Tue. Dec 6th, 2022

Prof. ST Hsieh

Director, US-China Energy Industry Forum

626-376-7460

[email protected]

September 13, 2022

The public sentiments in the US are clear that no one is happy about what is going on and yarns for changes. But US voters are sharply divided on what should be changed and who should lead the US in this challenging time. Several global trends are clear:

  1. COVID-19 pandemic is not over yet, and it may never pass. It is not only a public health issue, but the global supply chains have been weakened.
  2. After years of globalization, the pendulum swings to the other direction. The world is “decoupling” with further impediment to the integrity of the global supply chains.
  3. The Russian-Ukraine war, started more than 200 days ago, have forced a “sudden divorce” between Russia and Europe. Sanctions and retaliations between Russia and Europe have triggered an “energy war.” As Europe is rushing to “damage control” the unprecedented “energy crisis,” social unrest in the cold winter might become a reality.
  4. Unfortunately, even the ground war is limited in Ukraine, the shift in geopolitics and stresses on global economy have already initiated without any sign of re-set. In the sense that even after the war in Ukraine is over, it will take decades or generations to repair the damages.
  5. A new world order will have to be established, because the “current world order” is beyond repair. It also seems that a new cold war between different camps is inevitable.

The US has identified and publicly acknowledged that Russia is an imminent military rival (Ukraine war), and China is a permanent rival (trade war) so no one should be surprised that “Xi, Putin Building ‘More Just’ World Order.” Of it means that a new “more just world” will be more favorable to China-Russia than the current world order dominated by the US. However, “more just” does not have to mean hurting the core interests of the US and west. Rather, if both camps respect each other’s core interests, cold war does not have to become a hot (nuclear) war which only means a quick ending of human civilization.

The world is a big enough space for two different camps. The world is also facing severe “global challenges” including the unending COVID-19 pandemic and the imminent climate changes. Two major camps with different ideology and governance can co-exist and compete peacefully.

Xi, Putin Building ‘More Just’ World Order, Top China Envoy Says

Mon, September 12, 2022 at 6:38 PM

(Bloomberg) — China is willing to work with Russia to take the global order “in a more just and reasonable direction,” Beijing’s top diplomat said, underscoring the depth of the two nations’ ties.

Under the guidance of President Xi Jinping and President Vladimir Putin, “the relationship between the two countries has always been on the right track, and both sides firmly support each other on issues relating to their core interests,” Yang Jiechi told Russian Ambassador Andrey Denisov in a meeting in Beijing on Monday.

“The Chinese side is willing to work with the Russian side to continuously implement high-level strategic cooperation between the two countries, safeguard common interests and promote the development of the international order in a more just and reasonable direction,” Yang said, according to a Foreign Ministry statement.

Xi plans to travel to Kazakhstan and Uzbekistan this week for his first trip abroad since the start of the pandemic two years ago. Uzbekistan is hosting the Shanghai Cooperation Organization summit Thursday and Friday, giving him a chance to meet Putin in person for the first time since Moscow began its invasion of Ukraine in February.

Xi, Putin Set for First Meeting Since Russia Invaded Ukraine

China has sought to present itself as a neutral party in Russia’s war, despite Xi’s declaration of a “no limits” partnership with Putin weeks before the attack. While Beijing has not explicitly criticized the war, its leaders have also avoided providing sanctions relief or military supplies to Russia.

Chinese exports of cars, televisions and smartphones helped Russia fill a void when foreign brands fled. In the second quarter, 81% of Russia’s new car imports were Chinese, and Xiaomi Corp. was Russia’s best-selling smartphone maker.

Russia wants to buy millions of rockets and artillery shells from North Korea for the war, US officials have said, a sign that international sanctions are forcing Moscow to seek help from the nation’s smaller, poorer neighbor.

The Xi-Putin meeting would add to a flurry of diplomatic activity between Beijing and Moscow in recent weeks. China and India participated in major military exercises in Russia’s Far East, while Beijing’s No. 3. official Li Zhanshu spoke in person at the Seventh Eastern Economic Forum in Vladivostok last week.

In the meeting with Yang, Denisov said the relationship between the nations had yielded positive results, according to the Foreign Ministry statement.

Xi Returns to World Stage With Putin to Counter US Dominance

Rebecca Choong Wilkins

Tue, September 13, 2022 at 7:33 AM

(Bloomberg) — In the almost 1,000 days since Xi Jinping last ventured abroad, China has found itself increasingly isolated within the US-led world order. He’s finally reemerging this week alongside Russia’s Vladimir Putin to showcase his vision for a viable alternative.

Thursday, Xi and Putin will hold their first in-person meeting since Russia invaded Ukraine, according to the Kremlin, in a sign that Beijing sees the relationship as crucial to countering the US. It will occur on the sidelines of a Chinese-founded security forum in Uzbekistan that gathers countries ranging from India to Iran — a grouping that aims to accelerate the formation of a multipolar world.

