What mattered were prestige, kickbacks and $1.2tr in hard currency-based reserves. It did not matter that China's domestic consumption vis a vis its GDP was actually decreasing; it was more a matter of consumer opiates, of who was boss in the center of the universe.
It did not matter that Chinese cities were shrouded in toxic gray, where "only 1 percent of the country's 560 million city dwellers breathe air considered safe by the European Union." [1]
The Chinese may cough but the 'days when the world caught a cold whenever Uncle Sam sneezed was over." Or so it seemed.
Uncle Sam sneezed.
Global finance began hemorrhaging, and it had to be resuscitated through an intravenous flow of taxpayer money.
Western consumers finally realized that girths had to be tightened, and what to better way than to curb spending, and let a market correction take place in the import sector.
An entire supply chain leading to China's factories are in danger of folding up. Mineral resources from Africa, semiconductor plants in Malaysia, raw textile products elsewhere, now face acute market uncertainty.
China is in a bad fix. However, this is not deterring factories from coming online next year to meet the projected "global demand." If Western consumers are scaling down their purchases, Africans are not in a position to be the replacement buyers, and without a market, they will not be able to sell their raw products either.
In such circumstances, moods can shift. When "Beijing rolled out the red carpet for more than 40 African heads of state last November, billboards depicting Africans clad in leopard skin underwear, and an indigenous man from Papua New Guinea, plastered the city." [2] It is no wonder that China's list of "allies" is getting shorter by the day.
Events in Myanmar are not proving helpful. China enjoys a near monopoly over Myanmar's estimated 2.46 trillion cubic meters of gas and 3.2 billion barrels of crude oil. Beijing had plans to develop two parallel oil and gas pipelines stretching 2,380-km to link the deepwater port of Sittwe to Kunming, in the Chinese province of Yunnan. Upon completion, a good portion of Middle Eastern oil and gas is expected to bypass the Straits of Malacca.
The quid pro quo was arms supply and support at the UN for Myanmar's military junta. Any new government now might negate all existing deals, and pull Yangon into the US orbit. This is a timely revolution from Washington's perspective.
North Korea too is seeking rapprochement. There is enough operational space now to tackle Tehran, Damascus and the Hezbollah.
China can of course play the spoiler by providing arms to these regimes via a proxy. It is still a bad idea as the Israelis are just itching for war.
The IAF recently destroyed a Syrian installation that was purportedly an embryonic nuclear facility, but may well turn out to be a Kolchuga-type passive radar system, ideal for downing B2 stealth bombers. Coincidentally, the Russians have pledged to upgrade Syrian radar defenses after the attack.
If a wider conflagration breaks out in the Middle East, there will be no oil flowing from the Straits of Hormuz to China, either through Sitte, or through the Straits of Malacca.
The best option for Beijing will be to lock its oil and gas grid to the Russian Far East at a breakneck speed, and clean up some level of air pollution in time for the 2008 Olympics.
