STAFF NEWS & ANALYSIS
U.S. Does Heavy-Lifting for China?
By Staff News & Analysis - January 01, 2010

Behind an electrified fence, blast-resistant sandbags and 53 National Police outposts, the Afghan surge is well under way. But the foot soldiers in a bowl-shaped valley about 20 miles southeast of Kabul are not fighting the Taliban, or even carrying guns. They are preparing to extract copper from one of the richest untapped deposits on earth. And they are Chinese, undertaking by far the largest foreign investment project in war-torn Afghanistan. Two years ago, the China Metallurgical Group Corporation, a Chinese state-owned conglomerate, bid $3.4 billion – $1 billion more than any of its competitors. While the United States spends hundreds of billions of dollars fighting the Taliban and Al Qaeda here, China is securing raw material for its voracious economy. The world's superpower is focused on security. Its fastest rising competitor concentrates on commerce. S. Frederick Starr, the chairman of the Central Asia-Caucasus Institute, an independent research organization in Washington, said that skeptics might wonder whether Washington and NATO had conducted "an unacknowledged preparatory phase for the Chinese economic penetration of Afghanistan." "We do the heavy lifting," he said. "And they pick the fruit." – NY Times

Dominant Social Theme: Buddies through thick and thin.

Free-Market Analysis: We have noticed this ongoing convergence between the Chinese and Americans that is starting to yield some surprising fruit. Certainly there was a lot of focus on the relationship (or lack of one in Copenhagen). But this is a clear example to us. The Americans are pulling out all the stops when it comes to Afghanistan and it seems obvious enough to us that the Chinese have been enlisted to help. We don't know why else the Chinese would invest in Afghanistan now (maybe they're getting a good price). What the deal does do is signal powerfully to the Afghanistan peoples that if the Americans win the war tons of investments may roll their way.

The Chinese are of course in it for themselves. But it certainly sends a message to the Afghans. The two most powerful powers on earth, America and China, are united in claiming the Afghanistan of the future. The Americans are doing the heavy-lifting and the Chinese are happy to do the developing. But both are in it together – allies and increasingly intertwined. We think in fact this is so because the economies are increasingly similar – hyper-stimulated and top-down, militaristic and in the American case, increasingly authoritarian. It's almost as if the West has exported central banking to China while importing authoritarianism. Nice trade?

Of course it may sound funny to claim that Chinese and American political systems are dovetailing, but as we pointed out in today's other article, the larger economies the world over seem headed toward this two-track economic operation in which major monetary decisions are made by a tiny circle of insiders while the free-market itself operates at a street level and allows citizens an illusion of autonomy.

Also, China has just overtaken Japan as Asia's leading economy. There is no doubt from our point of view that the power elite continues to push forward as fast as it can with its plans to build a tripartite world divided up between various power blocks including the Americas, Europe and Asia. The idea is to cement these emerging regionalities with regional currencies as well, and this is occurring at a fast clip as well.

Afghanistan is critical to the plans of the power elite because it is impossible to build a new kind of world without an extraordinarily authoritarian ruling class. The ground work has been laid in America since 9/11 with unlimited, warrantless wiretapping and Internet analysis by Homeland Security, FBI, etc. China's authoritarianism comes naturally and the EU has no trouble with it either. But for the kinds of Draconian fiscal and monetary policies that are necessary to implement a bottom-up laissez faire marketplace economy (of street-vendors, sales-stalls and discount shops), and a top down command-and-control economy (that puts the levers of power squarely in the hands of the power elite), there needs to be a fairly seamless control around the world. There needs to be nowhere to go.

After Thoughts

The war in Afghanistan is against its millions of Pashtuns. The coming war in Iran would be against Persians. The war in Iraq was aimed at pacifying some of the Middle East's most troublesome element. But from our point of view, little of it had to do with energy or "strategic positioning" and much of it had to do with extending out Western dominance and penetrating Muslim ideology with Western ways. Afghanistan is the navel of the world.

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