Iran/China and the New Silk Road

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After 9/11 and the invasion of Iraq, the Chinese leadership was more than ready to counteract the US advancement in Eurasia – and turn it on its head. In the second part of this report, Pepe Escobar analyzes what’s at stake at the Shanghai Cooperation Organization and what really matters for emerging global power China and regional power Iran: the Asian Energy Security Grid and the re-emergence of the fabled Silk Road, now as a vehicle for energy security as well as trade.

Story Transcript

PEPE ESCOBAR, SENIOR ANALYST, TRNN: What happened to the Bush-declared post-9/11 global war on terror, now remixed by Obama as "overseas contingency operations"? Well, one of the war on terror’s keys shadowy aims was for Washington to firmly plant the flag in Central Asia. For those sorry neocons, remember, China was the ultimate geopolitical end. So nothing more enticing than to try to sway a batch of Asian countries against China—easier to dream that up in a neocon office in Washington than to actually make it happen. China’s counterpower was to turn the whole game around in Central Asia, with Iran as its key peon. For China, Iran’s a matter of national security in terms of assuring its enormous energy needs. Of course, China also needs Russia for energy and for technology, but this is arguably more of an alliance of circumstance for all the ambitious targets embodied by the SCO. That’s more of an alliance of circumstance than a long-term strategic partnership, in fact. And as Iran remains under pressure at different levels, from both the US and Russia, what better savior than China? Enter Pipeline-istan once again. At first sight, Iranian energy and Chinese technology is a match made in heaven, but it’s much more complicated than that. Still victim of US sanctions, Iran has turned to China to modernize itself. Once again, the Bush-Cheney years and the invasion of Iraq sent a clear message to the collective leadership in Beijing. A push to control Iraqi oil, plus troops in Afghanistan—a stone’s throw from the Caspian—added to the Pentagon’s self-defined arc of instability from the Middle East to Central Asia. This was more than enough to imprint the message to the Chinese. The less dependent China is from the US-subjugated Arab Middle East the better. Fifty percent of China’s oil imports used to come from the Arab Middle East, but soon China became the second largest oil importer from Iran after Japan. And since 2003, China has mastered the full cycle of prospection, exploitation, refining. So we have Chinese companies investing heavily in Iran’s oil sector, whose refining capacity, for instance, is very small. Without urgent investment, some projections point to Iran possibly cutting off oil export by 2020. So Iran needs China to develop its gas production in gigantic North Pars and South Pars fields, which it shares with Qatar in the Persian Gulf. And Iran, on top of it all, still needs everything that China can provide—transportation systems, telecom, electricity, naval construction. So no wonder a stable Iran had to become a matter of Chinese national security. So why the stalemate at the SCO? Well, China is always very careful. They’re always meticulously seeking to improve China’s global credibility. It had to be considering—they’re always considering the pros and cons of admitting Iran, for which the SCO and its slogan of mutual cooperation for the stability of Central Asia, as well as economic and security benefits, these are all priceless. But for the Chinese it’s very complicated. The SCO fights against Islamic terrorism and separatism in general, but now has also developed as an economic body with a development fund and a multilateral economic council. The whole idea is still to curb American influence in Central Asia. Iran is an observer since 2005. Two thousand and ten is going to be absolutely crucial: Iran has to beat the clock of a desperate Israeli strike, Iran has to be accepted by the SCO, and Iran has to negotiate some sort of stability pact with the Obama administration. For all this to happen relatively smoothly, Iran needs China; that is, Iran needs to sell as much oil and gas as China needs, below market prices, while accepting Chinese and Russian investment in exploration and production of Caspian oil. Iran also needs its doors open to the north—the Caucasus and Turkey—to channel its energy production towards the holy grail: Europe. Now, that’s another uphill struggle, to say the least. Iran has to fight fierce regional competition in the Caucasus. Iran has to fight the US-Turkey alliance framed by NATO. It has to fight the perpetual US-Russian Cold War in the whole region. And last but not least, Russia’s own energy policy, which simply does not contemplate sharing the vital multibillionaire European energy market with Iran. But energy agreements with Turkey are now part of the picture, after the moderate Islamists of the AKP took power in 2002. Now, it’s not that far-fetched now to imagine the possibility of Iran, in the near future, supplying much-needed gas for the ultraexpensive US-supported Turkey-to-Austria Nabucco pipeline. This is the biggest open secret in Brussels in ages. Everybody’s talking about it in Europe. The key fact remains, for both Tehran and Beijing, the American thrust in the arc of instability, from the Middle East to Central Asia, is anathema. They’re both anti-US hegemony and -US unilateralism, Bush-Cheney style. As emerging powers, they’re both pro-multipolar world. And as they are not Western-style liberal democracies, the empathy is even stronger. Few have failed to notice the stark similarities in the degree of repression of the Green Revolution in Tehran and the Uyghurs in Xinxiang. To sum it all up, for China, its strategic alliance with Iran is above all about Pipeline-istan, the Asian energy security grid, and the new Silk Road. That’s about energy and trade. For China, a peaceful solution to the Iran nuclear dossier is absolutely imperative. This will lead to Iran being fully open to extremely eager European investment. The Obama administration, they may be very reluctant to admit it, but in the new Great Game in Eurasia, the Tehran-Beijing axis spells out the future: multipolarity.

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Please note that TRNN transcripts are typed from a recording of the program; The Real News Network cannot guarantee their complete accuracy.