Leaders from China, Russia and four central Asian nations meet tomorrow in
Shanghai to discuss security and energy as attention focuses on an observer:
Iran's President Mahmoud Ahmadinejad.
The Shanghai Cooperation Organization, founded five years ago to combat
terrorism, will gather in a cordoned-off area of China's financial center to
talk about prospects for central Asia. Energy will be higher on the agenda than
in the past. The six member and four observer countries in the group account for
23 percent of the world's oil reserves.
``Securing a steady energy supply is the top priority for China, it has
everything to do with national security,'' Jin Riguang, an energy adviser to the
Chinese government, said in a June 1 interview in Beijing. ``We also realize the
U.S. is trying to secure footholds in central Asia.''
The U.S. has accused Iran, which has the world's second- largest oil
reserves, of sponsoring terrorism and developing nuclear weapons. Ahmadinejad
arrives in Shanghai today and will give a speech tomorrow.
The meeting will be attended by China's President Hu Jintao, Russian
President Vladimir Putin, the leaders from the other member states, Kazakhstan,
Kyrgyzstan, Tajikistan and Uzbekistan, and from observer-nations Mongolia and
Pakistan. India is sending its oil minister.
Incentive Package
The United Nations Security Council's five permanent members -- the U.S.,
China, Russia, France and the U.K. -- along with Germany, on June 6 offered
technology and trade incentives to Iran in return for the nation ending uranium
enrichment. Iran's government is studying the proposal and may make a counter
offer.
``There is new opportunity for peaceful resolution of the Iranian nuclear
issue,'' Jiang Yu, a spokeswoman for China's foreign ministry, said at a
briefing in Beijing yesterday. ``China appreciates Iran's expression that it is
willing to give serious study to an international proposal.''
Nuclear Program
It would be ``strange'' and ``unusual'' for Iran to join the Shanghai group,
given the country's history of supporting terrorism, U.S. Secretary of Defense
Donald Rumsfeld said in Singapore on June 3.
The U.S. says Iran is striving to build a nuclear weapon in violation of the
Non-Proliferation treaty, while Ahmadinejad insists the program is for energy
production.
Iran is considering a proposal, including incentives and penalties, to give
up its nuclear program. The plan was drawn up by Britain, France and Germany and
approved by the U.S., China and Russia. Rejection may prompt Europe and the U.S.
to push for United Nations-backed sanctions, a step China and Russia have
resisted.
Security is a priority for the meeting. Much of China's financial hub,
state-owned banks, schools and government departments will be closed during the
event, and private companies have been advised to take holidays. The Lujiazui
financial district surrounding the venue, where HSBC Holdings Plc and Citigroup
Inc. have their local headquarters, will be cordoned off. Residents on the
opposite side of the river have been told to stay away from their windows.
Energy Cooperation
``Energy cooperation will be discussed, along with other topics including
politics and economic development,'' Li Hui, China's assistant foreign minister,
said in Beijing on June 12.
The politics is likely to include Iran, whose president is resisting pressure
from the UN Security Council to abandon his nation's nuclear program. The
economic development may include oil and gas drilling.
``By focusing on a strategy of securing energy from central Asia and Russia,
we can minimize conflicts with the U.S., which is dependent on the Middle
East,'' said Jin, the Chinese government energy adviser, who is a professor at
Beijing's University of Chemical Technology and a member of the standing
committee of the Chinese People's Political Consultative Conference.
China's Acquisitions
China is stepping up acquisitions of overseas fields after oil demand more
than doubled in a decade. In October, China National Petroleum Corp., the
nation's biggest oil producer, completed a $4.18 billion takeover of
PetroKazakhstan Inc., in the country's biggest purchase of overseas energy
assets. A pipeline from Kazakhstan started delivering oil to China in May.
Kazakhstan is among the group's members looking to China to lower dependence
on oil and gas export routes through Russia. The benefit for China is energy to
fuel economic expansion exceeding 10 percent.
Cooperation with Russia is among China's strategies for energy security. Oil
sales transported by railway from Russia are increasing. OAO Gazprom, Russia's
largest gas producer, and China National Petroleum, are considering building a
gas pipeline linking Russia and China, Russian Energy Minister Viktor Khristenko
said on March 21. An oil pipeline is also being discussed by the nations.
The Shanghai Cooperation Organization in July last year underlined central
Asia's importance by calling for the U.S. to set a timeline for the withdrawal
of its military forces from the region. U.S. officials are negotiating the
extension of a contract to use a base in Kyrgyzstan, after neighboring
Uzbekistan closed a similar facility in November.
U.S. Bases
The U.S. has ``no intention'' of withdrawing from Afghanistan nor of leaving
Central Asia, U.S. Secretary of State Condoleezza Rice said in a briefing in
Beijing on July 10 last year after meeting China's leaders.
``China's search for energy and America's military expansionism and its
requirement for oil puts the two nations in a competitive situation,'' said
Laurence Brahm, a U.S. lawyer based in Beijing and author of more than 20 books
on China, including ``China's Century: The Awakening of the Next Economic
Powerhouse.''
The Shanghai Cooperation Organization's member states account for 23 percent
of the world's population, according to data compiled by the organization.
Including observer states would boost the figure to 44 percent. The member
states account for 10.5 percent of all the soldiers in standing armies
worldwide. Including observer states would boost the figure to 17.5
percent.
