China's Crude Conscience

August 10, 2006

EL FASHER, Sudan -- In a squalid hut in Zam Zam refugee camp, 16-year-old Salim Adam swats flies from the livid scar where a bullet tore through his leg. Two years ago, Mr. Adam was farming with his father when the Janjaweed, a Sudanese government-backed militia who have executed a brutal campaign of ethnic cleansing in Darfur, surrounded his village, firing rifles. "They grabbed my father. They demanded money and, when we had none, they shot him here" he says, smacking his palm against his forehead. Mr. Adam fled, gunfire at his back. Somehow, he dragged himself to a donkey. He cannot remember how long he rode across the desert before reaching Zam Zam.

The bullet that shattered Salim Adam's leg and the gun that fired it were almost certainly manufactured in China. The militiaman who pulled the trigger was likely compensated with revenues from Chinese oil purchases, which fund a majority of Khartoum's military actions. And the reason no help has come to Darfur is, in large part, because China has blocked every attempt to deploy a United Nations peacekeeping force. Though estimates vary, most data suggest that the death toll in Darfur has reached around 450,000, and is still rising.

By the time the world awakened to the slaughter here, China was already funneling money into Khartoum. Beijing's investments in Sudan now total around $4 billion. With a 40% stake each in the Greater Nile Petroleum Operating Co. and Petrodar, state-owned China National Petroleum Corp. owns the largest shares of both of Sudan's national oil consortia. And in 2005, Beijing purchased more than half of Sudan's oil exports. China now relies on Khartoum for about one-tenth of its massive oil needs, placing Sudan just behind Saudi Arabia and Iran as China's largest energy supplier by volume.

It is an unholy alliance. The U.N. imposed an arms embargo when it became apparent that the Government of Sudan's military actions in Darfur were overwhelmingly directed against helpless civilians. And yet China continues to supply Khartoum with assault helicopters, armored vehicles and small arms. Last August, Beijing sold 212 military trucks to Khartoum. Chinese oil company airstrips in southern Sudan have been used by government forces to conduct bombing raids on villages and hospitals. A U.N. investigation conducted this year determined that the vast majority of weaponry used to attack civilians across Darfur is of Chinese origin.

Thanks to this relationship, Sudan has purchased the best protection in the world: a veto-wielding member on the U.N. Security Council willing to ensure that Khartoum's campaign of human destruction in Darfur can continue.

The U.N. measures that have been passed have been hopelessly enfeebled by Beijing. In July 2004, China watered down a bill that would have demanded that Khartoum prosecute militiamen accused of atrocities, removing language that threatened sanctions. They did so again in September 2004, when -- in a U.S.-sponsored resolution -- a commitment that the U.N. "will take" punitive action was replaced with an impotent "shall consider" wording. In April, when the Security Council considered targeted sanctions on Khartoum's leadership, China withdrew their strenuous veto threats in the face of mounting international pressure, but only after ensuring that the list was stripped of all high-level officials.

On May 16, the Security Council finally voted on a resolution that compelled Sudan to admit a U.N. peacekeeping assessment mission. China withdrew its veto threat only after the resolution had been gutted of key language that would have allowed some U.N. peacekeepers from a force already in southern Sudan to move to Darfur. And they did so with an explicit declaration from China's Deputy Permanent Representative to the U.N., Zhang Yishan, that their vote "should not be construed as a precedent for the Security Council's future discussion or the adoption of new resolutions against Sudan."

China slams Western colonialists but grabs African oil

28 April, 2006
Beijing (AsiaNews/SCMP) – China is becoming more active politically and economically in Africa, declaring that it does not want to “pillage” the continent’s resources the way Western colonialists have done. And yet its main goal is extracting raw materials, oil first, relying on its own companies with little local developmental spin-off.

“We will not repeat the mistakes of the bloody pillaging [of Africa] and human rights abuses of the Western colonisers,” Foreign Ministry spokesman Qin Gang said yesterday. “China is a responsible country.”

Speaking before Nigeria’ parliament Chinese President Hu Jintao said that by “the year 2020 . . . GDP would quadruple that of 2000 to reach US trillion, averaging US$ 3,000 per head”. Hence, he told Nigerian lawmakers, Beijing would be able to provide Africa with help to fight diseases and back African Union efforts to end conflicts across the continent. “China's development will not pose a threat to anyone. On the contrary, it will bring more development opportunities to the world,” he stressed.

“From our assessment this is the century of China to lead the world,” Nigerian President Obasanjo said at a late-night banquet in honour of the Chinese leader. “And when you're leading the world we want to be very close behind you.”

Hu reassured his Nigerian counterpart that China wants to deal with Africa on equal terms and for their mutual advantage, develop relations that are based on friendship and respect for the development of the world’s peoples and peace.

