CHINA, RUSSIA AND EUROPE: OIL, GAS AND MARKETS

RUSSIA AND CHINA

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Mao and Stalin
China and Russia share a 2,164 miles (3,483 kilometers) border. They have a history of mutual suspicion and hostility and remain suspicious of another despite their improved ties.

Russia and China have disagreed over the exact location of their common border since the 17th century. China once considered large chunks of Siberia and the Russian Far East as part of its territory. Russians began settling permanently in the Amur region in the mid-1850s. A treaty with the Chinese emperor gave them the north bank of the Amur River. At the time, the Chinese said the agreement was temporary. Chinese and Koreans living in the area were used as cheap labor to build the Trans Siberian Railroad..

After the Boxer Rebellion, in which a handful of Russians were attacked by Chinese, the Cossacks took revenge by launching an ethnic cleansing campaign on the Russian side of the Amur. Chinese men, women and children were herded to the river and told to swim to China. Most of those who tried to swim drowned, froze to death or were swept away by the current. Those that refused to swim were massacred. It is believed that 5,000 Chinese were killed around the Russian town of Blagoveshchensk from July 4 to July 10, 1900.

Wen Liao, chairwoman of the Longford Advisors, wrote, “From China’s standpoint...the Soviet collapse was the greatest strategic gain imaginable. At a stroke, the empire that gobbled up Chinese territories for centuries vanished. The Soviet military threat...was eliminated. China’s new assertiveness suggests it will not allow Russia to forge a de facto Soviet reunion and thus undo the post-Cold War set.”

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Stalin and Mao in 1949
In the second half of the 20th century relations between Moscow and Beijing oscillated between excessive dependence (particularly China on Russia) and almost zero interactions. Over the past 30 years, China's diplomacy, particularly its relations with Russia, has become far more sophisticated, nuanced, measured and matured. To a large extent, China's foreign policy has gone back to its deeper philosophical underpinnings of “unity, harmony with or without uniformity” ( he er bu tong). This is also one of the psychological anchors for the Sino-Russian strategic partnership after the two extreme types of relationship of “honeymoon” (1950s) and “divorce” (1960s and 1970s) between Beijing and Moscow. [Source: Asia Times, Yu Bin September 6, 2008]

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Soviet Influence in the 1950s

After the establishment of the People's Republic in 1949, China reorganized its science establishment along Soviet lines--a system that remained in force until the late 1970s, when China's leaders called for major reforms. The Soviet model is characterized by a bureaucratic rather than a professional principle of organization, the separation of research from production, the establishment of a set of specialized research institutes, and a high priority on applied science and technology, which includes military technology. [Source: Library of Congress]

“Under the Soviet bureaucratic model, leadership was in the hands of nonscientists, who assign research tasks in accordance with a centrally determined plan. The administrators, not the scientists, controlled recruitment and personnel mobility. The primary rewards were administratively controlled salary increases, bonuses, and prizes. Individual scientists, seen as skilled workers and as employees of their institutions, were expected to work as components of collective units. Information was controlled, was expected to flow only through authorized channels, and was often considered proprietary or secret. Scientific achievements was regarded as the result primarily of "external" factors such as the overall economic and political structure of the society, the sheer numbers of personnel, and adequate levels of funding. [Ibid]

“Soviet influence also was realized through large-scale personnel exchanges. During the 1950s China sent about 38,000 people to the Soviet Union for training and study. Most of these (28,000) were technicians from key industries, but the total cohort included 7,500 students and 2,500 college and university teachers and postgraduate scientists. The Soviet Union dispatched some 11,000 scientific and technical aid personnel to China. An estimated 850 of these worked in the scientific research sector, about 1,000 in education and public health, and the rest in heavy industry. [Ibid]

