Rice Seeks China's Help on N. Korea Talks

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BEIJING - Secretary of State Condoleezza Rice (news - web sites) on Sunday sought further help from China in getting North Korea (news - web sites) back to nuclear disarmament talks and aired U.S. concerns about Beijing's bellicose rhetoric on Taiwan.

As part of a two-day visit to the Chinese capital, Rice took time to attend a Palm Sunday church service at one of the city's few state-sanctioned churches. Although Rice has said the United States is not satisfied with the extent of religious freedom in communist China, she did not make that point explicit on Sunday.

China was the final stop on a weeklong tour of Asian capitals for Rice, and it was the most delicate for America's new chief diplomat. President Bush (news - web sites)'s second-term pledge to carry democratic ideals around the globe has met with suspicion in China, where government control remains a strong and constant fact of daily life.

The United States is cooperating with China on several fronts, including six-nation talks over North Korea's nuclear program. But Washington has complaints about China's record on human rights, its treatment of dissidents and the rampant piracy of movies, books and other intellectual software.

"There is a lot we can do that is constructive with China, but of course we have our differences," Rice said before flying from South Korea (news - web sites) to China.

Rice also suggested that European governments would be acting irresponsibly if they sold sophisticated weaponry to China that might one day be used against U.S. forces in the Pacific.

"It is the United States, not Europe, that is defending the Pacific," Rice said, adding that South Korea and Japan are contributing resources to keep the Asia-Pacific region stable.

The European Union (news - web sites) soon may lift an arms embargo on China that was imposed after the 1989 crackdown on pro-democracy protesters in Tiananmen Square.

Lifting the embargo would allow sale of technology and weapons that China badly wants to modernize its military. China recently has gone on a military spending spree that Rice said concerns the United States.

China passed a law this month codifying its intention to use military force against Taiwan should the island declare formal independence. Under its complicated policy on China and Taiwan, The United States is obligated to defend Taiwan against an attack from the mainland.

In Washington, the Joint Chiefs of Staff chairman, Gen. Richard Myers, said, "Clearly it's not in anybody's interest to settle this by force."

The United States wants China to use its leverage on North Korea, but Washington's leverage over China is limited. Rice pressed the North Korean nuclear issue in a meeting with Chinese President Hu Jintao, a State Department official said.

The United States, Russia, Japan, South Korea and China began a joint diplomatic effort with North Korea last year aimed at persuading the North to give up its nuclear program.

But those talks, hosted by China, stalled in September. The North Koreans pulled out, has refused to return to the discussions and announced last month that it has built at least one nuclear weapon.

A Bush administration official said Rice had preliminary discussions this past week about a fallback position if the six-way talks fail.

"During the trip there was some understanding among others that this can't go on forever," although there is no deadline for declaring the talks dead, said the official, who spoke on condition of anonymity.

The United States has proposed incentives that include potential help with North Korea's energy crunch if the North abandons up a weapons program.

On her trip, Rice has tried not to provoke the volatile North Korean government. She has offered repeated assurances that the United States has no intention of attacking and that Washington recognizes that North Korea is a sovereign state.

Yet the secretary also toured a mountainside bunker that would be the headquarters should war break out between South Korea and North Korea. The United States has nearly 33,000 troops in South Korea to defend against an attack from the North.

"Make no mistake about it, I don't think North Korea poses a threat to South Korea today," Myers, the Joint Chiefs chairman, told NBC's "Meet the Press."

"They know that if they were to start any conflict on that peninsula, that would be the end of their regime," Myers said. "They would lose. And they know that, and we're very confident about that."

When I was a boy, I loved Australia's new Chadstone Shopping Center. It was the very first modern shopping center in the southern hemisphere. And better than pretty-well everything else was the Downyflake Donut Shop. The donut machine stood in the window. Embryonic donuts danced and grew in the hot oil as they meandered through the stainless-steel maze. That little food processor amused me for hours. It promised a future of limitless possibilities ... a future that I couldn't wait to grow up in, and be a part of.

On the wall near the machine a laconic jester stood with donut in hand and these prophetic words:

As you ramble on through life, brother,
Whatever be your goal,
Keep your eye upon the donut,
And not upon the hole.

Two thousand years ago, another jester had stated the bleeding obvious. He had some wise things to say about greed, love and anger management. He also seemed to be saying something about the danger of exchanging life's necessities for tokens, then becoming bedazzled by the tokens themselves. Well he was rubbed out, of course!

