We live in the same dream world our forefathers did – in utter denial of what history teaches us. China now has investments from small to very large in over 25 African states and apart from the odd “gracious me!” this fact is simply taken as something no one can do anything about.
Europe is coming apart at the seams and while the very best of the world’s economists have solutions which might work, no one seems to have given a clear picture of what happens if the wheels fall off.
The whole idea of the original “Common Market” was to bring and retain peace in the region and was spawned by Winston Churchill’s speech in Zurich in 1946 when he urged France and Germany to get their economic acts together, especially in the coal and steel areas, so that they would eliminate the never ending enmity which had caused them to go to war three times since 1870.
Ironically, it was Churchill who, as First Lord of the Admiralty, switched the Royal Navy from coal to oil in 1911 which brought Persia (Iran) into the sphere of British Imperialism. From this moment to the aggressive Iran of today, is one connected line.
Although imperialists like Cecil Rhodes and Rudyard Kipling like to romanticize about British constant and often brutal interference into the affairs of others as something of a moral duty, “the White Man’s burden and crap like that, it was the oil or other natural resources, not spreading democracy, which spurred Britain’s capture of 1/4 of the world.
This is not to say that financial greed was the only reason for expansion but it was the major one. There are, of course, political, often geo political reasons why a big power controls lesser players. Probably the best example of this has been Britain’s involvement. Indeed its annexation of Ireland. The “emerald isle” had the bad luck to be an excellent jumping off point for a French or Spanish invasion of Great Britain. Far from being a good investment, Ireland has been a political nightmare. The central point is that where money or political influence or both go, force follows.
The Middle East is a major and fairly recent example of what I’m driving at – the US and Britain have made a big noise about toppling monstrous dictatorship while the real reason has been oil.
Countries where the Americans, almost back to the beginning of the American nation, have made their biggest investments have danced to the American tune. Whether it be fruit, or more recently oil, lofty motives of bringing democracy seems to happen most often when US investment is at stake.
China is an interesting study. In the first place, it’s a great place to see how European nations used force to protect their investments. The Opium Wars, also known as the Anglo-Chinese Wars, divided into the First Opium War from 1839 to 1842 and the Second Opium War from 1856 to 1860, were the climax of disputes over trade and diplomatic relations between China under the Qing Dynasty and the British Empire; far from being lofty efforts to end the opium trade, were fought so that Britain could force the trade on a reluctant China – its overpowering, if not only motive was to protect the its role as a wholesale pusher of drugs,
Since the end of the Cultural Revolution, China has moved from being a stand-offish land of mystery to a huge player on the world scene investing, as mentioned, in more than 25 African nations. At the same time, China all but owns the USA, which only survives economically because China can’t afford to see the US economy go in the dumper. In the meantime, China is in economical trouble of its own.
In the words of British journalist, Mark Kitto, a long time resident of China in the August 2012 issue of Prospect, “Take the recent cut in interest rates, which was done to boost domestic consumption, which won’t boost itself until the Party sorts out the healthcare system which it hasn’t the money for because it has been invested in American debt, which it can’t afford to sell without hurting the dollar, which would raise the value of the yuan and harm exports, which will shut factories and out people out of work and threaten social security”.
This “Catch-22” extends to Canada too. China has several billion dollars invested in the Tar Sands in Northern Alberta. These tar sands, after literally being dug from the ground, produce a gunk called bitumen which, mixed with a condensate of natural gas and other chemicals, is then to be piped to China where it’s refined into oil.
The problem is, the price of oil has to be in excess of $100 a barrel or its not economically viable. With oil now in the $80 range China’s investment is shaky. They are gambling that the shortage of oil will drive the price higher and make everything right. The problem, at least in the short term there is an abundance of oil. (So here we have another strange irony – in order for China to justify its oil deal in Canada, the price has to go up!)
It should be added that the Tar Sands pipe and oil tanker scheme of using British Columbia as the place through which the bitumen is transported has run into very stormy weather indeed.
Now to the meat of the matter. China, for all its apparent prosperity is in economic doo-doo. It can’t afford to call in its biggest loans because she would be shooting herself in the foot, big time. Thus her investments in other parts of the world must be made safe and sound.
The trouble is, far from being safe and sound, these investments are in very unstable countries to say the least. For example, the split in Sudan with one side getting most of the oil leaves great unrest likely if not certain. What does China do if its investments are placed in such jeopardy that she must find a way to get warring factors to back off their bloodbaths? That problem, through the years has not been easily – or peacefully – solved.
China has, it seems to me, only one option – gunboat diplomacy followed with force. This is the way it’s always been done and why should it be any different in this situation? The words “ah, hell, it can’t happen”, have historically been heard just before it in fact happens. Given China using force in Africa, what then would The United States and/or Russia do? What could they do?