstan resupply by as early as 2020 if not before.

 

You might want to read this article:

Stranglehold: The Context, Conduct and Consequences of an American Naval Blockade of China

http://www.tandfonline.com/doi/full/10.1080/01402390.2012.743885#.UqM4sWd3uUk

 

Several other Chinese neighbors might act as transit points for goods and resources produced outside of their borders, albeit to a limited degree. Broadly speaking, China could import through three potential sub-regional transit routes: a Central Asian route (via either Tajikistan or Kyrgyzstan), a Southwest Asian route (via either Afghanistan or Pakistan) and a Southeast Asian route (via either Burma or Laos.

 

In theory, Beijing could use any country along these routes with access to the international markets as a stepping stone for imports. However, the infrastructure associated with the three routes was not designed to support the transportation of large quantities of goods to China and might become overloaded by a significant increase in imports. In particular, the Central Asia and Southwest Asian routes would be severely hampered by the extensive mountain ranges that act as an alpine fence dividing China from its western neighbors. Hence, these states could only relieve China's blockade to a limited degree.

The rest of Chinese oil imports REQUIRE tanker transport - trains and trucks are not an option for transport from most of the countries that currently export oil to China. Even the China-Myanamar gas and oil pipeline was designed to provide a southern offload terminal that bypassed the choke point at the Straights of Malacca. It still requires tanker transport to the Bay of Bengal terminal.

 

China does have the short term capacity to withstand a 30 day oil embargo thanks to their petroleum reserve, which is being planned for expansion to a 60 day reserve by 2030 even with increased demand.

 

Quick digression on Chinese oil imports:

 

Oil imports

 

China's crude oil imports have grown robustly in the past several years, and reached a record-high 6 million bbl/d by May 2012. China imported nearly 5.1 million bbl/d of crude oil on average in 2011, rising 6 percent from 4.8 million bbl/d in 2010. In the first half of 2012, imports rose even higher to 5.6 million bbl/d. Crude imports now outweigh domestic supply, consisting of over half of total oil consumption in 2011. EIA expects China to import about 75 percent of its crude oil by 2035 as demand is expected to grow faster than domestic crude supply.

 

The Middle East remains the largest source of China's crude oil imports, although African countries, particularly Angola, began contributing more to China's imports in recent years. As part of China's energy supply security policy, the country's NOCs are attempting to diversify supply sources in various regions through overseas investments and long-term contracts. In 2011, the Middle East supplied 2.6 million bbl/d (51 percent). Other regions that export to China include Africa with 1.2 million bbl/d (24 percent), Asia-Pacific region with 173,000 bbl/d (3 percent), and 1.1 million bbl/d (22 percent) from other countries. Saudi Arabia and Angola ranked as China's two largest sources of oil imports, together accounting for almost one-third of China's total crude oil imports. Sudan and South Sudan became significant oil exporters to China until production was shut in at the start of 2012, following political conflicts between the two African nations over their oil resources. Exports from Sudan and South Sudan to China dropped from 260,000 bbl/d in 2011 to zero by April 2012.

 

 

http://www.eia.gov/countries/cab.cfm?fips=CH

 

 

That's the article I was referring to before. I agree with the analysis, though my issue with it is that it regards China, in an embargo situation, using the same quantity of barrels/day that it does normally. That's the problem with a lot of these analyses - they confuse normal operation with contingency. China certainly won't be unfazed by an oil embargo, but is it able to survive it - in the short term and the long term - without imploding? That's the argument no one addresses - mainly because they don't begin to know how to. 

 

The whole idea that China is going to exponentially increase their oil consumption is also pretty inane. China's oil consumption is driven by its industries, which are targeted for export; their oil usage there is only going to expand exponentially when there's exponential demand. Were the US to impose a maritime oil embargo, then Chinese exports are obviously not going to continue at the same pace to the US, to which end a lot of less oil is going to be consumed. Consumer level oil usage is also not going to reach US levels; two hours of highway driving, every day, per working age adult just not going to happen for a country of 1.4 billion.

Edited December 8, 2013 by Azarkon

[Azarkon]

My thanks to kgambit for furnishing what I couldn't be bothered to. He is a better man.

 

Sorry, Azarkon, but there's no economic way you could move crude oil by land, even if the tanker capacity existed on that scale, which it doesn't. Besides, all the refineries are at the ports at the opposite end of the country. You can't just get across the border and declare yourself a winner. The entire setup would be all wrong.

 

Just look at Iran. Surrounded by sodding oil, but had a petrol crisis that nearly sparked a revolution.

 

Your point about land reform is specious, if less obviously wrong. Just because the central planning committee decide to transform farmers into urbn workers doesn't mean that they should. Central planning committees routinely make decisions on ideological, not practical grounds. China has had famines in living memory, for God's sake!

 

When talking about an oil embargo, you have a short term contingency and a long term solution. It doesn't matter how efficient it is in the short term; what you want to do there is not to have essential infrastructure shut down. In the long term, you build the refineries, the transport capacity, etc. to make the Russian/Central Asian option viable. 

