THE HUNGRY BEAR, Part 1 - Energy

THE HUNGRY BEAR, Part 1

Promises that can't be kept


At the third annual meeting known as the Valdai Club, a meeting between President Vladimir Putin of Russia and Russia-watchers made up largely of Western political scientists and academics and held this year on September 9, Putin acknowledged Russia's great and mounting global energy leverage, but he also delivered an ostensibly reassuring promise that Russia would not use its

rapidly intensifying and expanding global energy leverage to dominate others like "a superpower" would.

The Valdai Club has become a choice forum for Putin to attempt to allay Western fears over Russia's increasingly assertive and independent course and to polish Russia's image abroad. As such, one must realize that at a forum that is obviously slanted toward achievement of such political and public relations goals, the statements and claims made are specifically designed to accomplish the forum's purpose, and one must apply the appropriate subjectivity filters when analyzing them.

The hard fact is that a series of powerful arguments and irrefutable evidence exist to render completely hollow Putin's promise to "play nice" with mounting Russian global energy leverage. Even if Putin's promise is truly sincere and heartfelt, trends and forces not nearly under his control will soon dictate an outcome precisely opposite of his soothing promise, rendering it completely empty. How so? And what are the powerful arguments and irrefutable evidence that establish beyond any doubt the accuracy of such a conclusion?

Promises, promises!
Putin heads a resurgent Russia that is racing ever faster toward the consolidation of its key global position as respects energy security, the unique global position where it, more than any other single energy exporter, can and in fact already is setting the global agenda and taking the unquestioned leadership role in defining and drawing the circle of international energy security.

As evidenced at the recent Shanghai Cooperation Organization (SCO) summit in June, where Putin proposed the creation of an SCO-centered energy club, and the Group of Eight summit the following month, Russia has already expertly threaded the needle of international energy security policy, doing so with the thread of its own compelling energy security vision and strategy, powerfully bolstered by its mounting global energy leverage. It is now deftly wielding that needle and thread to sew together the circle made up of the globe's key energy producers and the powerful rising energy consuming economies of the East.

The profoundly deepening relations between Russia and the vast bulk of the globe's resource-rich regimes, along with the collective, increasing tilt of that entire producer grouping toward the rising markets in the East in accelerating diversification away from the traditional markets in the West, evidences the mounting potency of Russia's key global leadership role as respects energy. The circle of energy security is being drawn, is near to completion, and its center is in the East, not in the West. The current resources-based geopolitical rise of Russia and its partners bespeaks their impending, collective achievement of global ascendancy at the potentially gargantuan economic and political expense of the West.

Only 15 years ago matters were reversed - it was the West that was achieving global ascendancy at the gargantuan expense of Russia and the East. The Soviet Empire had collapsed in 1991 and soothing promises were made back then, too, notably by another leader that headed the then-ascendant world power, president George H W Bush, the 41st president of the United States. Are the current soothing promises of the ascendant Russian president any more reliable than were those of the 41st president of the US?

On January 28, 1992 during his first State of the Union address after the collapse of the Soviet Union, Bush said:
I mean to speak tonight of big things, of big changes and the promises they hold, and of some big problems and how together we can solve them and move our country forward as the undisputed leader of the age. We gather tonight at a dramatic and deeply promising time in our history, and in the history of man on earth. For in the past 12 months, the world has known changes of almost Biblical proportions. And even now, months after the failed coup that doomed a failed system, I am not sure we have absorbed the full impact, the full import of what happened. But communism died this year.

Much good can come from the prudent use of power. And much good can come of this: a world once divided into two armed camps now recognizes one sole and pre-eminent power - the United States of America. And they regard this with no dread. For the world trusts us with power - and the world is right. They trust us to be fair and restrained; they trust us to be on the side of decency. They trust us to do what's right.
Then-president Bush made an apparently sincere and heartfelt promise that the US has most certainly, at least in the view of the world at large, failed miserably to keep - the promise not to misuse its great power. Sound familiar?

The mounting global energy leverage that is increasingly coming to reside in the hands of circle-drawing Russia and its strategic partners is an irresistible power literally unequalled in all human history, for it is the power to throttle, or even to credibly threaten to strangle, the highly industrialized economies of the West. Such power makes the military potency of the US and/or of the old Soviet Union pale by comparison.