Fast forward to 1974, when respected geologist M K Hubbert predicted that the world's oil supplies would peak around 2000 and thereafter decline. By this time the world was swimming in tokens, so no one paid much attention to him. There was no shortage of tokens to go around, so why the fuss? Hubbert was regarded as a Jester by the people who played tiddly-winks all day long with the tokens.

You see, to find and exploit an oil deposit, we need to expend quite a lot of oil energy. Oil is the supreme example of compact energy, so we have all enjoyed the abundance of "spare" energy left over. As the easy stuff is used up, we arrive at the point where we must finally expend a whole barrel of oil to produce a barrel of oil. Approaching this point, rising oil prices simply express the diminishing proportion of "spare" energy left over for distribution.

Once the net energy return is zero, it's over ... no matter how much oil is tantalizingly "still down there". For the same reasons, less accessible or poor quality oil deposits can be very short-lived. At the finish, the price of oil is immaterial. 1c or $1 million per barrel ... it's over.

Yet in these twilight days of easy oil we have economists who are saying to themselves, "If we use one $40 barrel of oil today to produce half a $160 barrel tomorrow, we will have doubled our money ... gee, that's good business!"

That simple example shows the gulf that can exist between economic dogma and physical reality. It is not only ridiculous, but adds a dangerous twist to the simple notion that rising oil prices will regulate consumption. Add the holy commandments of corporate profit and we have globalized self-delusion. Figure it out; the fingerprints of Texan oilmen are all over the corpse of Iraq.

Easy oil delivers such a wealth of net (excess) energy and goods, that we are free to indulge in all sorts of charades in order to satisfy our personal ambitions. Cheap transport has permitted us to bury local food production under a sea of suburbs. Our agricultural system is totally dependent on oil and natural gas, not only for mechanization but also for fertilizer and the pesticides so necessary for large-scale monoculture.

Want a liter of milk? No problem. Just jump in the old jalopy and potter on down to the local for a carton of nature's finest. How far away is the shop? Does it matter? How did the milk get there? Who cares! That's what we pay the captains of industry for. It's their problem, not ours.

Suppose, just suppose that the (global) depletion of oil and gas is with us here and now. Let's say it's no longer a poisoned apple to be left for the grandkids, but something we must face right now. For example, we know that UK North Sea oil and gas production peaked in 1999. We know that thanks to Margaret Thatcher's free-market policies, the deposit was plundered hastily and sold cheaply. Didn't they know there is not enough energy in a $100 note to boil a pot of tea? The UK will soon have to go cap-in-hand to other countries in the hope of sourcing natural gas.

We know that US natural gas is critically depleted and that they depend on it for electricity, fertilizer and a host of other processes. We know that they are drawing down the Canadian reserves using the free trade agreement. We know that the US administration is meddling in the affairs of Venezuela and other neighbors because the fear is that the gas and oil (and profits) there might be wasted on the indigenous populations.

We know that the Australian prime minister has offered the warm cloak of Timor gas to the shoulders of governor Arnold Schwarzenegger in California. For money, of course. But then, anything is better than having it taken at the point of a gun; ask the Iraqis. In the meantime, US troops will be hanging around the Darwin terminal just to make sure everything runs smoothly.

Geologist Colin Campbell (Texaco, BP, Amoco ... retired) cautioned, "Throughout history, people have had difficulty in distinguishing reality from illusion. Reality is what happens, whereas illusion is what we would like to happen. Wishful thinking is a well-worn expression. Momentum is still another element: we tend to assume that things keep moving in the same direction. The world now faces a discontinuity of historic proportions, as nature shows her hand by imposing a new energy reality. There are vested interests on all sides hoping somehow to evade the iron grip of oil depletion, or at least to put it off until after the next election or until they can develop some strategy for their personal or corporate survival. As the moment of truth approaches, so does the heat, the deceptions, the half-truth and the flat lies."

Prophetic, if not apocalyptic words from Campbell, dovetailing very nicely into the crappy script that our leaders are presently reading from. It is hard to credit the torrent of oil energy that has been flowing silently throughout our entire lives. I am reminded of the great London sewerage system, the operation of which goes largely unnoticed by the industrious yet ignorant ant-nest above.