Prior to that, Xi on Wednesday will stop in Kazakhstan, where he unveiled what would be become his signature Belt-and-Road trade-and-infrastructure plan nine years ago. That foreign-policy initiative has since become a focal point of the US and its allies in the Group of Seven, which in June announced plans to raise $600 billion in financing so lower-income countries have an alternative to Chinese cash.

Both stops will reinforce Xi’s vision of a world where China can expand its interests without fearing the threat of economic or military pressure from the US. The Chinese leader will expound on that agenda at a twice-a-decade party congress next month, during which he’s expected to secure a third term as leader of the world’s second-biggest economy.

“Xi Jinping is trying to reorient global affairs in a direction that de-centers Western institutions and promotes groupings and institutions that are more favorable to China’s interests and worldview,” said Trey McArver, co-founder of research firm Trivium China. Xi’s meeting with Putin, he added, “sends a very clear signal that China continues to tilt toward the side of Russia in that conflict.”

The stakes are rising for both Xi and Putin, who declared a “no limits” friendship just weeks before Russia invaded Ukraine in February. In recent days, Putin has seen Ukraine push back Russian forces and retake large swathes of land, while Xi has been under pressure to adopt stronger measures to prevent Taiwan from boosting relations with the US and its allies.

China has so far avoided doing anything that would make it subject to US sanctions or help Russia win the war, even as Beijing provides Putin with diplomatic support and increases trade with its northern neighbor. China’s interest in helping Russia appears more geared toward rebutting US moves that could also one day be used against Beijing.

“China has not stepped up to supply Russia with weapons or advanced electronics during the war,” said Iikka Korhonen, head of research at Bank of Finland Institute for Economies in Transition. “They are mindful of not violating these actions, at least not in an obvious way, so there are limits about what these so-called allies are prepared to do.”

Moscow has sought to trumpet China’s support for the war. Last week it released statements citing Li Zhanshu, China’s No. 3 official, telling Russian lawmakers that Beijing’s leaders “fully understand the necessity of all the measures taken by Russia aimed at protecting its key interests, we are providing our assistance.”

Russia and China will step up efforts to counter NATO’s expansion and the US-led campaign to keep the two nations in check, Li also said, according to the TASS news agency. “We will battle together their hegemony and the policy of force,” it cited him as saying. The comments weren’t reported by China’s Foreign Ministry or state media.

Putin last week attacked US-led democracies at an economic forum in the Russian port city of Vladivostok, whose participants included Myanmar’s sanctioned coup leader and Indian Prime Minister Narendra Modi. “Western countries are seeking to preserve yesterday’s world order that benefits them and force everyone to live according to the infamous ‘rules,’ which they concocted themselves,” Putin said.

Similar sentiments are likely to be expressed at the meeting of the Shanghai Cooperation Organization. The group, set to meet Sept. 15 and 16 in the southeastern Uzbek city of Samarkand, accounts for 42% of the world’s population and 25% of global gross domestic product.

An appearance by Xi at the forum will reinforce the idea of an alternative to US power that includes Western-aligned powers like India and Turkey, according to Raffaello Pantucci, a senior fellow at the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore. India has moved closer to the US in recent years, most notably through the Quad grouping that also includes Australia and Japan.

Although the SCO is more symbolism than substance, economic ties within the group are crucial. As inflation surges around the globe, Russia is a source of cheap energy for members such as India.

China’s trade ties with Moscow have expanded despite the US sanctions since the war: Russia’s exports to China jumped nearly 50% to $40.8 billion in the first five months of the year, IMF data show. That includes big increases in oil and gas.

Putin aims to use talks with Xi to expand trade further with China and to obtain more industrial and technological imports to fill the hole left by the absence of Western goods because of sanctions, said Vasily Kashin, an expert on Russia-China ties at Moscow’s Higher School of Economics. Chinese exports of cars, televisions and smartphones have all helped Russia fill a void as foreign brands flee.

China sourced almost 40% of its coal imports from Russia this year as authorities reckoned with a domestic energy crisis, up from about 30% during the same period last year, according to customs data. China has also snatched up Russian liquefied-natural-gas shipments at a hefty discount as most other importers shun the fuel. LNG deliveries in August surged to the highest level in about two years, according to ship-tracking data.

Politically, the visits to Uzbekistan and Kazakhstan also allow Xi a comfortable environment to return to the international stage ahead of the Group of 20 summit in Bali in November. Xi is prioritizing engagement with “friends and partners” rather than allowing the G-20 meeting to be his first overseas visit since the Covid lockdown, according to Steve Tsang, director of the China Institute at SOAS University of London.

“China and Xi can effectively set the agenda for this visit, something they cannot be certain of for a G20 summit,” he said. “Engaging with the US and the West is not seen as equal in importance.”

(Updates with Kremlin announcement of Xi talks in 2nd paragraph)

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