Why should anyone believe that Putin and rising Russia and its increasingly authoritarian resource-rich global partners are an exception to the maxim that says "Power corrupts, and absolute power corrupts absolutely", when even the leaders of the liberal democratic West have finally succumbed to gross arrogance and presumptuousness and did not prove to be such exceptions?

What do Russian policies and actions to date reveal as to the issue of whether or not Russia is "acting like an energy superpower"?

Part 2 The actions of an energy superpower
THE HUNGRY BEAR
PART 2: Corporate gigantism
By W Joseph Stroupe

(For Part 1 in this series, Promises that can't be kept, click here)

At the Valdai Club meeting, Russian President Vladimir Putin exclaimed: "We're not behaving like an energy superpower!" Is that a true statement? In a strictly confined context it is, but in a much larger and more meaningful context it is entirely a false



statement. How so?

In the Ukraine gas dispute, for example, Russia watched very warily as the United States and its European partners instigated a series of "colored" revolutions inside states strategically located on Russia's perimeter, trying to cut deeply into Russian political and economic power and threatening Russian stability and even its territorial integrity, all the while arrogantly expecting Russia to continue to provide extremely cheap, far-below-market-price energy to the new anti-Russian regimes that had been set up with Western clandestine and overt support.

Only an idiotic Russia complicit in its own weakening and disintegration would have continued to supply cheap energy under such conditions and circumstances. Russia is neither idiotic nor will it be complicit in its own disintegration at the hands of the duplicitous West.

Ukraine constituted the red line for Russia. The Kremlin decided to give the West a strong dose of the bitter consequences of its own foolish foreign policies with respect to Russia. It used its powerful energy leverage to demand that Ukraine pay closer to fair market prices for its gas, but more importantly it served notice that the US and certain of its European partners will not be given any further free ride, as it were. If they insist on pushing Russia too far then there is a heavy price to be paid, and Russia will not shrink from pointedly exacting that price.

After all, what was Russia supposed to do? Simply collapse in the face of the Western onslaught obviously aimed at carving away at Russian influence, Russian territorial integrity, Russian economic stability and other entirely legitimate core Russian interests? Russia will never simply hand over to the West what it keeps seeking by hypocritical and underhanded means. But while Russia has acted largely in a legitimate fashion in the Ukraine context, in a larger and more meaningful context it already gives powerful evidence of beginning to behave "like an energy superpower".

There was a time when the US superpower could throw its irresistible economic and political weight around virtually to guarantee that it came out on top of any negotiations with its allies and rivals alike. All understood that the costs of angering the US were far greater than any short-term (at best) economic or political advantages that might be gained by standing up to it in opposition.

The US didn't hesitate to "behave like a superpower" and use its unmatched strength, whether implicitly or explicitly, to secure significant advantage for itself. Of course, those days of unquestioned US strength and dominance are now past. Yet the US still attempts (mostly unsuccessfully) to get its way by force, whether economically or even militarily.

Russia has begun to do similarly by virtue of its mounting energy leverage. In the direct aftermath of the Ukraine gas crisis, Russia either cut off gas or threatened to do so to a number of other Eastern European customers, including Bulgaria, Romania and others, and has thereby secured for itself terms more to its liking. It has threatened Europe with accelerated diversification of its exports to the East if Europe fails to open its markets to rapidly advancing Russian investment and acquisition of downstream assets.

It has abruptly changed existing contracts and agreements and forced Western oil majors to take much smaller stakes in its oil and gas projects (or denied such stakes entirely) and has sued in court to halt projects headed up by Western oil majors. It has cut off oil shipments to Lithuania and gas shipments to Georgia. Russia increasingly plays hardball very much like an energy superpower would be expected to play. The energy weapon is irresistibly effective and Russia already shows signs that it enjoys the exhilaration of its energy-based successes.

Additionally, a new but profoundly significant trend has come to light - the policy of "corporate gigantism" via consolidation of Russian companies, especially those related to strategic resources. According to a September 12 report by Russia-based RBC News, Russian companies are actively being urged to consolidate into gigantic conglomerates that can exercise radically increased leverage on the global markets.