Many analysts are however less sanguine about China’s intentions and highlight the gap between what China says and what it does. First of all, Beijing is investing in poor but mineral-rich countries like oil and gas, iron, cobalt, wood, etc., but its investments benefit only minimally local mining sectors since activities are carried out by Chinese state companies whilst oil is shipped to Chinese refineries and terminals.

Furthermore, there is little capital investment in local economies since raw materials are often paid in public works provided by Chinese and only Chinese companies. Low-end labour might be local, but management remains Chinese. Under such terms African countries are locked in since breaking any deal would mean leaving works incomplete. And financing is done by Chinese banks.

Dammed and dying: The Mekong and its communities face a bleak future

One of the world's greatest rivers has been reduced to a trickle in places by a series of giant Chinese dams
and engineering works which are threatening the livelihoods of up to 100 million people in south-east Asia.
A body representing four downstream governments reported yesterday that the Mekong was at its lowest
recorded level, flowing "close to rock bottom" near the end of a 3,000 mile journey that takes it from
the Tibetan plateau, through China's Yunnan province, Burma, Thailand, Laos, Cambodia and Vietnam.

China Stakes Claim for Global Oil Access

BEIJING ― When Alberta Premier Ralph Klein toured China last year and invited business leaders to visit the Canadian province's oil sand deposits, he didn't expect an immediate response.
But when Klein returned home a week later, Chinese executives were already making the rounds in Alberta, where the oil sands region is roughly the size of Florida and is believed to contain the richest reserves after Saudi Arabia.

The executives' quick response paid off. Three of China's state-owned oil firms have since poured huge investments into the oil sands, including a 40% stake in a $3.6-billion project that will be able to send oil via a new pipeline to Canada's west coast for shipment to China and elsewhere.
"Clearly, China has been the talk of Calgary," said Steven Paget, an analyst for investment bank FirstEnergy Capital Corp. there.

During the last two years, President Hu Jintao and Premier Wen Jiabao have taken oil executives on trips to oil-rich countries from Algeria to Uzbekistan to seal major deals.
The government in Beijing has welcomed top officials from all 11 members of the Organization of the Petroleum Exporting Countries. A major point of a trip Hu made to Moscow this month was to secure access to Russia's vast reserves.

Chinese crews are building roads in Africa in exchange for the right to extract oil from remote regions. Viewers in Saudi Arabia, a nation that U.S. oil firms once had to themselves, now watch Chinese programs on satellite TV as China drills into Saudi sands. China is also taking advantage of tensions between the Bush administration and Venezuelan President Hugo Chavez to wrest oil from one of the largest U.S. suppliers.

To secure deals worth tens of billions of dollars, Beijing is cozying up to regimes in nations, including Iran and Sudan, that Washington labels pariahs. And it is flexing its military muscle to lay claim to contested fields in East Asia.
China's aggressive search is putting it in growing competition with the United States, the world's largest oil consumer. Some observers even warn of a possible showdown between the two economic giants.

Friction between Washington and Beijing has also surfaced in Sudan, where state-held China National Petroleum Corp. has a 41% stake in Petrodar, a major Sudanese oil consortium. Sudan's relatively small production is expected to reach 500,000 barrels a day this year.
In September, Beijing frustrated a U.S.-led bid to impose tough U.N. sanctions against Sudan after government-backed militias committed atrocities against the non-Arab population in the Darfur region.

Sudanese Information Minister Abdel Basit Sabdarat said the U.S. had pushed Khartoum to limit its ties with Chinese oil companies. "But we refuse such pressures," he said. "Our partnership with China is strategic. We can't just disband them because the Americans asked us to do so."
When Uzbek President Islam Karimov arrived in Beijing nearly two months ago, Chinese greeters handed him a lavish bouquet and guided him across a bright red carpet as Chinese oil executives waited in the wings to sign a $600-million joint venture.

"This is an important step for energy cooperation," Karimov told the People's Daily, the Communist Party's newspaper.

Weeks before Karimov's visit, Uzbek troops fired on protesters in Uzbekistan's Andijon area, resulting in 700 deaths, according to human rights groups. The government disputed that figure, saying only 187 people died, most of whom were "lawbreakers."
After the clashes, Beijing promptly said it would oppose any U.S. or European calls for a U.N. inquiry, describing the Uzbek crackdown as a justifiable move against "terrorism, separatism and extremism."

China's Demands Anger Congress, May Hurt Bid

By Jonathan Weisman
Washington Post Staff Writer
Wednesday, July 6, 2005; D01
Members of Congress from both political parties reacted with angry surprise yesterday to the Chinese government's demand that they correct their "mistaken ways" and "stop interfering" with a Chinese company's bid to acquire a U.S. oil firm.

