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International Relations Security Foreign policy

China’s New City: Is this Beijing’s Pivot?

Paracel islands
Paracel islands. Photo: Nicolas Lannuzel/flickr.

It’s not relocating aircraft carriers to the Pacific or stationing 2,500 marines in Australia but China’s provocative establishment of a new city, Sansha, in the disputed Paracels chain takes the geopolitical drama in the South China Sea to a new stage. This escalating assertiveness may have a larger strategic importance as part of Beijing’s response to the often touted US “pivot” or rebalancing in Asia.

Proclaiming a new city on the 2km long atoll in the South China Sea (population some 150 fishermen), replete with its own mayor, municipal council, and military garrison takes the issue a step beyond diplomatic quarrels with other claimants, in this case the Philippines and Vietnam. China appears to also view its newly anointed Sansha as a sort of administrative and monitoring hub for the wider South China Sea area.

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International Relations

OPEC and Saudi Shrewd Middle Power Diplomacy

For middle powers like Saudi Arabia an effective foreign policy requires both cunning and a knack for identifying force multipliers. Of course, being the world’s largest oil producer is a bit of a force multiplier by itself, as the move on Thursday by the Organization of Petroleum Exporting Countries (OPEC) not to reduce production despite a price decline from $128 to $97 per barrel suggests.

OPEC price hawks like Iran sought to reduce the current 30 million barrel a day production quota (actual production is nearly 32mil brls a day as OPEC members routinely exceed their quotas). But Riyadh was not only opposed, but sought a production increase, though in the end the compromise was the status quo. That may sound a bit counter-intuitive – it was the first time in a decade that OPEC did not reduce production quotas after a more than 20 percent price decline. In fact, the Saudis were actually contemplating a production increase, even though that might drop prices close to the roughly $80/brl they need to balance their budget.

Why?