What is significant about the new strategy is that by consolidating Russia's own resources-related industries into gigantic conglomerates that either approach, or actually achieve, the status of global monopolies, it often isn't necessary for Russian companies to sell their shares to foreigners in an effort to expand their global reach and leverage. Instead, what are formed are gigantic corporate concerns possessing powerful global leverage within and over the markets without having to forfeit any measure of autonomy via the selling of assets to foreigners. RBC News states:
Gas giant Gazprom's plans to buy pipelines in Europe, SUAL's acquisition by Russian Aluminum, as well as Roman Abramovich's initiative to consolidate Russian steel companies [all constitute] a sign of a new trend in the Russian economy - the creation of giant companies able to claim the lead on world markets.
Reports from RIA Novosti on September 14 also indicate that Russian steel giant Severstal is actively looking to consolidate with an as-yet-unnamed "big industry partner". Alexei Mordashov, board chairman of Severstal, is quoted as saying, "We need consolidation - it is a sound and useful process for the industry."

In effect, Russia has found a way to increase radically its global resources-based economic and political leverage while sidestepping the costs and accountability normally faced by Western corporations and conglomerates that must render an account to their shareholders.

While Russia will undoubtedly pursue a mixture of both the traditional Western-style capitalization by initial public offerings and the Russian-style corporate gigantism by consolidation, the fact that it is embarking on the new strategy of corporate gigantism sounds an ominous warning for the West.

The global strength and powerful leverage of Russia's new gigantic corporate concerns will be difficult for the West to offset or to limit because Russia can move much faster down that path than can the West, thus enhancing its global market leverage, and even achieving monopoly status, in key resources-related areas before the West can react in a meaningful way.

At the same time, key Russian corporations positioned very close to the Kremlin continue to purchase significant stakes in, and assets of, Western corporations and industries related to energy, steel, aviation and other strategically important industries. Additionally, Russian companies continue to advance down the road of entering carefully selected joint ventures with certain of their counterparts in the West, thereby further binding the fortunes of such Western companies to cooperation with Russia. All such activities and strategies on the part of Russia work to compound its global economic and political leadership, influence and leverage deep into the West. That is, in fact, the precise goal of such activities and strategies.

Russia's very strong suit is its industries related to strategic resources and other key industries that rely heavily on such resources, such as aviation, space, steel and shipbuilding. The Russian Federation is positioning itself in the global markets to capitalize massively on, even monopolize, such key industries. It has embarked on a clear strategy of ensuring a central role for itself, and of consolidating its global position in such a way that it cannot be shifted aside and must be reckoned with on its own chosen terms. It is already beginning to "act like a strategic-resources superpower".

Also of great importance along these lines, Russia, by actively taking leadership in defining and drawing the circle of international energy security, is "behaving like an energy superpower" by laying the comprehensive global basis for a new definition of energy security and the political and economic groundwork for a new global energy security arrangement with itself at the center, one that is quite able to include into the circle those powers that take a favorable stance toward Russia while simultaneously excluding to a significant degree those powers that do not take such a favorable stance.

As instability mounts in the oil-rich Middle East and Africa, Russia's global energy leverage only increases, and its global energy leadership is only more firmly consolidated. Russian leaders see clearly that geopolitical developments are rapidly ushering Russia into the key global energy position, and they are flush with more than mere cash - they are becoming flush with the power that accompanies Russia's key position. As such, Russia can be expected to ever more fully act the role that it is progressively positioning itself for and that it is being handed - that of energy superpower, notwithstanding Putin's disarming claims to the contrary.

The West and the rising East are locked into competition for control of strategic global resources. There are high stakes and the rules of the revived Great Game.

Tomorrow, Part 3: No more Mr Nice Guy
THE HUNGRY BEAR
PART 3: No more Mr Nice Guy
By W Joseph Stroupe

(For Part 1, Promises that can't be kept, click here
For Part 2, Corporate gigantism, click here)

East and West are now irreversibly locked in a monumental struggle for control of the globe's coveted strategic resources - this is the revived Great Game and its players are rapidly approaching the moment of truth. The stakes for both sides are



colossal and both sides fully recognize that fact. However, neither side likes to admit explicitly the existence of such a struggle that will define which side achieves global ascendancy and which side faces the potential of an energy-based economic checkmate.

