[westexas]

News story the US Should be worried about

http://pacificsentinel.blogspot.com/2014/06/news-story-us-should-be-worried-about.html

Two recent items follow. I somehow don’t find it very comforting when the US Secretary of State describes armed conflict between China and the US as “Not inevitable.”

China tells U.S. to stay out of South China Seas dispute

http://www.reuters.com/article/2014/07/15/us-china-usa-asean-idUSKBN0FK0CM20140715

(Reuters) – China told the United States on Tuesday to stay out of disputes over the South China Sea and leave countries in the region to resolve problems themselves, after Washington said it wanted a freeze on stoking tension.

Michael Fuchs, U.S. deputy assistant secretary of state for Strategy and Multilateral Affairs, said no country was solely responsible for escalating tension in the region. But he reiterated the U.S. view that “provocative and unilateral” behaviour by China had raised questions about its willingness to abide by international law.

China claims 90 percent of the South China Sea, which is believed to contain oil and gas deposits and has rich fishery resources. Brunei, Malaysia, the Philippines, Vietnam and Taiwan also lay claim to parts of the sea, where about $5 trillion of ship-borne trade passes every year.

China’s Foreign Ministry repeated that it had irrefutable sovereignty over the Spratly Islands, where most of the competing claims overlap, and that China continued to demand the immediate withdrawal of personnel and equipment of countries which were “illegally occupying” China’s islands.

Beijing’s Appetite for Engagement Ebbs
http://online.wsj.com/articles/beijings ... reno64-wsj

The U.S. project to engage China has been a roller coaster ever since (Nixon’s visit to China). The Tiananmen Square massacre, whose 25th anniversary passed last month, sent the relationship into free fall.

Today, there’s little doubt we’re in a new slump. This one looks very different, though. Previous lows were often triggered by a tragic event, like the Tiananmen killings, or the accidental U.S. bombing of China’s Embassy in Belgrade in 1999 that resulted in government-sanctioned mobs pelting the U.S. Embassy in Beijing with rocks. The latest decline reflects a deeper malaise. Disillusion seems to be taking hold on both sides. From the U.S. perspective, engagement with China hasn’t brought forth the kind of change that Nixon—and every U.S. administration since—has hoped for and expected.

U.S. policy makers see a frustrating paradox: at a time when China’s economy is in triumphant ascendance—thanks in large part to America opening its vast markets to Chinese trade—the old hatreds that Nixon remarked upon are burning more brightly than ever. Meanwhile, China’s neighbors once again feel threatened. A study by the Pew Research Center released this week showed that large majorities in many Asian countries fear that China’s aggressive territorial moves in the region could lead to war.

Since taking office early last year, China’s President Xi Jinping has been emphasizing a resentful type of nationalism that seeks to settle scores for the country’s “century of humiliation” at the hands of imperialist powers. That’s driving China into an uncompromising quest to recover territory it believes was stolen when the country was on its knees. . . .

Both sides talk frankly these days about the danger of strategic rivalry leading to armed conflict. “It is not inevitable,” Mr. Kerry told his audience in Beijing. “It is a choice.”

As enthusiasm for engagement ebbs, however, the options for a constructive relationship are narrowing.

The GNE/CNI Chart follows. I estimate that the GNE/CNI value for 2013 will be down to between 4.6 and 4.7, which would be consistent with the observed 2005 to 2012 rate of decline. At an GNE/CNI Ratio of 1.0, China & India (China & India’s Net Imports = CNI) alone would theoretically consume 100% of Global Net Exports of oil (GNE). ANE (Available Net Exports) = GNE less CNI.

Absolutely key point: Given an inevitable ongoing decline in GNE, unless China & India cut their consumption of GNE at the same rate as the rate of decline in GNE, or at a faster rate, the rate of decline in ANE will exceed the rate of decline in GNE, and the rate of decline in ANE will accelerate with time (on a year over year basis).

At the observed 2005 to 2012 rate of decline in the GNE/CNI Ratio, it would be down to about 2.0 in 2022, which would imply that China and India would be consuming 50% of Global Net Exports of oil.

I’ve described what happens to the GNE/CNI Ratio from 2012 to 2022, and in subsequent years, as the $64 Trillion question.

[Paulo1]

re statement: "which would imply that China and India would be consuming 50% of Global Net Exports of oil. "

I would assume that this consumption will be determined in the marketplace with many different countries bidding for the product. China is basically as broke (in debt) as the US. India is a basket case. The US is like the homeowner checking his mailbox to see if there are any new credit car applications that can be used and maxed out. Unfortunately, they all have nukes and big armies.

2022? is not very far away. Maybe it is just me watching too much news, but doesn't it seem as if everything; every conflict, standoff, crisis, weather event, etc. is accelerating? That is to say the time frame of stability is shortened. Or, does it just seem that way because of the reporting?