“The Soviet aid program of the 1950s was intended to develop China's economy and to organize it along Soviet lines. As part of its First Five-Year Plan (1953-57), China was the recipient of the most comprehensive technology transfer in modern industrial history. The Soviet Union provided aid for 156 major industrial projects concentrated in mining, power generation, and heavy industry. Following the Soviet model of economic development, these were large-scale, capital-intensive projects. By the late 1950s, China had made substantial progress in such fields as electric power, steel production, basic chemicals, and machine tools, as well as in production of military equipment such as artillery, tanks, and jet aircraft. The purpose of the program was to increase China's production of such basic commodities as coal and steel and to teach Chinese workers to operate imported or duplicated Soviet factories. These goals were met and, as a side effect, Soviet standards for materials, engineering practice, and factory management were adopted. In a move whose full costs would not become apparent for twenty-five years, Chinese industry also adopted the Soviet separation of research from production. [Ibid]

Tensions Between Soviet Union and Maoist China

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Russian and Chinese engineers
Despite common ideological roots and considerable Soviet assistance in over several decades, relations between China and the Soviet Union began to sour in the 1950s and got so tense that for a while China considered the Soviet Union to be its No. 1 enemy, presenting more of a threat than the United States.The relationship between China and the Soviet Union were strained by cultural differences between the two countries, personal difference between their leaders and ideological difference over the ways Communism was interpreted and implemented.

When Mao visited Moscow in 1949, it was several days before Soviet leader Joseph Stalin even acknowledged his presence. For his part Mao ignored the Russian food and ate meals alone in his room cooked by the Hunanese chef he brought with him from China. On visit to Russia in 1957 to celebrate the 40th anniversary of the Russian Revolution, Mao became bored almost immediately at a performance of Swan Lake by the Bolshoi Ballet and asked Khrushchev, "Why don't they just dance normally?" He left after the second act. [Source: "The Private Life of Chairman Mao" by Dr. Li Zhisui, excerpts reprinted U.S. News and World Report, October 10, 1994]

Tensions in relations between the two countries had began to escalate in the mid-1950s. China was angry with the Soviets for failing to fulfill their promise to help China build a nuclear bomb and for siding with India during its border dispute with China. The urban-based Soviets and the rural-oriented Chinese had different concepts of what Communism was all about. Mao, a firm believer in world revolution, was also angered by the Soviet Union's relatively amicable relationship with the United States.

China and the Soviet split over ideological differences in the 1950s when with Khrushchev de-Stalinization speech, condemning personality-cult leadership, at a time when Mao was using a personality cult to push ahead the Great Leap Forward. In 1958, Mao Zedong welcomed Nikita Khrushchev in swimming trunks and invited the Soviet leader to join him for a swim even though he knew Khrushchev couldn't swim.

The Soviets withdrew their technical advisors from Chinese factories and weapons plants and demanded payment on loans. in 1960. A bridge over the Yangtze is a famous landmark in China because it was started with the help of the Russians, who pulled out when it was half done, believing the Chinese could never finish it, but the Chinese did.

Clashes Between Russia and China

Relations between China and the Soviet Union worsened when armed clashes broke out on the poorly defined border in the late 1960s. The 1968 Soviet invasion of Czechoslovakia and the buildup of Soviet forces in the Soviet Far East raised Chinese suspicions of Soviet intentions. Sharp border clashes between Soviet and Chinese troops occurred in 1969, roughly a decade after relations between the two countries had begun to deteriorate and some four years after a buildup of Soviet forces along China's northern border had begun. Chinese and Russian soldiers fought along several sections of the border, resulting in hundreds of deaths.

Based partly on Manchu claims to the region, Mao said Russia had imposed unfair borders on China and Vladivostok and Khabarovsk in the Russian Far East belonged to China. In one disputed area, along the Amur River, Chinese soldiers taunted the enemy by dropping their pants and mooning the Soviet guards on the other side of the border.