The United States prefers to strive for advantage in the Great Game while hiding behind the veil of the ostensibly noble policy of spreading "freedom" and "democracy" - yet it is active in such a policy primarily only in countries that are either rich in strategic resources or are strategically located as respects the export of such resources. By military invasion and occupation, by encirclement through proliferation of its military bases, by the spread of "colored" revolutions, by sponsoring oil and gas pipelines that circumvent Russia and its partners, and by various diplomatic drives, the West attempts to roll back Russian control over resources and to consolidate its own.

Russia and the East prefer to make advances in the Great Game while simultaneously and fervently denying any interest whatever in locking up the bulk of the globe's strategic resources and thereby winning the game - yet virtually every diplomatic and economic move on the part of Russia and the East is obviously targeted at and designed incrementally and insidiously to accomplish that very goal, and rapid progress is being made toward that very end.

Are onlookers supposed to conclude that Russia and the East are progressively and rapidly achieving dominance over the globe's resources purely by random chance, through no conscious effort or clever strategy on their part? How could that be the case, especially when the West is actively and fervently working against Russia and the East to try to prevent such an outcome, yet that very outcome is nearly completed?

In the Great Game the loser will forfeit virtually everything of value, or will be held backward on its heels in a position where there is no escape from the threat of such forced forfeiture. If Russia loses the game, then the West, sitting in de facto control of massive reserves of oil and gas around the globe, will be sufficiently able to control the global price and availability of oil to bring the price down to a point where Russia's economy will begin to falter, or worse.

Of course, a win by the West at this late date in the Great Game would take much more than a Hail Mary pass. [1] However, the West in general and the US in particular will never willingly forfeit the game, even though the odds are massively against it now. The game will be played out to its finish and the US will stop at nothing to pull out a win, even at the last moment if possible.

By additional military adventures and "colored" revolutions, threatening even Russian and Chinese territorial integrity and economic stability themselves, the West can fully be expected to strive to forestall its own forfeiture of the game as it increasingly sees the clock running out on its energy security fortunes. Considering the current occupant of the White House, no one should make the mistake of assuming further US military adventures are not likely, because as the clock runs out on the US, the likelihood of such adventures increases radically.

Russia and the East will thus be given no choice by the West but to resort to the full and potent use of their growing energy leverage. For reasons far beyond President Vladimir Putin's control, therefore, his promise to "play nice" with energy is entirely an empty one.

How is Russia already bringing its global leverage as an "energy superpower" to bear on the global markets and on political leaders to oblige the West to come around to its preferred terms, and what are the implications? Perhaps the analogy below will help explain.

Inside the two-minute warning
Folks, we're back. You're watching the Petroleum Bowl world championship game being played out between these two longtime rivals, East and West, right here at the grand old stadium at Mineral Field. This grand stadium was always the venue of choice for these two rivals until 1991 when the East's program virtually collapsed. This whole complex has deteriorated through disuse since then. But the East is back now, and how, and Mineral Field has recently been restored to a glory greater than ever.

The West was heavily favored coming into this game, but what a reversal we've seen today! To recap, during the first half the West got deep penetration into the East's territory with runs and pass plays up the gut and to the outside and was able to get into the n-zone several times. But late in the second half of the game the East has quickly capitalized on multiple fumbles by the West in a come-from-behind impending win like we've never seen before.

The East is getting deep penetration all the way down to the n-zone of the West, but not up the gut - those end-runs and trick passing plays to the outside have taken their toll on the West, and they're down by a touchdown late in the game. The West is virtually beating itself in this pivotal game. We're inside the two-minute warning in the fourth quarter of the game and the East is inside the 10-yard line with a first down, driving toward another touchdown.

The West has burned all its timeouts and can't stop the clock, and most of the West's best defensive players along with both its quarterbacks are out of the game with injuries. The East looks unstoppable. Even if the West gets the ball back before the clock runs out, it's very unlikely to be able to advance the ball down the field against the powerful, combined defense of the East. Make no mistake about it, though, this West team is going to fight down to the bitter end with everything they've got. They've been in a similar bind before and there's no "quit" in them. The East knows they've got their hands full in the closing minutes of this game.

