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Not sure if it's a win. The vast resources in Russia will now be channeled into China (and India). If you're an American strategist, a China with Russia's resou

by dmpk2k 3y ago

Not sure if it's a win. The vast resources in Russia will now be channeled into China (and India). If you're an American strategist, a China with Russia's resources should be giving you serious jitters. And European manufacturing should be terrified.

deleted 3y ago
[deleted]
thc-27182 3y ago
China is getting those resources regardless. It's just a negotiation on price, which Russia is having to sell lower than normal. Which hurts Russia more than it benefits China. Not every trade has to be zerosum.
- dmpk2k 3y ago
  I was talking about American strategy. Russia was and is a largely-neutralized regional great power, no longer any real threat to Western hegemonic power. China is a different matter. China manufactures more than America, EU and Japan combined, and (IIRC) produces more STEM graduates than all of them too. Add Russia's resources on top, and even with the major demographic problems China faces, America has a challenger on its hands that's much bigger than the Soviet Union could ever aspire to be. Strongly shoving Russia into China's orbit was just plain stupid. It looks like they were gambling on regime change; a bad gamble if ever I saw one. Edit: all of this is ignoring India too. At some point India will catch up, and then the collective West potentially could end up third.
ericmay 3y ago
Eh not really. It’s a supreme oversimplification of global economics. If China starts buying more oil and gas from Russia then it stops buying as much from the Middle East. America is I believe now the largest producer of at least some oil and gas products. The market is global. Also, while Russia is or would be happy to sell resources to China to fund the lifestyles of extremely wealthy dictators and murderers, Russia (the State) will always view China with some amount of healthy suspicion for geopolitical reasons. The fear you’re alluding to came and went with Cold War and the destruction of the Soviet Empire.
- dmpk2k 3y ago
  This is all true, and yet ignores the price of production and transportation. Once the various Power Of Siberia pipelines are all complete, China may be getting gas cheaper than any price Europe can get. As for Russia viewing China with suspicion... that's true of the West too, and yet it has been piping gas and oil to Germany since the 1960s.
  - ericmay 3y ago
    > As for Russia viewing China with suspicion... that's true of the West too, and yet it has been piping gas and oil to Germany since the 1960s. The point wasn’t that Russia doesn’t engage with other countries, it’s that Russia won’t engage too closely with China so there isn’t as much for American strategists to worry about there. Not to mention China is economically dependent on the U.S., EU, Japan, South Korea, Australia, and other western-aligned nations. Vacationing in Nice is way more fun than vacationing in Siberia. The Russian economy is an afterthought and that was before sanctions. > This is all true, and yet ignores the price of production and transportation. Once the various Power Of Siberia pipelines are all complete, China may be getting gas cheaper than any price Europe can get. Sure… but there’s a few things here: 1) alternative energy sources become more and more economically viable so they get built in Europe - oil/nat gas producers don’t want too much of this happening if they can avoid it 2) the market is global, so increase in purchases from Russia means decreases in purchases from other countries - if your demand is 100 barrels and you buy 50 from Saudi Arabia and 50 from Russia and then you buy 60 from Russia instead and buy 40 from Saudi Arabia the excess supply of 10 barrels has to get sold somewhere, and potentially at a lower price (remember when the spot price of oil went negative? [1]) 3) OPEC (at least pre-war) has some “say” in setting the global price for oil 4) there are different types of oil for different uses so a new pipeline is just one piece of the supply puzzle [1] https://www.marketwatch.com/story/oil-prices-went-negative-a-year-ago-heres-what-traders-have-learned-since-11618863839 https://www.marketwatch.com/story/oil-prices-went-negative-a...
    - dmpk2k 3y ago
      The dependence between China and the West works both ways, and yet look what is happening. Regardless of the reasoning why it should not, the direction is clear, and it won't be the first time that economies have been terribly damaged due to security concerns. We'll just have to leave this one to the history books. Much of the rest you write is true, but once again we come to production and transportation costs. If the price of extraction and transportation drops below a profitable level over the long term, production will drop. If Russia can extract and transport gas at a lower energy cost than any other producer can do the same for Europe, Europe will have an increased disadvantage in manufacturing until sufficiently cheap alternatives are built. You're certainly aware of this, so I'm not even clear what we're debating here.