Particularly heated border clashes occurred in the northeast along the Sino-Soviet border formed by the Heilong Jiang (Amur River) and the Wusuli Jiang (Ussuri River), on which China claimed the right to navigate. In 1969, Chinese and Soviet soldiers fought a bloody battle on Damansky Island in the Ussuri River in the Russian Far East. The fighting stopped short of all-out war but launched a massive military build up on both sides of the border and triggered a protest in Shanghai on March 3rd and 4th 1969, with 2.7 million demonstrators (a world record). In the 60s and 70s, the border between China nd the Soviet Union was tightly sealed. Border provocations occasionally recurred in later years--for example, in May 1978 when Soviet troops in boats and a helicopter intruded into Chinese territory--but major armed clashes were averted.

“In the late 1970s, China decried what it perceived as a Soviet attempt to encircle it as the military buildup continued in the Soviet Far East and the Soviet Union signed friendship treaties with Vietnam and Afghanistan. In April 1979 Beijing notified Moscow that the thirty-year Treaty of Friendship, Alliance, and Mutual Assistance--under which the Soviets aided the PLA in its 1950s modernization--would not be renewed. China joined the boycott against the Moscow Olympics in 1980 and participated n the 1984 Olympics in Los Angeles, which the Soviet Union boycotted.

Relations Between China and the Soviet Union Improve But Still Tense in the 1980s

Negotiations on improving Sino-Soviet relations were begun in 1979, but China ended them when the Soviet Union invaded Afghanistan late that year. In 1982 China and the Soviet Union resumed negotiations on normalizing relations. Although agreements on trade, science and technology, and culture were signed, political ties remained frozen because of Chinese insistence that the Soviet Union remove the three obstacles to improved Sino-Soviet relations. Although Chinese leaders publicly professed not to be concerned, the Soviet base at Cam Ranh Bay in Vietnam, Soviet provision of MiG-23 fighters to North Korea, and Soviet acquisition of overflight and port calling rights from North Korea intensified Chinese apprehension about the Soviet threat. Soviet Communist Party General Secretary Mikhail S. Gorbachev's 1986 offer to withdraw some troops from Afghanistan and the Mongolian People's Republic (Mongolia) were seen by Beijing as a cosmetic gesture that did not lessen the threat to China. [Source: Library of Congress]

In the mid-1980s the Soviet Union deployed about one-quarter to one-third of its military forces in its Far Eastern theater. In 1987 Soviet nuclear forces included approximately 171 SS-20 intermediate-range ballistic missiles, which China found particularly threatening, and 85 nuclear-capable long-range Backfire bombers. Approximately 470,000 Soviet ground force troops in 53 divisions were stationed in the Sino-Soviet border region, including Mongolia. Although 65 percent of these ground force divisions were only at 20 percent of full combat strength, they were provided with improved equipment, including T-72 tanks, and were reinforced by 2,200 aircraft, including new generation aircraft such as the MiG-23/27 Flogger fighter. Chinese forces on the Sino-Soviet border were numerically superior--1.5 million troops in 68 divisions--but technologically inferior.

In the late 1980s, China viewed the Soviet Union as its principal military opponent. Simmering border disputes with Vietnam and India were perceived as lesser threats to security. Although the PLA units in the Shenyang and Beijing military regions were equipped with some of the PLA's most advanced weaponry, few Chinese divisions were mechanized. The Soviet Union held tactical and strategic nuclear superiority and exceeded China in terms of mobility, firepower, air power, and antiaircraft capability. Chinese leaders reportedly did not consider a Soviet attack to be imminent or even likely in the short term. They believed that if the Soviets did attack, it would be a limited strike against Chinese territory in north or northeast China, rather than a full-scale invasion.

Improved Relations Between Russia and China

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Russian President Dmitry
Medvedev in China April 2011
China and Russia currently have what the call a “strategic partnership.” The two countries are trying to increase trade, boost their economies and are united in their determination to keep the United States from dominating world politics. China is the biggest foreign buyer of Russian arms. It also desperately wants Russian oil.