Lawmakers suggested the broadside would only toughen Washington's scrutiny of the proposed takeover of Unocal Corp. by CNOOC Ltd., a Chinese energy firm controlled by the government.

"How are they going to demand anything of us, elected members of the Congress, the highest branch of the government?" asked Rep. Carolyn Cheeks Kilpatrick (D-Mich.), author of a House amendment, approved last week 333 to 92, that would cut off funds for a federal security review needed to allow the deal to proceed. "We're a democracy. We're not communists."

"At the very least, they have solidified -- if not exacerbated -- concerns of members of Congress here, by telling Congress to butt out," said Brian Kennedy, a spokesman for Rep. Richard W. Pombo (R-Calif.), chairman of the House Resources Committee. Pombo was co-author of a resolution, passed 398 to 15, expressing concern that the takeover bid could threaten national security.

Since CNOOC made its unsolicited, $18.5 billion bid for Unocal, CNOOC officials and their representatives in the United States have been careful to distance the company from the Chinese government and to paint the transaction as purely a business venture. But the Chinese Foreign Ministry upset that orchestration Monday with a prepared, strongly worded statement addressed directly to Congress.

China tells US to stay out of oil company takeover

Shanghai Bund
By Kathy Fong
THE Chinese Government on Monday sharply criticised the United States for attempting to prevent China's CNOOC Ltd from taking over American oil company Unocal Corp.

Four days after the US House of Representatives overwhelmingly approved a resolution urging the Bush administration to block the proposed transaction as a threat to national security, China's Foreign Ministry excoriated Congress for injecting politics into what it characterised as a standard business matter.

“CNOOC's bid to take over Unocal is a normal commercial activity between enterprises and should not fall victim to political interference. The development of economic and trade co-operation between China and the United States conforms to the interests of both sides.”

Those words officially elevated the takeover battle for Unocal into a bilateral issue involving Washington and Beijing, raising the stakes of the outcome.
CNOOC's bid has taken China across a new threshold: It has unleashed the first takeover battle between a Chinese company and a US firm, the oil giant Chevron Corp, which was prepared to buy Unocal for US$16.5bil (RM62.7bil). If completed, CNOOC's purchase – its bid price is US$18.5bil (RM70.3bil) – would be the largest foreign takeover ever by a Chinese firm.

But as the price of oil continues to soar, underscoring the finite supply of global stocks, some members of Congress portrayed China's appetite for energy as a threat to US interests. They are painting CNOOC's effort to buy Unocal as an attempt to siphon off oil that would otherwise land in the United States, a proposition that analysts call dubious because most of Unocal's outstanding contracts supply customers in Asia.

Meanwhile, the speed of development in coastal cities, such as Shanghai, Guangdong and Shenzhen, are representative of China's 20 years of robust economic growth.
Income per capita and the standard of living here are much higher compared with the inner regions of the vast mainland.

But not everyone is riding on the economic boom.
Statistics show that a small group of the rich have got the lion’s share of the wealth and the portion is growing over the years at the expense of the poor.
A recent survey by China’s National Bureau of Statistics found that city folk in the highest-income bracket earned 11.8 times more than those at the other end of the scale in the first quarter of this year.
According to the Ministry of Labour and Social Security, the richest 10% of households own 45% of urban wealth.
The poorest 10% of urban households have less than 1.4% of the wealth in Chinese cities.
All this point to a yawning gap between the rich and the poor in the cities which poses another big challenge to the Chinese Government which is working hard to improve the less developed regions.

China's Wasteful Ways


Colossally inefficient use of energy penalizes China twice: With high costs and the
ravages of pollution

When Chinese Vice-Premier Zeng Peiyan swung by the Beijing headquarters of steelmaker
Shougang Group on Mar. 24, it wasn't a courtesy call. He confirmed rumors China's State
Council had ordered Shougang to wind down its Beijing iron-and-smelting operation by 2007
and transfer the facilities out of the city. Shougang plants, mainly fueled by coal,
belch out 18,000 tons of dust and contaminants a year, and Beijing is determined to clean
up in time for the 2008 Olympic Games.
Leave the sticky worm alone as it stands-My mission's in progress-

Shougang's departure will do more than reduce pollution: It will take a 40-year-old mill
out of circulation and force Shougang to build a far more efficient facility. The energy
needs of a fast-growing economy of 1.3 billion people are huge, of course. But China is
also a world-class waster. University of Alberta political economist Wenran Jiang
calculates China spends three times the world average on energy -- and seven times what
Japan spends -- to produce $1 of gross domestic product. It also is far more inefficient
than nations like Brazil and Indonesia. "China needs to shift from a high
energy-consumption model of development to a green model," says Hu Angang, director of
Tsinghua University's China studies center.


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