by dmpk2k 3y ago

deleted 3y ago

[deleted]

thc-27182 3y ago

China is getting those resources regardless. It's just a negotiation on price, which Russia is having to sell lower than normal. Which hurts Russia more than it benefits China. Not every trade has to be zerosum.

dmpk2k 3y ago
I was talking about American strategy. Russia was and is a largely-neutralized regional great power, no longer any real threat to Western hegemonic power. China is a different matter. China manufactures more than America, EU and Japan combined, and (IIRC) produces more STEM graduates than all of them too. Add Russia's resources on top, and even with the major demographic problems China faces, America has a challenger on its hands that's much bigger than the Soviet Union could ever aspire to be. Strongly shoving Russia into China's orbit was just plain stupid. It looks like they were gambling on regime change; a bad gamble if ever I saw one. Edit: all of this is ignoring India too. At some point India will catch up, and then the collective West potentially could end up third.

ericmay 3y ago

Eh not really. It’s a supreme oversimplification of global economics. If China starts buying more oil and gas from Russia then it stops buying as much from the Middle East. America is I believe now the largest producer of at least some oil and gas products. The market is global. Also, while Russia is or would be happy to sell resources to China to fund the lifestyles of extremely wealthy dictators and murderers, Russia (the State) will always view China with some amount of healthy suspicion for geopolitical reasons. The fear you’re alluding to came and went with Cold War and the destruction of the Soviet Empire.

dmpk2k 3y ago
This is all true, and yet ignores the price of production and transportation. Once the various Power Of Siberia pipelines are all complete, China may be getting gas cheaper than any price Europe can get. As for Russia viewing China with suspicion... that's true of the West too, and yet it has been piping gas and oil to Germany since the 1960s.
- ericmay 3y ago
  > As for Russia viewing China with suspicion... that's true of the West too, and yet it has been piping gas and oil to Germany since the 1960s. The point wasn’t that Russia doesn’t engage with other countries, it’s that Russia won’t engage too closely with China so there isn’t as much for American strategists to worry about there. Not to mention China is economically dependent on the U.S., EU, Japan, South Korea, Australia, and other western-aligned nations. Vacationing in Nice is way more fun than vacationing in Siberia. The Russian economy is an afterthought and that was before sanctions. > This is all true, and yet ignores the price of production and transportation. Once the various Power Of Siberia pipelines are all complete, China may be getting gas cheaper than any price Europe can get. Sure… but there’s a few things here: 1) alternative energy sources become more and more economically viable so they get built in Europe - oil/nat gas producers don’t want too much of this happening if they can avoid it 2) the market is global, so increase in purchases from Russia means decreases in purchases from other countries - if your demand is 100 barrels and you buy 50 from Saudi Arabia and 50 from Russia and then you buy 60 from Russia instead and buy 40 from Saudi Arabia the excess supply of 10 barrels has to get sold somewhere, and potentially at a lower price (remember when the spot price of oil went negative? [1]) 3) OPEC (at least pre-war) has some “say” in setting the global price for oil 4) there are different types of oil for different uses so a new pipeline is just one piece of the supply puzzle [1] https://www.marketwatch.com/story/oil-prices-went-negative-a-year-ago-heres-what-traders-have-learned-since-11618863839 https://www.marketwatch.com/story/oil-prices-went-negative-a...
  - dmpk2k 3y ago
    The dependence between China and the West works both ways, and yet look what is happening. Regardless of the reasoning why it should not, the direction is clear, and it won't be the first time that economies have been terribly damaged due to security concerns. We'll just have to leave this one to the history books. Much of the rest you write is true, but once again we come to production and transportation costs. If the price of extraction and transportation drops below a profitable level over the long term, production will drop. If Russia can extract and transport gas at a lower energy cost than any other producer can do the same for Europe, Europe will have an increased disadvantage in manufacturing until sufficiently cheap alternatives are built. You're certainly aware of this, so I'm not even clear what we're debating here.