Relations improved in 1989 when Gorbachev visited Beijing, ironically right before the Tiananmen Square massacre. Yeltsin visited China in April, 1995 and received "what may be the warmest welcome ever accorded a Russian leader in China."

Chinese President Jiang Zemin and Yeltsin in signed a series of peaceful cooperation accords in 1994 in Moscow. In the agreement China and Russia promised to stop targeting nuclear weapons at each other. They also settled the dispute over a 34-mile section of the Sino-Russian border, where a skirmish in 1969 resulted in several hundred deaths. In November 1997, Yeltsin and Jiang Zemin signed an agreement on border and joint water use.

On July 2001, Russian President Vladimir Putin and Jiang Zemin signed a 20-year friendship treaty and made the two countries official strategic partners In December 2004, Chinese Prime Minister Wen Jibao visited Moscow. Chinese President Hu Jintao and Putin met in Moscow in March 2007 and affirmed their strategic ties and addressed an audience with a image of a China panda hold hands with a Russian bear. It was Hu’s third visit to Russia. He called Putin “my close friend” and spoke of a “warm atmosphere of trust.” The two leaders discussed Iran and North Korea and promised to strengthen economic ties and cooperate to advance a “multipolar world”---an apparent rebuff to Washington’s global dominance

In July 2008, China and Russia signed a pact that finally settled the demarcation line of their 4,400-kilometer border and have cut troop levels along the Sino-Russian border. China has purchased billions for dollars of weapons while Russia has quietly given Bolshoi Ussurisky Island back---a 130 square mile (335 square kilometer) island is located in the Amur River near Khabarovsk---back to China. Some speculated the move might be a preview to a transfer of the Kuriles to Japan. Russian nationalists are not happy about these moves..

One of Dmitry Medvedev’s first moves as the new Russian president in 2008 was visit China.

See Minorities

China Gaining the Upper Hand in Its Relationship with Russia

In October 2011, Reuters reported, “China is gaining the upper hand in its much vaunted friendship with Russia due to Beijing's shift away from relying on Moscow for advanced weapons and deep problems with energy cooperation, a report released on Monday said. While leaders of both countries play up the extent of their alliance and strategic ties, this partnership is unlikely to develop into anything more significant, the Stockholm International Peace Research Institute (SIPRI) said. [Source: Reuters, October 2, 2011]

"In the coming years, while relations will remain close at the diplomatic level, the two cornerstones of the partnership over the past two decades -- military and energy cooperation -- are crumbling," the think-tank wrote. "As a result, Russia's significance to China will continue to diminish."

While both work closely at the United Nations and frequently oppose U.S. policies or Western demands for sanctions on countries like Syria, China and Russia also value their relationship with Washington, the report said. "Furthermore, there are strategic planners in Beijing and Moscow who view the other side as the ultimate strategic threat in the long term."

China once relied significantly on Russia for weapons. But dramatic advances over the past few years mean that China will actually become a competitor to Russia on the world stage. That is one reason why Russia does not wanted to export its most high-tech equipment to China, the report said. "A more advanced Chinese defense industry is increasingly able to meet the needs of the PLA (People's Liberation Army), limiting the need for imports of large weapon platforms," it said. "At the same time, it is unclear if Russia is able and willing to meet Chinese demands because of problems with its own arms industry and concerns that China will copy technology and compete with Russia on the world market."

In energy cooperation, ties have frayed, as the sides argue about details of oil and gas imports into China and as Beijing turns to other suppliers, notably in central Asia, SIPRI said. A $1 trillion deal to supply Russian gas to China over 30 years, supposed to be the high point of President Hu Jintao's visit to Russia in June, has failed to materialize. Sources close to talks said price differences between the world's largest energy producer and Beijing were still too big.

