Crouching
Tiger, Tumbling
US Economy
By Heather Wokusch
16 March, 2007
Countercurrents.org
"Opportunities multiply
as they are seized."
Sun Tzu, Chinese author and military strategist, c.
544-496 BC
Bush
and Cheney may be declaring "Mission Accomplished" now that
the Iraqi Cabinet has approved the draft of an oil law granting foreign
companies unprecedented access to the country's fields.
But Beijing is having the
last laugh.
Just last week, Chinese oil
company officials arrived in Baghdad to revive Hussein-era contracts
for developing Iraq's oil, specifically, the Ahdab oil field in south-central
Iraq. Hundreds of millions of dollars and a reduction in Iraq's Chinese
debt are already on the table.
It wasn't supposed to work
this way. The US had a major role in developing Iraq's proposed oil
law, with its scandalous long-term agreements enabling foreign oil companies
to plunder the nation's most precious resource. Yet despite the US "investment"
of more than 35,000 dead or wounded troops and over 400 billion dollars
to secure access to Iraq's oil for itself, China is poised to sign the
first major contract.
China also recently announced
plans to strategically refocus its one trillion dollar foreign-currency
war chest. Rather than continuing to rely on US Treasury bonds, which
yield relatively small returns and risk dollar depreciation, Beijing
is expected to increasingly snap up natural resources and energy assets
across the world.
It's no wonder that China
is ditching the US, which currently faces a national debt of almost
nine trillion dollars, growing at the rate of $2.04 billion dollars
per day. The subprime housing bubble threatens rising defaults and decreased
stateside consumption, while the personal savings rate for Americans
fell to a shocking negative 1% in 2006, the worst level since the Great
Depression.
It isn't in China's interest
for the US to crash and burn economically, but neither is propping up
dollar indefinitely, especially if it ceases to be the oil transaction
currency standard. The danger, however, is that if China divests of
dollars in earnest, other countries will follow suit. The Bush administration's
disastrous fiscal policies, not to mention lack of transparency regarding
money-supply data, have already caused Central Banks internationally
to begin quietly diversifying away from the greenback.
China's inevitable rise was
predicted in a 2005 National Intelligence Council report, warning: "In
the same way that commentators refer to the 1900s as the 'American Century,'
the 21st century may be seen as a time when Asia, led by China and India,
comes into its own. A combination of sustained high economic growth,
expanding military capabilities, and large populations will be at the
root of the expected rapid rise in economic and military power for both
countries."
Which brings up a potential
US attack on Iran. In late 2004, the governments of Beijing and Tehran
signed agreements valued at up to $100 billion for China to develop
and purchase Iranian oil and gas. In the aftermath of a US military
strike on the country, the status of those contracts might be called
into question.
But as the famed military
strategist Sun Tzu once noted, "There is no instance of a country
having benefited from prolonged warfare." Instead, he advised waiting
quietly as an enemy self-destructs, then sweeping in to reap the profits,
an effective plan for Beijing during the Bush years.