And what do you think of the late comments coming in from the East's head coach, Putinov? That East team has endured slam after slam about its dirty play from the West's assistant head coach Mick Shaney, and now the offensive coordinator Pritchard Shugar has gotten into the act, saying the East should have been penalized several times on its last drive to the n-zone. But the penalties and personal fouls racked up by this West team aren't anything to be proud of, either. Head coach Putinov just smiled wryly and promised that his team would "try to be more courteous on the field", and that when it comes right down to it winning the game cup doesn't matter to the East.

Don't you believe it for one minute, folks! You don't get to this level of play and competition unless you train harder than anyone else, strategize harder, play harder and want victory more than you want anything else. Head coach Putinov is just having some fun at the expense of coaches Shaney and Shugar. And Putinov knows full well that as the clock runs down he's going to have to pull out the stops and give it all he's got in the last two minutes of the game to seal a victory. It has all come down to what happens in the next two minutes, folks. Stay glued to your screens because we're not going anywhere until one of these two teams achieves victory.

Note
1. In American football, a Hail Mary pass is a long, desperate forward pass of the ball when it is clear no other play will work; it is so called because chances of its success are low enough to suggest the need for divine intervention.

Tomorrow, Part 4: The West's thorny crown

THE HUNGRY BEAR
PART 4: The West's thorny crown
By W Joseph Stroupe

(For Part 1, Promises that can't be kept, click here.
For Part 2, Corporate gigantism, click here.
For Part 3, No more Mr Nice Guy, click here.)

Russian President Vladimir Putin complained at the Valdai Club meeting that consuming nations in the West too strongly focus on their own energy interests and security while simultaneously slighting the interests and security of producers. He noted that consuming nations want suppliers to pledge continuity of supplies



for the long term, "so customers should not be able to turn around and say, 'We don't need it now.' Security works both ways. We need assurances, too."

Putin explicitly stated that Russia and other suppliers want long-term supply contracts with consuming nations so that suppliers know there will be a "stable demand" for their exports. It can easily be appreciated how achievement of such goals amounts to a tiara or coronet to adorn Russia in its key global energy position. But the very achievement (successfully concluding long-term supply contracts) that constitutes Russia's victory crown simultaneously serves as the thorny crown of the West.

The long-term supply contract tends, of course, to lock the West's consumer states into deeper and longer-term dependence on Russia, thwarting moves toward diversification of supply. Russia's economic and political leverage is deepened and compounded, therefore. Additionally, open competition tends to be diminished because the consumer states are less able to shop around for their energy needs. That factor could have a negative, elevating effect on prices over the medium to long term.

There is also the distinct likelihood that as such long-term contracts multiply, the world's energy supply and even its reserves will become progressively "locked up" into private pools for consumption only by the states that are party to such contracts, thereby robbing oil and gas from the virtual global pool sustained by the traditional liberal global energy market order. Especially is that the case because, increasingly, such long-term contracts include acquisition of equity shares of the producing fields by key, energy-thirsty consuming economies in the East.

That development has potentially gargantuan implications for the West because, in the strategically tight global supply situation, the West cannot afford to see growing portions of the already tight global supply "turn invisible and inaccessible" because of the proliferation of private, state-to-state long-term supply contracts between suppliers and key consumers in the East. The implications could include the development that unless you're inside the circle defined by such long-term agreements, then you're outside the circle of energy security. That implication could develop as a full-fledged concern much more quickly than is generally recognized, because by and large it is the economies of the East, whose rise is meteoric and whose energy appetite is ravenous, that are far ahead in the concluding of such agreements with suppliers to secure their own growing private pools of oil and gas. The West is already far behind that curve.

The virtual global pool of oil and gas could rapidly become significantly shrunken, and inordinately slanted toward serving the energy demand of the economies of the West that refused or otherwise failed to give suppliers such as Russia what they are demanding - long-term contracts.

That would tend to move the fundamentals in the direction of a revival of the possibility of a targeted energy embargo because, if the US-backed liberal, traditional energy market order should thus become inordinately slanted toward the West's energy needs, rather than remaining balanced in serving the global need, then a supplier or group of suppliers could hit the West with a relatively focused embargo simply by decreasing the amount of its oil and/or gas that is sold on the open global market. Those consuming states (at present predominately those in the East) that have early on entered long-term contracts with suppliers would be relatively unaffected.