In the (alas, too few) years to come, we will see great argument over the proper allocation of dwindling oil reserves. It will be realized that other sources of energy cannot deliver sufficient surpluses to replace the potent portable energy we know as gasoline and diesel. It is not generally understood that poorer quality energy sources can be critically dependant on oil for their extraction, processing and distribution. In other words, oil is the precursor for other sources of energy; gas, coal, nuclear, solar, hydro, because these require oil fuel to create and maintain infrastructure. It also gives them the illusion of being "profitable".

Corporate profit, the "free market" and monetary wealth have become our fundamental religion over the past three decades. It is not only "good" but "right" that market forces will somehow deliver the best outcomes in an energy-depleted world. Our governments' energy policies will probably prioritize the development of alternative energy sources in order of profitability. What a mistake that might be. The mind that understands the abstract chicanery of money is a poor tool for chiseling out a daily existence in some sort of cooperative way. This is well understood in the mining industry, which somehow still manages to provide us with necessities despite the efforts of many company accountants.

Would you think me a jester if I said that the one true currency is energy? It always was and always will be. Economics is the game of tiddly-winks that we can afford to play only in the midst of easy, abundant energy. Energy is the donut, economics is the hole.

Have no doubt that the race for the last of the easy energy has begun. First out of the stalls was the US military-industrial complex, which in year 2000 installed the loser in a presidential election. Thus began operation "war on terror", launched under a smokescreen - a fusillade of explosions provided by men of Middle-Eastern appearance. While it is up to the Islamists to provide some semblance of a threat, it is up to us Westerners to imagine the terror. The coalition of the willing leaders have offered their services as cheerleaders of the terrified and I understand that the American incumbent has some prior experience in this regard.
In the rush to be fashionably terrified, it is hoped that we will not notice how the last reserves of "sweet" oil are being encircled and plundered. Of course it can be argued that the US military-industrial complex has the greatest need of the greatest share of oil. Their warfare would be utterly impossible without it ... imagine that! Sometimes in my wildest waking dreams I imagine those Pentagon brass-hats having to pedal a 65-ton Abrams tank to work. Oh yes ...!

Experts say US threats of retaliatory action against any company doing business with China will be enough to put many firms off, particularly in the British industry which is bound to American partners in a number of transatlantic projects

China hopes the end of the European Union's arms embargo will mean it can acquire the modern military equipment it could need in any stand-off with Taiwan, defense analysts in Europe and Asia say.

Despite EU assurances that the embargo will be replaced by tougher rules, they believe the move will embolden European defense firms to chase for the contracts China will wave their way as it embarks on a new phase of defense spending.

"They (the Chinese) have slowed down in terms of buying the platforms, such as destroyers, Russian warships or submarines," said Taipei-based defense analyst Andrew Yang.

Technology transfer: "I think there will be more emphasis on technology transfer... That means they will launch a more capable force to coerce Taiwan in terms of different kinds of strategies," he said, citing a naval blockade or domination of Taiwanese air space as possible tactics.

The EU sees the ban, imposed after the bloody crackdown on Tiananmen Square demonstrators in 1989, as an obstacle to better ties with Beijing and expects to lift it by the end of June.

In its place comes a new "code of conduct" covering all EU arms exports, and a requirement on member states to tell each other what they are selling to China. But there are misgivings in Washington and Tokyo that the new controls are too weak.

China passed a law on Monday granting itself the right to attack Taiwan if it moved to independence, days after unveiling a 12.6 percent rise in its defense budget to nearly $30 billion.

It denied either move meant it had Taiwan in its sights. But the United States, which is bound to defend Taiwan in the event of an attack, swiftly denounced the new law as "unfortunate".

Going digital: Analysts doubt a Chinese move on Taiwan is imminent. But the dispute is seen as one reason why Beijing wants to widen its net of suppliers past vendors such as Russia and Israel.

"The Chinese are generally happy with the hardware they are getting from the Russians," said Adam Ward, senior fellow for East Asian security at the London-based International Institute for Strategic Studies (IISS).

"When they look at Europe, it is for better surveillance, better software and better battlespace awareness," he said of the up-to-date technology Beijing still lacks.

Less overtly offensive than bullets or tanks, such items include telecommunications, sensors and intelligence-processing equipment and are vital to the "digital battlefield" which army planners across the world see changing how wars are fought.

Beijing is also seen as anxious to get hold of some examples of European engine technology and fuel transfer systems -- if only to see how they work and to incorporate into home-made goods.

"The lifting of the embargo could also impact equipment such as helicopters -- which would be good news for the French and Germans," said London-based independent analyst Paul Beaver of a sector in which France and Germany are seen well-positioned.