 

Personally, I don't think the US wants to take the risk of China turning fully to Russia. The US worked hard in Cold War days to drive a wedge into the Sino-Russian alliance, and that remains the strategy. An Eurasian Sino-Russian-Iran-Central Asian zone is of much greater threat than limited Chinese control of the Pacific because it is THE option for bypassing the maritime advantage the US has built from WW 2. That bloc of countries have enough resources between them to be completely independent of NATO, which none of these petty rock squabbles is ever going to produce.

 

On the food issue, I simply don't buy the idea that China is incapable of supplying itself with food. Whatever figures people think they have on Chinese food imports vs. exports, this was the country that was completely isolated from the outside world just 30-40 years ago. Sure, the population's grown and the farmland's shrunk, but agricultural technology has also improved - ie via the use of hybrid rice. It is way too naive to believe that just because China is importing subsidized US produces today, it is therefore incapable of switching back to its own.

Edited December 8, 2013 by Azarkon

[kgambit]

That's the article I was referring to before. I agree with the analysis, though my issue with it is that it regards China, in an embargo situation, using the same quantity of barrels/day that it does normally. That's the problem with a lot of these analyses - they confuse normal operation with contingency. China certainly won't be unfazed by an oil embargo, but is it able to survive it - in the short term and the long term - without imploding? That's the argument no one addresses - mainly because they don't begin to know how to. 

 

The whole idea that China is going to exponentially increase their oil consumption is also pretty inane. China's oil consumption is driven by its industries, which are targeted for export; their oil usage there is only going to expand exponentially when there's exponential demand. Were the US to impose a maritime oil embargo, then Chinese exports are obviously not going to continue at the same pace to the US, to which end a lot of less oil is going to be consumed. Consumer level oil usage is also not going to reach US levels; two hours of highway driving, every day, per working age adult just not going to happen for a country of 1.4 billion.

 

 

I feel like I'm talking to a sodding wall here.    

 

Azarkon, since you are going to conveniently ignore any numbers which might disprove your preconceived notions about Chinese food supply and demand I'll provide the following information for the more open minded readers.  The increased demand for soy (Brazil thanks you) and corn is based on a increasing demand for meat (particularly) pork in the Chinese diet.  Soy and corn are used heavily as  livestock feed.  I haven't shown the charts but google Chinese meat consumption and you will find a prolonged and steady increase in Chinese meat demand; so much so that China now consumes twice as much meat as the US.  In 1978, China’s annual meat consumption of 8 million tons was only one third of U.S. levels. However, by 1992 they had overtaken the U.S. as the world’s leading meat consumer. 

 

James Rice, chief of China operations for Tyson Foods was quoted: “This is the end of self-sufficiency for China. This year (2012) will be the last in which China produces enough corn for itself, and the last that it is self-sufficient in protein.”

 

http://www.grain.org/media/BAhbB1sHOgZmSSIqMjAxMi8wNy8zMS8xMV8wNV80N18zMF9QaWN0dXJlXzIzLnBuZwY6BkVUWwg6BnA6CnRodW1iSSIJNjAweAY7BlQ

 

https://encrypted-tbn3.gstatic.com/images?q=tbn:ANd9GcSDMV_Lsg52Cn9PYV5mAtip7KjgE9bQP1MWfO_mbRJ9aQOiBQsd

 

So China is NOT self sufficient and to make matters worse it's agricultural sector is notoriously inefficient.  And in terms of arable land per capita, China for all it's size is far worse off that you might believe. 

 

 

Believe anything you want, but the numbers don't lie.   None of this means that the Chinese are starving but it does mean that China is simply not a self sufficient country with respect to either energy use or food supplies.

 

You should google China car usage.   It's not at US levels per capita but ownership is rapidly increasing in China - exponentially too.  lol 

 

http://www.usfunds.com/media/images/investor-alert/-2011-ia/2011-10-28/COMM-NumberChinaVehiclesGrowingRapidly-10282011.gif

 

The issue of whether China can withstand a short term oil embargo was answered a couple of posts ago.  China has recently completed the second stage of their SPR (Strategic petroleum reserve with an estimated capacity 207 million barrels) that will provide a potential replacement for 30 days of imports.  Longer term?  Domestic Chinese oil production is flat, and has been for a number of years, at around 3.2 million barrels a day.  Thinking that Chinese austerity measures can reduce domestic demand so that the  6.3 million barrels of imports are not needed is the only inane comment in this argument.   That would require that Chinese production be brought to a nearly complete standstill since 77% of Chinese energy is consumed by the industrial sector.   And if they shut down undustries how will they generate capital to pay for imported oil and food?

 

As for chinese oil demand increasing exponentially, I suggest you simply look at the following graph.  Ignore the extrapolation and look at the data thru 2013.  That's not a linear trend bubba .....  A sustained 7% yoy increase is exponential growth.  Is that trend likely to continue?  Maybe, maybe not - but Chinese demand has been growing exponentially since around 1990 so I would bet that continued exponential growth in the short term is not unreasonable . 

 

 

 

I'm not advocating an embargo, but simply pointing out that China will NOT be able to survive a long term one. 

 

Edit:  Sorry some of the images would not link using the image tag.  Use the links to open them..

Edited December 8, 2013 by kgambit