All the building blocks to support and bolster a new position of profound global energy ascendancy and dominance are steadily being put in place by Russia and its producing partners, in concert with its consuming partners in the East. Consuming states in the West are now faced with a terrible choice: they can either lock themselves irreversibly inside "the circle" of strategic energy dependence on Russia and its partners for the long term, or they can refuse to do so at serious risk of being left outside the new international circle of energy security whose parameters, principles and terms are being defined and completed by Russia and its partners.

When Putin promises to "play nice" with energy and other strategic resources, it must be understood that his idea of "playing nice" isn't remotely the same as what is hoped for in the West, which has been able until now to have its cake and eat it too, almost always giving suppliers the short shrift. Those days are already over. There is emerging a new global reality as respects energy security, and the West will have to forfeit a significant measure of its economic and political independence and autonomy in return for what Russia, not the West, defines as "energy security". The West is already forfeiting along those lines.
Are global energy developments moving in that direction merely "by chance occurrence" as Putin insists, or have Russia and China been working for a decade or more to "cook up" such developments, and what are the implications?

Tomorrow: Russia and China 'cooking something up'

THE HUNGRY BEAR
PART 5: Russia, China 'cooking something up'
By W Joseph Stroupe

(For Part 1, Promises that can't be kept, click here.
For Part 2, Corporate gigantism, click here.
For Part 3, No more Mr Nice Guy, click here.
For Part 4, The West's thorny crown, click here )

Russian President Vladimir Putin was asked about Russia-China relations and the mounting regional/global clout of the SCO (Shanghai Cooperation Organization). He expressed great



satisfaction and excitement about the path of Russia-China relations, but quickly denied that the two strategic partners were involved in "cooking anything up between themselves".

In fact, he claimed that the mounting regional and global clout of the SCO has never been planned for or intentionally striven for by the two partners, that it has entirely happened "by surprise". And, of course, he claimed once again that neither the SCO nor the deepening Russia-China strategic partnership was "aimed at the US or NATO" (North Atlantic Treaty Organization).

But contrary to Putin's soothing assurances to the West at the recent Valdai Club meeting, Russia and China most certainly do have "something in the geopolitical oven", and it has been cooking steadily for nearly a decade. In fact, their geopolitical main course is practically ready to be served to the table, so to speak, and directly contrary to Putin's recent claims they both intended from the beginning for the SCO eventually to play a significant role.

One only has to read the Sino-Russian Joint Statements from 1997 forward to see that the two partners embarked on a carefully conceived and adroitly executed geopolitical course and strategy a decade ago, and they have made tremendous progress toward the achievement of the specific goal they set way back then. Note these facts and precisely what their goal has been in the excerpts and commentary that follow:

From the Sino-Russian Joint Statement of April 23, 1997:
The two sides shall, in the spirit of partnership, strive to promote the multipolarization of the world and the establishment of a new international order.

The establishment of a just and equitable new international political and economic order based on peace and stability has become the pressing need of the times and the inevitable necessity of history.

All countries, big or small, strong or weak, rich or poor, are equal members of the international community. No country should seek hegemony, practice power politics or monopolize international affairs.

Both sides express concern over the attempt at enlarging and strengthening military blocs, because such a tendency may pose a threat to the security of certain countries and aggravate regional and global tension.

Both sides underscore that the vast member of developing countries and the Non-Aligned Movement are important forces in promoting world multipolarization and building a new international order.

Developing countries have enhanced their awareness of self-strengthening through unity, played a greater role in world politics and increased their share of the world economy.