The 25-nation EU, which on Monday sent a delegation to Washington to explain the lifting to State Department, Pentagon and Congress officials, is adamant that it will not result in a "qualitative or quantitative" increase in arms sales to China.

Testing period: But analysts are sceptical about how the new code of conduct will work, noting that it is not legally binding and relies on member states making their own judgement calls on whether export licences should be granted.

"At the moment, defense firms are reluctant to sell to China because of the political fall-out," said Andrew Kennedy, Asian expert at Britain's Royal United Services Institute (RUSI).

"The code of conduct is not as headline-making as an arms embargo. It implies a softer approach," he said, estimating some $523 million of EU military goods currently get through to China despite the embargo.

US threats of retaliatory action: Kennedy and others say U.S. threats of retaliatory action against any company doing business with China will be enough to put many firms off, particularly in the British industry which is bound to U.S. partners in a number of transatlantic projects.

Britain's BAE Systems, whose U.S. sales outweigh its UK European business, has said it would seek U.S. backing before selling arms to China. French defense firms such as Thales or Franco-German aerospace company EADS are seen as less exposed to any U.S. backlash.

The IISS's Ward said that once the embargo is lifted, firms would explore how strictly national governments would interpret the new code of conduct and whether the political will existed to really keep the lid on exports.

"There will be a critical testing period as companies try and figure out the lie of the land," said Ward. "I am a bit doubtful that the Europeans can live up to their commitments."

[Between China's recent announcement of a 12.6% increase in its military budget and this announcement by Europe, it now seems clear that in addition to all of its other massive economic challenges the US is now locked into a bitterly expensive arms race with the rest of the world. This brought the USSR to its knees in 1989-90. Will the Neocons let it go that far? - MCR]

BRUSSELS : The European Union reassured China that it was pressing ahead with plans to lift a 15-year-old arms embargo on Beijing despite a storm sparked by its anti-secession law targeting Taiwan.

EU foreign policy chief Javier Solana said the controversial law, which authorizes the use of force if Taipei moves towards independence, had caused "complicated atmospherics" around the debate over the EU arms ban.

But the EU plans remain on track, he said after talks with Chinese Foreign Minister Li Zhaoxing in Brussels.

He recalled that EU leaders agreed last December to work notably on beefing up an EU code of conduct, as preparation for lifting the embargo slapped on Beijing after the 1989 Tiananmen Square massacre.

"We are working politically towards that end. We want that end to be a reality. We are working very hard ourselves on compromises that we have to find among ourselves," he told reporters.

The EU's current Luxembourg presidency has set a target of agreement on lifting the ban by the end of its term at the EU helm in June.

Solana conceded that this had had a political impact. But he also said there were some "positive" elements in the Chinese law, and indicated it did not fundamentally change the EU's aim of lifting the embargo.

"The atmospherics ... may have been a little more complicated with some countries or some parliaments. We'll see how things evolve. But the political will continues to be .. to keep on working on achieving that aim."

Those demanding an end to the arms ban -- a group of EU states spearheaded by French President Jacques Chirac -- argue that the EU ban is outdated given the political changes of the last decade and a half.

Critics allege that those pushing for the ban to be lifted are appeasing China in the hope of securing trade and political benefits from the emerging global economic titan.

Earlier this month Taiwanese President Chen Shui-bian warned the EU bluntly that lifting the arms ban could threaten the whole region.

"Should the EU decide to lift its arms embargo against China it might lead to a tilt in the military balance in the Taiwan Strait which would pose a clear threat to peace and stability," he said in a videoconference with EU lawmakers.

The United States has made it clear it opposed ending the EU ban, warning it could help upset the military balance between China and Taiwan, and members of the US Congress have even warned of trade reprisals if the EU goes ahead.

Responding to the US concerns, the EU sent a delegation to Washington this week -- and Solana said Thursday progress had been made in clearing up "misunderstandings."

Solana added that he plans to travel to Washington at the end of March to personally explain the EU plans.

The Chinese minister, holding a day of talks with EU officials in Brussels and Luxembourg, said he believed the EU had enough "political wisdom" to end the embargo, which he said was "irrational" and discriminatory.

"I believe that the EU, as a very important group of countries, will have enough political wisdom and political courage to lift as quickly as possible this measure," he said after talks at the Belgian parliament.

Solana declined to forecast when the ban will be lifted, or if it still can be by June.

"We are working as fast as we can. But I cannot guarantee you (when it will be lifted). But it will be," he said.