Commentary: Keep eyes on China/Russia alliance and Ukraine 'war' clouds

Daniel Fine
Opinion Page Contributor

Forty years ago the Soviet Union confronted China with more than 50 military divisions and its latest two-stage solid-fueled missile, the SS-20. 

The United States followed strategic thinking that it was engaged in “encircling” China.

No more of this attitude is present in Russia, and we can look back to the Soviet Union with "nostalgia."

China and Russia have become regional and world allies against the United States and its collective deterrence, the North Atlantic Treaty Organization (NATO).

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Henry Kissinger’s geopolitical strategy of keeping China apart from Russia has been discarded as useless with a new era in Beijing at the Winter Olympics. China has joined Russia in opposition to NATO advancement everywhere, first in the Ukraine and last in Taiwan.

This is not only a second or third Cold War, but a 21st Century fracture of the Second World War peace. President Biden presides over a deterrent against Russian military aggression in the Ukraine that would involve China.

Are any of the Biden Administration's economic and financial “sanctions,” such as  denial of a banking privilege, of clearing accounts — or “SWIFT,” an international bank payment clearing house — even a deterrent to Russia?

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Is the Biden administration prepared for China’s response in support of Russia? 

China has the capacity in world currency and reserves to provide Russia with a new “SWIFT.” China, as an ally, will import Russian oil and gas if its exports are sanctioned or “boycotted,” as Britain proposed in the case of Iran in the 1950s.

It will be China keeping Russian oil contracts to Asian markets open.

What is the risk to the United States currency, the universal dollar in trade? China and Russia can counter sanctions in world trading markets.  

This would be the basis for a dollar rival in the world economy.  With over 30% of United States debt held by China alone, what is the risk of China not buying more, or selling?  Perhaps, no more than a yield loss from higher U.S. interest rates which could be accepted as a non-military response.

Is the new China-Russia alliance enough for the  State Department under President Biden to settle for a “Finlandization” or 1945 Austrian neutrality solution for Ukraine?  

The world price of oil awaits the decision of two world Permian-Delaware basin producers to increase production by 200,000 barrels per day. This is half of the increase of Russia-OPEC per month to offset the production decrease in the pandemic.  

The trend is more world oil in supply at current higher prices which opens the way for lower prices as supply meets or overtakes demand once again.  

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Exxon-Mobil and Chevron could revive earlier one million barrels per day planning in the Permian-Delaware to head off prices of over $100 per barrel of oil.  

San Juan Basin producers and lease values should benefit.

Daniel Fine is an expert on energy issues and a longtime columnist for the Farmington Daily Times,