"China is now in a position to have greater expectations of and place demands on Russia, while Russia is struggling to come to terms with this new power dynamic," the report said. "In both countries, strategic planners warn that the present competition could escalate to a more pointed rivalry, entirely undermining the notion of a strategic partnership. "Consequently, China and Russia will continue to be pragmatic partners of convenience, but not partners based on deeper shared world views and strategic interests."

Trade, Resources and Energy and Russia and China

Trade between Russia and China was around $33.4 billion in 2006, just 2 percent of China’s total trade. While parts of Russia are flooded with Chinese goods, about all that Russia sells to China are military hardware and natural resources. Much of it is Russian oil which arrived in tank cars by train on the Trans-Siberian Railroad. The cars carry 15 million tons of oil in 2006 and 10 million in 2005.

China is beginning to place great importance on its relationship with Russia as is becomes major supplier of China’s energy and one that is right at its doorstep.

In September 2010, China and Russia signed a series of energy and security deals and promised to boost their strategic partnership. The agreements covered a range of topics such as terrorism, nuclear energy, coal, aluminum, and banking. During th meeting Russian President Dmitry Mevedev and Chinese President Hu Jintao marked the 65th anniversary of the end of World War II and announced the completion of a Russia-China oil pipeline.

See Energy

Military Relations Between Russia and China

Moscow is anxious to earn money by selling arms and China is anxious to modernize and build up its armed forces. China buys about $1 billion worth of military stuff from Russia each year. It is the biggest foreign buyer of Russian arms and Russia is China’s main weapons supplier.

Russia has sold China with sent Sovremenny-class destroyers, SU-27 fighters, advanced MiG fighters, AWACS radar plane, cruise missiles, submarines, and heavy weaponry. It has also supplied China with pilots and trainers and has sent weapons designers and experts to help China with its cruise missile and nuclear weapon’s programs

Russia and China have been cooperating in military matters and sharing foreign intelligence since the early 1990s. In August 2005, Russia and China held joint military exercises called “Peace Mission 2005,” involving submarines, warships, helicopters, war planes, thousands of troops and some of the Russia’s most advanced technology.

The Exercises were held near Vladivostok in the Russian Far East and on the Yellow Sea near Shandong in China. In one live fire drill, 1,800 Russian and 7,000 Chinese troops launched a mock assault of the beaches of northern China while top generals from both countries sat at a desk together and watched. The exercises also included a simulated naval blockades, which included the firing of missiles and rockets while military music blasted from shipboard speakers.

China and Russia said the military exercise were part of their preparations to fight terrorists and insurgencies and “didn’t threaten any country.” Some analysts saw them as a demonstration to the United States that it was not a unilateral global power and a warning to Taiwan and Japan not to overstep their bounds. Others saw them primarily as a chance for Russia to show off its latest weapons to it best customer.

Russian and Chinese forces held another joint military exercises together in August 2007 in the southern Urals at Chebarkul testing Range. The maneuver involved about 6,000 troops from Russia, China and four Central Asian countries.

Europeans and the West and China

The European Union’s policy towards China has been described as lacking coherency with a number of different ideas on the table addressed in different ways by different countries. Depending on who you talk to China is seen as economic opportunity, major polluter and greenhouse gas producer, a human rights violator, a friend of intransigent dictators, a resource guzzler, a strategic partner, a geopolitical threat and trade headache. For the EU trade is a major issue but for individual countries in the EU global warming, Tibet and human rights are also very important.

The EU’s trade deficit with China was $247.4 billion in 2007.

Chinese nationalism in regard to the West has been described as “isolationism shading into xenophobia.” The Cantonese term for Europeans and Americans is gweilo, which literally translates to "foreign devils."

China's attitude toward the West still seems colored by the indignities that were inflicted on it during the colonial period. "China," said scholar Gerald Segal, has "not just a chip but a boulder on its shoulder."

Feelings of xenophobia are reinforced in the education system and inflamed by the government. Schoolchildren are reminded of humiliation brought upon China by Western nations and news reports are censored and edited to portray the United States and other Western countries in a bad light.

