Thursday, May 24, 2007

China's Bid 

China is in the Satellite business.

The NYT reports that China is launching a communications satellite for Nigeria (pictured right).

The lead says it all:
For years, China has chafed at efforts by the United States to exclude it from full membership in the world’s elite space club. So lately China seems to have hit on a solution: create a new club.

Beijing is trying to position itself as a space benefactor to the developing world — the same countries, in some cases, whose natural resources China covets here on earth. The latest and most prominent example came last week when China launched a communications satellite for Nigeria, a major oil producer, in a project that serves as a tidy case study of how space has become another arena where China is trying to exert its soft power.
This past semester, in my Hegemony and US Foreign Policy class, we talked about China often--usually in terms of a 'hegemonic challenger.' One of the point that we often noted, however, was that a hegemonic challenger must do two things: 1) overthrow the old hegemonic order, in this case, knock the US off its block as teh global #1, and 2) replace it with a new hegemonic order. In most of our discussions, we concluded China not really keen on either--instead treating the US as a rival (as opposed to an enemy) and looking to improve its own position within the system, as China now benefits tremendously from certain aspects of the current US order--especially in areas such as trade.

The key line in the lead is "form its own club." Space has long been seen as a global commons, one where the US can provide certain public goods (such as satellite communication and navigation) and exercise its Command of the Commons as a foundational aspect of US Hegemony. Here you have not just China challenging that US order, but starting its own club for other states with similar interests.

You also see the invocation of "Soft Power." I must admit, we read a lot of Nye in the class (probably second only to Ikenberry on the syllabus) and his work was popular with the students. The notion of Soft Power as a tool for hegemonic management is the heart of Nye's work--get them to like you and want what you want so you don't have to force them to do what you need them to do--and here you have the NYT reading China in that light.

The second interesting thing is the impetus toward the move into space. What I found notable was that the NYT managed, in the span of 3 brief paragraphs, provide ample evidence for Constructivist, Liberal, and Realist explanations of this launch:
For China, the strategy is a blend of self-interest, broader diplomacy and, from a business standpoint, an effective way to break into the satellite market. Satellites have become status symbols and technological necessities for many countries that want an ownership stake in the digital world dominated by the West, analysts say....

China’s more grandiose space goals, which include building a Mars probe and, eventually, putting an astronaut on the moon, are based on an American blueprint in which space exploration enhances national prestige and advances technological development. But Beijing also is focused on competing in the $100 billion commercial satellite industry....

Satellites also are becoming vital to Beijing’s domestic development plans. In the next several years, China could launch as many as 100 satellites to help deliver television to rural areas, create a digital navigational network, facilitate scientific research and improve mapping and weather monitoring. Research centers on microsatellites have opened in Beijing, Shanghai and Harbin, and a new launching center is under construction in Hainan Province....

But China’s focus on satellites has also brought suspicions, particularly from the United States, since most satellites are “dual use” technologies, capable of civilian and military applications. Currently, China is overhauling its military in a modernization drive focused, in part, on developing the capacity to fight a “high tech” war.
Constructivism: Prestige, status, and identity: having a Satellite shows you're one of the cool kids.
Liberalism: Maximize gains: satellites as income generating, development promoting devices with a key focus on domestic political factors.
Realism: Enhances military power relative to the USA.

All that from one fun picture.

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Monday, May 14, 2007

Chavez's Challenge 

Hugo Chavez is talking a tough game, challenging the USA, and the Bush Administration in particular, all over the globe. He's rallying leaders in Latin America, meeting with 'rogues' world-wide, and even calling Bush the "devil" at the UN. He's become public Frenemy #1. A challenge to the USA, but (and you have to say it like Home Simpson longing after a donut) oooooooooh, Oil. That precious, thick heavy molasses-like Venezuelan Crude.

In a fascinating story, The Washington Post reported that:
[A] new study of trade and oil consumption data shows that Venezuela appears ever more dependent on selling its oil to the country Chávez calls "the cruelest, most terrible, most cynical, most murderous empire that has existed." And U.S. government energy trade data show the United States is slightly less dependent on Venezuela, which at one time challenged Canada, Mexico and Saudi Arabia as the No. 1 provider of foreign oil but now tussles with up-and-coming Nigeria for the fourth spot.
Chavez is able to run such a strong Anti-US campaign because he is flush with cash from the high price of Venezuela's exported Oil. But, more and more, the source of that cash is the very enemy he's railing against. Despite his anti-US policies, he's become more dependent on the voracious US appetite for Oil.
Yet the country's once-vaunted oil industry has seen its production and capacity to produce decline over the last decade, according to oil analysts and statistics from the U.S. Energy Department and the International Energy Agency in Paris.

The world's fourth-largest oil exporter a decade ago, Venezuela is now seventh, according to the BP Statistical Review of World Energy. The 1.1 million barrels of crude that Venezuela exports to the United States every day amount to less than 11 percent of American imports, down from 17.3 percent in 1996. By contrast, the No. 1 supplier to the American market, Canada, is now sending more than 1.8 million barrels a day and topped 2 million barrels daily in November.

During most of Chávez's eight years in office, more than 60 percent of the country's total crude exports have gone to the United States, up from 50 percent throughout much of the 1990s, according to Ramón Espinasa, a former chief economist at PDVSA who is now a consultant in Washington. The trend is due to growing U.S. demand, Venezuela's rising consumption and what oil analysts say is the state's inability to diversify its base of clients to include big consumers.
As Chavez spends money helping his global political pals, he's investing less in his national Oil company. The nasty secret about Venezuela's Oil is that, though bountiful, is really thick, like sludge. Unlike Saudi light sweet crude which is easy to refine anywhere in the world, Venezuelan heavy crude is so heavy that only select refineries dedicated to processing such a heavy grade of Oil, can handle it.
So a country less capable of producing oil, analysts say, is more tied to the United States, where refineries wholly or partly owned by PDVSA refine Venezuela's molasses-like oil. The installations exist nowhere else, which makes some analysts skeptical that Venezuela is exporting as much to China as it claims.

"It's three months by tanker to China, five days to the East Coast of the United States, so the American client is too important for Venezuela."
So, at any point, the US could end Chavez's antics with a simple Oil embargo. He's got no where else to send his product. Would it hurt? Maybe a little (though with gas already over $3.00/gallon, I guess we can tolerate more than most people ever thought we could...), but it would hurt him a heck of a lot worse than it would hurt us.

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Saturday, May 05, 2007

The World Bank 

This is so brilliant, and I can't believe I hadn't seen it until Dan posted it.
But you absolutely must watch, especially if you've been with us talking about Bretton Woods all semester (or you've ever heard me talk about Bretton Woods).

Click here to see it.

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