Their rise will give a strong boost to the historical process towards the establishment of a new international order. [Emphasis added]
From "PRC, Russia leaders issue joint statement", December 10, 1999:
[The two sides] propose to push forward the establishment of a multipolar world on the basis of the principles of the United Nations Charter and existing international laws in the 21st century, strengthen the UN's dominant status in international affairs, and peacefully resolve international disputes through political means ... and establish a fair, equal, and mutually beneficial international political and economic order. Third, the two sides point out that negative momentum in international relations continues to grow, and the following is becoming more obvious: The forcing of the international community to accept a unipolar world pattern and a single model of culture, value concepts and ideology, and a weakening of the role of the United Nations and its Security Council; the seeking of excuses to give irresponsible explanations or amendment to the purposes and principles of the UN Charter; the reinforcing and expanding of military blocs; the replacing of international law with power politics or even resorting to force; and the jeopardizing of the sovereignty of independent states using the concepts of "human rights are superior to sovereignty" and "humanitarian intervention".

The two sides agree to work together with the rest of the world to oppose the momentum presently preventing the establishment of a just multi-polar structure for international relations.

Seventh, the two countries express their satisfaction with the implementation of the Bishkek Declaration issued by the summit of China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan, known as the "Shanghai Five States", on August 25, 1999.

In line with the Sino-Russian equal and trustworthy strategic partnership of cooperation, the two sides are willing to strengthen their cooperation, considering that the two countries share similar or identical views on such issues as the establishment of an international multipolar order and democracy and justice in international affairs. [Emphasis added]
From the China-Russia Joint Statement of July 1, 2005:
Strictly abiding by the propositions on building a multipolar world and a new international order as enunciated in the Joint Statement of the People's Republic of China and the Russian Federation Regarding Global Multipolarity and the Establishment of a New International Order of April 23, 1997,

The international community should thoroughly renounce the mentality of confrontation and alignment, should not pursue the right to monopolize or dominate world affairs, and should not divide countries into a leading camp and a subordinate camp.

In the sphere of regional security, the establishment of security cooperation mechanisms that take into account the interests of all parties, are open, and are not directed at other countries has fundamental significance. [Emphasis added]
Look at the declarations
The ultimate target of deepening Russian-Chinese strategic cooperation is clearly the pushing toward the establishment of what they call the "multipolar world order" to end US global dominance. The joint statements above prove that fact beyond any reasonable doubt whatever.

Consequently, the repeated claims by the two that no "third country" is being targeted amount only to pure diplomatic indirection and propaganda. The US most certainly is being targeted. You cannot push to establish a new international order to end dominance by one power without simultaneously targeting the one power that currently has that domination - namely, the United States itself. However, the targeting being done by Russia, China and their global partners isn't that of directly hitting the US economy to sink it, or of directly attacking the US military in a confrontation.

The targeting of the US global position of dominance is much smarter than that. It is indirect targeting, in which US economic, political and even military dominance and power are undermined and weakened by virtue of the creation of a deepening and widening global complex of strategic resources-based economic, political and military ties, a complex that is centered in the East rather than looking to the US as center, and a complex that mostly disregards, and increasingly rivals, US interests.

That strategy of ending US global dominance by pushing for "multipolarity", not directly confronting the US but rather building a non-US-centric global complex, works because the US is able to dominate the globe only because the world at large permits it to do so and either actively or indirectly facilitates such dominance. The US is not nearly omnipotent, politically, economically or militarily. It must dominate by virtue of willing allies and key powers that permit the US to exercise its influence through them, and by maintaining fear on the part of its rivals with respect to opposing the US in the spheres of the global economy and the military. Without the combination of willing cooperation and fearful acquiescence on the part of the world at large, the US will tumble from its global position of dominance.

Russia and China have correctly calculated, therefore, that if they can undermine that willing cooperation and fearful acquiescence by turning enough of the globe's key states away from a US-centric stance toward a stance more in line with their own purpose, inculcating them firmly into their own growing complex of economic, political and even military ties centered in the East, then the US will incrementally suffer ever greater political and economic isolation and subsequent weakening of its leverage and position on the world stage.

At the center of the new global complex of ties is the Russia-China axis itself. That has been the strategy of the two partners since before they issued their Joint Statement of April 23, 1997 - to build a new international economic and political order that isn't US-centric, that progressively robs the US of the deep cooperation and fearful acquiescence it needs across the globe to keep it atop the current order, and that thereby cuts deeply into the US ability to continue to dominate the world order. They aren't directly confronting the US in their efforts, but make no mistake - they are powerfully targeting the US nonetheless.