The European Union has tried to pressure China to reduce greenhouse gases and has battled with China over trade issues (See Trade, Textiles). It has an arms embargo with China because of its human rights abuses. China has approached NATO for dialogue.

China and the Eurozone Debt Crisis

China won some brownie points in Europe by buying up bonds from Greece and Portugal in 2010 when those two countries were suffering economic crises that threatened to undermine the Euro and bring down all of Europe with them. China offered to invest $5.2 billion in Portuguese government debt in the first quarter of 2011. This display of willingness on the part of China was enough to bring some calm to markets in Europe. In June 2011, Chinese Premier Wen Jiabao said China was ready to support the euro in the midst of eurozone’s debt crisis.

In October 2010, during a two-day visit to Greece, Chinese Premier Wen Jiabao announced that China was willing to buy Greek debt at a time when Greece was suffering severe economic problems and was on the verge of bankruptcy. Wen said, “China will undertake a great effort to support euro zone countries and Greece to overcome the crisis.”

In September 2011, AFP reported, Chinese Premier Wen Jiabao said China will continue to expand its investment in the eurozone but called on Western countries facing a crippling debt crisis to "put their houses in order". This occurred as as Europe's struggling economies were increasingly looking to cash-rich China as a possible rescuer. Wen also urged European Union leaders to reciprocate by according the country full market economy status ahead of schedule. [Source: AFP. September 14 ,2011]

Beijing has long demanded that the EU and United States accord China full market economy status, a technical designation that would remove certain restrictions to Chinese exports and investments in Europe.China has invested an increasing portion of its world-leading foreign exchange reserves in euro-denominated assets, and its leaders have repeatedly expressed confidence in the region's economies during the debt upheaval.

"China will continue to expand investment in Europe," Wen said as he delivered the opening speech at the summer session of the World Economic Forum (WEF), in Dalian, China. However, he added that "European Union leaders and the leaders of its (Europe's) main countries must also courageously look at China's relationship from a strategic viewpoint...Based on the WTO (World Trade Organisation) rules, China's full market economy status will be recognised by 2016. If EU nations can demonstrate their sincerity several years earlier, it would reflect our friendship.”

EU leaders have said in the past that the Asian giant has not yet met the necessary conditions, pointing out that most of China's largest companies are state-owned and their leaders appointed by the government. Wen also urged action to halt the spread of the sovereign debt crisis that has sent global markets plummeting, and said governments should work harder to maintain investor confidence.

China is sitting on more than $3 trillion in foreign currency reserves and has already committed to investing in Greece, Spain and Portugal. "Sovereign debt risks are growing in some countries, causing turbulence on the international financial market," Wen said.

On employing China to help solve Europe’s debt crisis.Fareed Zakaria wrote in the Washington Post: “Today, $10 trillion of foreign exchange reserves are sitting around across the globe. That is the only pile of money large enough from which a bazooka could be fashioned. The International Monetary Fund could go to the leading holders of such reserves---China, Japan, Brazil, Saudi Arabia---and ask for a $750 billion line of credit. The IMF would then extend that credit to Italy and Spain but insist on closely monitoring economic reforms, granting funds only as restructuring occurs. That credit line would more than cover the borrowing costs of both countries for two years. The IMF terms would ensure that Italy and Spain remained under pressure to reform and set up conditions for growth.” [Source: Fareed Zakaria, Washington Post, September 2011]

“What’s in it for the Chinese, who would have to devote at least half the funds and who have already politely demurred when approached by the Italians? China invests its foreign exchange reserves looking for liquidity, security and decent returns. It isn’t trying to save the world. Premier Wen Jiabao made slightly encouraging noises this week, hinting that he would increase bond purchases and asking in return for greater market access to Europe. That’s classic Chinese diplomacy: cautious, incremental and narrowly focused on its interests.”

