Robert M. Cutler on Energy and Eurasia

In mid-June, I wrote that "if and when construction begins on Baku-Ceyhan, it will be due to a major shift in a variable whose immutability everyone now takes for granted." Construction has not yet begun, but such a variable has shifted. That variable is the attitude of BP-Amoco, the largest shareholder in the Azerbaijan International Operating Company (AIOC), which on October 19 stated that "the Baku-Ceyhan pipeline is a strategic transportation route that should be built."

It is difficult to say what any new administration's policy will be by the end of the president's term of office. However, there are some clear indications of the broad outlines of U.S. policy toward Russia under the Bush administration as it prepares to take office. This policy will not seek to present a cooperative image of the relationship, as has been so under the outgoing administration. Instead it will have a more overtly "realist" or "realpolitik" approach and will concentrate in the first instance upon European security and controlling arms proliferation.

Just as people who study oil prices look too much at the New York and London spot price, those who study gold prices look too much at the New York spot price and the twice-daily London fixes. Wednesday's phenomenal rise in the price of gold in New York was presaged in Asia. The day before, the spot price rose US$20 in Asian markets as investors dumping stocks began to shift to gold as a safe haven.

Hyped by its backers as the last thing preventing the entire United States economy from sinking into a black hole of immeasurable depth and torment, US Treasury Secretary Henry Paulson's multi-billion dollar financial rescue bill was passed by the Senate on Wednesday evening - and those Asian markets that were open barely blinked.

The agreement announced late last month between Russia and China for construction of a pipeline branch to China from the East Siberia-Pacific Ocean (ESPO) oil pipeline is only one aspect of a relatively new strategic policy direction from Beijing to acquire foreign assets during the ongoing global economic downturn.

In mid-February, Russia and China signed an agreement providing for Chinese agencies to lend US$25 billion to the Russian energy trusts Transneft and Rosneft in return for the construction of a branch from the East Siberia-Pacific Ocean (ESPO) oil pipeline from Skorovodino to the Chinese border and the guaranteed supply of significant amounts of oil over the long term. In the wake of the breakdown of American efforts to build its tactical cooperation with the Central Asian states over Afghanistan and the “global war on terror” into a broader strategic vision, the ESPO accord agreement signifies a reestablishment of the ability of China and Russia to cooperate together on geo-economic questions even within the context of their competition for influence in Central Asia.

В середине февраля Россия и Китай подписали соглашение, по которому китайские кредитные учреждения выдадут заем в 25 млрд. долларов российским энергетическим компаниям 'Транснефть' и 'Роснефть' в обмен на строительство ответвления нефтепровода 'Восточная Сибирь - Тихий океан' от Сковородино до китайской границы и гарантированные долгосрочные поставки значительных объемов нефти. После провала усилий США во встраиванию тактического сотрудничества с государствами Центральной Азии по вопросу Афганистана в более широкое стратегическое видение, соглашение о ВСТО означает, что Китай и Россия вновь способны вести сотрудничество по геоэкономическим вопросам даже в контексте своего соперничества за влияние в Центральной Азии.

The Taiwan presidential election victory of opposition Nationalist Party (KMT) candidate Ma Ying-jeou a year ago was expected to bring an upsurge in trade with the mainland resulting from increased economic integration across the strait - that was one of the winner's campaign promises.

The turn for the better in Taiwan's dealings with mainland China, resulting in improved access for businessmen and tourists across the Taiwan Strait and eased investment rules, could hardly have come at a better time for the island as its export-dependent economy reels from the global downturn. Stimulus efforts by the governments in both Beijing and Taipei are also helping to lift the prospects for economic growth after a dismal few quarters.

Negative, even tragic, events have dominated recent news from the Korean Peninsula, yet the resilience of the South Korean economy, aided by government stimulus packages, has helped the equity markets to shrug off personal tragedy and war threats alike.

The South Korean economy continues to show its ability to bounce back rapidly from crisis, this time due mainly to the combined impact of a domestic stimulus and restocking of global inventories.

[Thai translation of South Korea shows recovery skills.]
เศรษฐกิจเกาหลีใต้กำลังควบตะบึงเข้าสู่ภาวะฟื้นตัว เมื่อบรรดาผู้บริโภคของประเทศพากันใช้ประโยชน์จากแพกเกจมาตรการกระตุ้น เศรษฐกิจกันอย่างเต็มที่ ขณะเดียวกัน ผลิตภัณฑ์จากโรงงานของโสมขาวก็สามารถขายได้เพิ่มขึ้นมาก ด้วยความช่วยเหลือจากการที่ทั่วโลกพากันสต็อกสินค้าคงคลังกันอีกคำรบหนึ่ง

The South Korean economy, which last year scraped through the global slowdown without sinking into recession, returned to the recovery path last month after faltering in January, Finance Minister Yoon Jeung-hyun said on Friday, backed by a report that attributed earlier negative data to one-off factors such as heavy snow and an end to tax incentives for car purchases.

South Korea's recovery from the crisis of 2007-08 was impressive in its speed, but the country's Finance Ministry this month acknowledges that the economy still faces "downside risks" because of a possible slowdown in the economies of its principal trading partners. Consumer prices rose 2.6% in July over July 2009, within the government's target range, and industrial output was up 16.9% year-on-year, after a revised 21.7% increase in May, according to the national statistics office.

A "golden decade" lies ahead for Taiwan equities, according to CLSA Asia-Pacific Markets in a report published a day after the island's parliament approved an historic trade agreement with the mainland.