The United States has inadvertently cooperated on a massive scale with Russia and China in their push to create this new order, cooperated with them in their political, ideological and economic push to isolate the US incrementally. By its policies and actions since the collapse of the Soviet Union, and especially since September 11, 2001, the US has profoundly isolated itself on the world stage. That has played, and continues to play, directly into the hands of Russia, China and their strategic partners who understand US global isolation is the key to ending US global dominance. That is the real meaning of the policies and actions undertaken by Russia, China and their partners in the lead-up to the US invasion of Iraq in 2003, in which they have worked steadily to isolate the US and to keep it isolated, and to deepen its isolation. They have been very quick to capitalize on growing US isolation to construct rapidly their global complex of resources-based economic, political, ideological and security ties not centered on the US, and as rivals to the US.

Hence whenever Russian and Chinese leaders say that neither the US nor NATO is being targeted by their activities, that is an entirely facetious statement designed to give the two partners plausible deniability, in that the statement is technically true - they aren't directly hitting or confronting the US economy or military. But they most certainly are actively working to undermine the US global position by insidious, indirect and profoundly effective means. And US leaders simply aren't intelligent and humble enough to understand the effectiveness of the strategy or how they themselves are aiding in its success.

Note that in the joint statements quoted above, the two partners (Russia and China) repeatedly spoke not only of a new political order, but also of a new international economic order. Notably, in the April 23, 1997, statement the following statement was made:
Both sides underscore that the ... developing countries and the Non-Aligned Movement are important forces in promoting world multipolarization and building a new international order.

Developing countries have enhanced their awareness of self-strengthening through unity, played a greater role in world politics, and increased their share of the world economy.

Their rise will give a strong boost to the historical process towards the establishment of a new international order. [Emphasis added]
It so happens that the vast bulk of the world's strategic resources are located within the very group mentioned here, the developing countries and the Non-Aligned Movement. It is not by accident that Russia and China have concentrated their efforts there, succeeding in deeply integrating those nations into their global complex of ties, and simultaneously those resource-rich nations have become ever more characterized by adoption of deeply anti-American economic, political and/or religious ideologies.

The undermining and weakening of US global economic power and dominance are key to the achievement of the goal of ending the unipolar order that is led by the United States. It is being accomplished without direct confrontation between the US and its rivals. The massive ongoing transfer of wealth from the US to its rivals and the attendant weakening of the US economy is in no small part facilitated by energy developments and the growing cohesiveness and anti-US political affinity among the globe's energy producers, who by and large disdain continued US global dominance. Additionally, entities such as the SCO are being employed to reverse US geopolitical advances in energy-rich regions by helping to close ranks among its members, further placing the strategic US economic security in a precarious position. The US has requested, but has been denied, any role whatever in the SCO, which is shaping up to be a closed entity to the West.

On September 15, RIA Novosti reported that prime ministers of SCO member countries, while gathered in Dushanbe for a key meeting, gave instructions for studies to be conducted into the establishment of a regional energy club. In June at the SCO Summit, Putin caused a stir when he proposed the creation of the energy club centered in the SCO and designed to balance the interests of producers and key consumers such as China (a key founding member of the SCO) and India (which has observer status in the SCO) in a new arrangement that would transcend the leverage of a mere axis of producers alone. That proposal appears to be taking definite shape now, with officials from Kazakhstan and Russia tasked with drafting proposals for a key meeting next year of the grouping's fuel and energy experts. The ongoing development of the SCO-centered energy club proposed by Putin in June is a development of profound importance and constitutes a major advance in the Russian effort to complete the drawing of the circle of international energy security, a circle that by and large excludes the West.

Russia and China have been "cooking something up between themselves" for at least a decade now, and the results are already dramatic, to say the least. Don't expect Russia and its partners to "play nice" with energy and other strategic resources, not in view of the colossal stakes for both sides in the Great Game and the fact that the West will stop at nothing to try to turn the Game around in its favor before the clock soon runs out.

Putin's promise that Russia will not behave like an energy superpower is a promise that cannot be kept. It is a promise the West must not give credence to or rely upon, but the West itself is partly to blame for the increasingly contentious relations between resource-rich East and resource-dependent West. The moment of truth for both sides in the Great Game and for the current global order itself is impending.

This is the final article in a five-part report.