Jupiter Merlin Weekly: China in the limelight and the US in twilight
The Jupiter Merlin team look at the shifting landscape of geopolitics, as China’s role as an international mediator illustrates new global power dynamics.
Newton’s Third Law of Motion states that for every action there is an equal and opposite reaction. The same could be said to apply to diplomacy: throw verbal rocks at someone and one way or another they’ll throw them (or something more subtle) back.
If China mediated, the US was most definitely disintermediated. The flustered US reaction revealed in an instant that a) Washington had no idea what was happening or what the ramifications were and b) it was stunned that it was China which had conjured the trick.
Consider how the dots join up: China and Iran are allies, their mutual bond cemented in oil and China’s need of suppliers and Iran’s want of customers; for years China and Saudi have been colluding with Russia about finding alternative settlement systems to undermine the petrodollar hegemon (that which confers much of the gravitational pull of the US dollar and the Federal Reserve); Iran is a key consideration to the progress of China’s New Silk Road and without Tehran’s cooperation the project is less a holistic, integrated infrastructure system spanning Asia and Europe than a cul-de-sac, a dead-end with a “HALT!” barrier extending from the Gulf to the Caspian (while Saudi with its access to the Red Sea and thence the Gulf of Aden is an important alternative to the Karakoram Highway through Pakistan down to the Indian Ocean); Riyadh currently has little time for the US and has a deep antipathy towards the Democrats and Joe Biden in particular, and Tehran remains actively hostile to Washington. Even if Saudi and Iran are not buddies (the ideological internecine gulf between the Islamic Sunni and Shia sects may be too wide for that), that they are willing to entertain no longer actively abusing each other is an important step to restoring stability in the Middle East and Arabia (especially neighbouring Yemen). It remains to be seen how Israel sees this development in the context of Iran, given the recent rightward shift of government under Benjamin Netanyahu.
Second, and directly linked, was OPEC’s and Russia’s joint decision last weekend to reduce oil production by 1.2m Barrels/day (roughly 1-1.5% of global production) to try and put a floor under a slipping price in the face of a slowing global economy. The price of Brent Crude promptly jumped 8% back to the mid-$80s/barrel. Saudi is OPEC’s biggest producing member: last summer when oil prices were at all-time highs approaching $150/barrel and Biden was desperate to relieve the pressure on US drivers at the pumps, Saudi firmly rebuffed all US pleading to open the taps and flood the market. However justified the sentiment, Biden’s 2019 campaign insults against Saudi came back to bite him, as has happened twice since, including a few days ago. It is now clear that Saudi is looking after its own interests first which, as one commentator observed, includes an eastward shift in strategic, political and economic emphasis towards potentially faster growth economies still hungry for hydrocarbon fuels, and specifically nurturing ties with China.
But it is notable how significantly geopolitical influences have changed over 50 years, accentuated by the events of the past month: reaching its peak with that consummate shuttle diplomat Henry Kissinger in the 1970s, the US was the powerbroker in the Middle East. There were broader considerations, not least the political influence of the powerful East Coast Jewish lobby in America and concerns for the permanent security of Israel but excusing the pun, crudely it was all about oil and ensuring supplies to the US, then a significant and perpetually thirsty net importer. The US diplomatic influence and that of its allies waned rapidly in the aftermath of the Second Gulf War and the considerable damage inflicted in both Iran and Afghanistan by the outright refusal of successive US neo-Con Secretaries of State to ‘do’ nation building. The disastrous policy mistakes of meddling in the Arab Spring merely added to the problems and allowed Russia and Iran to fill a strategic void. And today we have China actively involved as the rising influence in the region, nurturing relationships, exerting soft power and influence in its strategic self-interest.
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