Islamists or Chinese?, there will be a war prertty damn soon, imho. I continue to bet it will start over Israel bombing Iranian nuke sites/infrastructure and the Straits are closed due to attacks and mining. The pie continues to shrink and everyone feels entitled to a piece.

Paulo

[Paulo1]

Just wondering:

Will they shove the new Chinese homeowners (that have bought all the luxury properties in the US to get their money out of China) into internment camps like they did the Japanese in NA? Or, do these folks already own a few congressmen and senators?

Paulo

[westexas]

What has happened is clear, but as we all know what will happen is less clear. In any case, here is the key consumption chart from 2002 to 2012. Based on BP data, China's consumption was up to 204% (of 2002 consumption) in 2013, while the US showed a year over year increase (up to 96% of 2002 consumption, versus 94% in 2012).




As noted above, given an inevitable ongoing decline in GNE (Global Net Exports of oil), unless China and India cut their consumption of GNE at the same rate as the rate of decline in GNE, or at a faster rate, the resulting rate of decline in ANE will exceed the rate of decline in GNE, and the ANE decline rate will accelerate with time.

CNI = Chindia's Net Imports
ANE = GNE less CNI

I estimate that ANE were down to between 33 and 34 mbpd in 2013, versus 41 mbpd in 2005:

[Pops]

Thanks WT

Mao said America is a paper tiger, and he was right. We haven't fought a war over territory or in self defense for 70 years, all our wars have been for corporate and domestic political advantage.

How committed can a nation be to expanding EXXONs reserves?

We (the lower class) went to Iraq the first time because they were throwing Kuwaiti babies out of hospital incubators and the second time because of mushroom cloud sticks and cakewalk carrots.

We don't have the stomach for real war, basically because it would require some sacrifice by people who vote.

[SteveO]

If war breaks out between the US and China, China will win it simply by keeping the container ships in port. The US economy will collapse without a steady supply of smart phones, xBoxes, flat screen TVs, salad shooters and all the other crap that comes from China and is on the shelves of WalMart, Target, and all the other retailers.

[kuidaskassikaeb]

You know when there is no available oil to buy the U.S. will be energy independent. So now we'll fight a war to avoid it, and how are we going to fight a war with no extra oil?

China is a nation of only children. They aren't gonna want one either.

I realize the wars are not a rational thing, but this one doesn't seem likely. We'll probably just give up when someone calls in our debts.

[efarmer]

Not inevitable? Not doable.

MAD used to be a nuclear scenario, now it is a financial scenario. The corporations that run the United States Federal Government by proxy could not continue to operate under such a scenario. They would have to change their tactic of governing the US from having two neutered totem animal parties holding each other in contempt and stalemate to attempting to have them lead organized efforts, which is something they are not capable of doing.

Look at some of our leadership from the outside perspective, for example the War on Drugs turning Mexico and Central America into narco terrorist fiefdoms, and a Texas Governor who wafted secession from the United States two years ago, demanding the President to send armed 20 something,National Guard troops to the border en force to intercept 6 to 18 year old refugee children and pouting for the media when he met with them. Then turn around and tell China you are taking a hard stand on human rights and demand they change their policies. Follow that up with the Supreme Court steadily asserting the equivalence of human citizens and corporate entities who are their real lifeblood and taskmasters.

[KaiserJeep]

China seeks to dominate the South China Sea and the East China Sea.

The South China Sea has the oil-and-gas-rich Spratly Islands, which are part of a 3-way tussle between China, Vietnam, and the Philippines. Then there are the Paracel islands, jointly claimed by Vietnam and China, also rich in petroleum. Finally there is the Scarborough Shoal, jointly claimed by China and the Philippines, which not only has petroleum, but must be developed carefully because it is the spawning grounds of the majority of fish species in the Northern Pacific.

The East China Sea has the Diaoyu/Senkaku Islands, claimed by China, Taiwan, and Japan. These were historically Japanese since 1895 and were administered by the US from 1945-1972, and are pretty much dominated by Japan today, although China and Japan both take lots of fish. There are believed to be extensive oil fields, but intensive exploration for petroleum has not been done.

The US has treaty obligations to Japan and Taiwan, and to a much lesser extent the Philippines. We used to have a Carrier Strike Group in both Japan and the Philippines, but the one in the Philippines fell back to Hawaii after the Mt. Pinatubo eruption in 1991.

In terms of force projection, the one US Carrier Strike Group in Japan has 3X the aircraft that China could eventually add to the one aircraft carrier they bought from the Russians. Japan has powerful armed forces which could easily strike China from Land.

The US certainly has more Naval weaponry than anyone else in the area, there are frequently two carrier groups in the Western Pacific and another in the Indian Ocean.

Given the current administration policies, we also have a lack of willingness to dominate the area militarily.