“Imperialism doesn’t pay,” said Robert Scheer in HuffingtonPost.com. That’s the lesson we Americans should draw from last week’s New York Times report detailing how China—and not the U.S.—is cashing in on Iraq’s oil. So much for “the myth of wealth following the flag.” The U.S. spent more than $3 trillion on the Iraq War, which cost the lives of more than 4,000 soldiers. Yet “it is the studiously neutral government of China that has most clearly benefitted.” Since the invasion, Iraq has become one of the world’s top oil producers, shipping an average of 1.5 million barrels—half of its oil-field production—to China daily. And the Chinese are also profiting handsomely from the interest on “loans they made that floated the U.S. war debt.” Our indebtedness over the Iraqi debacle will only grow as we pay to protect the shipping lanes “connecting Iraq’s oil with China’s ever-expanding economy.”
This is all admittedly frustrating, said Gordon G. Chang in NationalReview.com, especially since China helped supply Iraqi insurgents during the war by funneling arms and money through Iran. But “there is nothing we can do to prevent Chinese state oil companies from competing against the Western majors for oil rights in Iraq.” The Chinese play hardball, and unlike U.S. and other foreign oil companies, they’re “willing to accept Baghdad’s terms that permit only razor-thin profit margins.” In fact, it’s easy for them: Chinese companies have no shareholders, no dividends to pay, and don’t even have to generate profits. But China’s investment in Iraq may backfire. China’s growth is slowing, as anyone can see from its tumbling manufacturing and electricity production. With an “anemic” economy on the horizon, “Beijing’s relentless drive to dominate Iraqi oil production may not look like such a wise move.”
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There are foreign-policy benefits here, too, said Max Fisher in WashingtonPost.com. By snapping up Iraq’s oil, Beijing becomes less reliant on Iran. That could make Chinese officials “more likely to enforce sanctions against Iran” to force it to finally compromise on its nuclear program. And “the more money and interest China has tied up in a stable Iraq,” the more incentive Beijing has to promote a stable Middle East. Having skin in the game in this volatile region could make Beijing “act less like a free-rider on a U.S.-enforced international system and more like a responsible stakeholder.”
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China’s inevitable crisisfeature Subsidized companies keep building “unnecessary and unprofitable” factories, and government-directed banks keep pumping out money that will be wasted, said Michael Schuman at Time.com.
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Why the Fed missed the crisis
feature “The Fed slept’’ for a simple reason: Its own policies helped create the bust, said Robert J. Samuelson at The Washington Post.