De-dollarization gathers pace

[David Guyatt]

From VoltaireNet

Russian counter-offensive on the Eastern front

by Manlio Dinucci

The tactic of the United States to economically isolate Russia to prevent it from coming to the aid of the Ukrainian population has had the opposite effect to what was intended: it is pushing Moscow in the arms of Beijing, so that, in the long run, the Eastern European-Asian block which is gaining steam will surpass the power of Western countries.

VOLTAIRE NETWORK | 20 MAY 2014 FRANÇAIS ITALIANO

In Shanghai, everything is ready to host the fourth CICA summit.While NATO is bringing together, on 21-22 May in Brussels, the 28 defense ministers to upgrade its forces with an anti-Russian objective, by also stepping up the training of Kiev military and paramilitary (including gangs who attempted to assassinate the secretary of the Ukrainian Communist Party), and that the European Union is targeting Russia with new sanctions Russia, the response does not come from Moscow, but from distant Beijing.President Putin began today his state visit to China, which will see the signing of thirty bilateral agreements, with the direct effect of eviscerating Washington's plan of "isolating President Vladimir V. Putin's Russia by cutting off its economic and political ties to the outside world."The scope of the agreements is strategic. A contract worth $ 270 billion between Russia's state company Rosneft and China's National Petroleum Company stipulates that Russia will provide China in the next 25 years with more than 700 million tons of oil. Another contract provides that, by 2018, Russian state company Gazprom will supply China at least 38 billion cubic meters gas per year, that is to say, about one-quarter the amount that it now exports to Europe. Linking up with Chinese projected investments of $ 20 billion, Moscow plans to potentiate the pipeline between eastern Siberia and the Pacific, by coupling it with a pipeline of 4000 km to supply China.For its part, Beijing is interested in making investments also in the Crimea, in particular in the production and export of liquefied natural gas, the modernization of agriculture and the construction of a grain terminal. At the same time Moscow and Beijing are thinking of abandoning the dollar as the currency for trade in the Asian region. And Russia is set to launch its own payment system, on the model of the China Union Pay, including credit cards which can be used in more than 140 countries, ranking second in the world after Visa.Russian-Chinese cooperation is not limited to the economic sphere. Presidents Vladimir Putin and Xi Jinping, according to diplomatic sources, are to make a "substantial statement" on the international situation. The convergence of strategic interests will be demonstrated by the joint military exercises that the two countries are poised to conduct in the South China Sea, on the heels of the naval maneuvers held by the U.S. in the Philippines. And a military agreement has practically been clinched, according to which Moscow will provide Beijing withSukhoi Su-35 multi-role fighters; with Lada class submarines and with the most advanced missile defense systems, the S-400.The Conference on Interaction and Confidence Building Measures in Asia (Cica) was founded at the initiative of Kazakhstan in 2006 and its permanent secretariat is based in Almaty. The rotating presidency will be handed by Turkey to China at the opening of the next summit in Shanghai on 21 and 22 May 2014.To underscore the commonality of interests between Moscow and Beijing, Putin will attend the Conference on the measures of interaction and confidence building in Asia ( Cica ), chaired by Xi Jinping, being held in Shanghai on 21 and 22 May, with the participation of Iraqi Prime Minister Nuri al-Maliki, Afghan President Hamid Karzai and his Iranian counterpart Hassan Rouhani. A slap in the face for the United States, who - after having spent 6 000 billion dollars in the wars in Iraq and Afghanistan - now sees China increasing it's economic presence in these two countries. In Iraq, it buys about half of the crude oil production and makes large investments in the oil industry; in Afghanistan, it invests primarily in the mining sector, after Pentagon geologists discovered rich deposits of lithium, cobalt, gold and other metals. By opening up opportunities for Iran to the east, Russia and China are hamstringing the embargo enacted by the U.S. and the EU.Things are no better for Washington on the Western front. The possibility that the Obama administration has toyed with of reducing by more than 25%, within this decade, Russian gas supplies to Europe and replacing them with liquefied natural gas provided by the United States, is revealing itself as a bluff. Confirmation of this is the fact that, despite the sanctions announced by Berlin, German companies continue to invest in Russia's energy industry: RMA Pipeline Equipment, manufacturer of oil and gas pipeline valves, is now opening its largest plant in the Volga region. And Gazprom has already signed all the contracts, including one for € 2 billion with the Italian firm Saipem (Eni) for the realization of the South Stream pipeline, which by bypassing Ukraine will bring Russian gas across the Black Sea up to Bulgaria and from there into the EU. Even if the United States were able to block the South Stream, Russia could divert the gas to China.The " East Stream " is now open.