“The time has come for China to adopt a broader concept of its interests and become a “responsible stakeholder” in the global system. The European crisis will quickly morph into a global one, possibly a second global recession. And a second recession would be worse because governments no longer have any monetary or fiscal tools. China would lose greatly in such a scenario because its consumers in Europe and America would stop spending. Of course, China would have to get something in return for its generosity. This could be the spur to giving China a much larger say at the IMF. In fact, it might be necessary to make clear that Christine Lagarde would be the last non-Chinese head of the organization.”

China and Germany

In June 2010, Chinese Premier Wen Jiabao and German Chancellor Angela Merkel met in Berlin, th both leaders pledging big increases in trade and Merkel pressing for "transparent" handling of the case of recently released Chinese artist Ai Weiwei. The meeting involved the signing of several bilateral deals, including an agreement for China to buy 88 Airbus jets, and for car makers Daimler and Volkswagen to expand activities there. Wen put their value at more than $15 billion. [Source: AP, June 28, 2011]

Germany and China want to increase their annual bilateral trade volume to “$284 billion by 2015, she said. Wen voiced hopes that the countries could even double their trade volume over five years. Trade between China and Germany totaled just over $130 billion in 2010, a 38.5 percent increase compared with 2009. China was the No. 7 buyer of German exports, at $53.6 billion; and it led the list of importers to Germany, which bought Chinese goods and services worth $76.5 billion. [Ibid]

Germany had a concession in Shandong in the colonial period. In 1995, bilateral trade between Germany and China was valued at $17.6 billion. In 1996, Germany froze official contacts with China in a dispute over Beijing's human rights record in Tibet. In 2007, Beijing was angered by a meeting between German Chancellor Angela Merkel and the Dalai Lama.

See Spies

France and China

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Hu Jintao and the leader of Germany
The French had a concession in Shanghai. They built a railroad from Vietnam to Kunming in the Yunnan province of southern China so they could sell French products to the Chinese, buy thing like silk, minerals, furs and precious stones and exploit deposits of tin and cooper and lumber. This railway, which has recently reopened, was a vital link between Southern China and Southeast Asia. Until recently is was easier to get goods to Kumming from Hanoi than from Shanghai.

Beijing was very angry with French President Nicolas Sarkozy for meeting with the Dalai Lama in December 2008. At that time Sarkozy was also the acting EU head and China cancelled an important China-EU summit meeting during the 2008 financial meeting because of the Dalai Lama meeting. By early 2010, France and China were working to improve relations. French President Nicolas Sarkozy, accompanied by his singer wife, Carla Bruni-Sarkozy, was the most high-profile leader to show up for the Opening Ceremonies of the 2010 Shanghai Expo.

In the 1990s France was in China’s doghouse for selling weapons to Taiwan. But those days seem to be over. French President Nicolas Sarkozy, accompanied by 270 officials, businessmen and journalists, was given a warm welcome during a visit in 2007. Over $30 billions of dollars worth of trade deals were signed during the trip despite unwelcome urging by Sarkozy for China to revalue the yuan and do more to tackle global warming. In recent years France has been a leader in trying to get the European Union to drop its arms embargo against China.

In 1995 France only had 1.7 percent share in the Chinese market. French projects included a gas-liquification plant, Citreon auto plant, grain sales and the sales of Airbus planes. When France sold some fighters to Taiwan, China closed down its consulate in Guangzhou and awarded a big contract the French were expecting to get to the Germans.

In the 1990s, a dinner party to celebrate the signing of several lucrative contracts---including one worth $1.95 billion for 30 Airbus 320 aircraft---was delayed for two hours when French Prime minister Alain Juppe decided to bring up the subject of human rights in his speech. Juppe ended up removing the embarrassing paragraph from his speech and the dinner went on but neither nation toasted the other.

Image Sources: Landsberger Posters http://www.iisg.nl/~landsberger/, Chinese government, Wiki Commons

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

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© 2008 Jeffrey Hays

Last updated December 2012

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