Biden says U.S. will defend Taiwan; Iran, Venezuela to deepen their alliance
The tension between autocracy and democracy.
U.S. President Joe Biden had a busy long weekend. He started his first trip to Asia as president last Friday. The goal? To reassure allies and partners in the region and above all counter an increasingly aggressive China. Following an initial stop in South Korea, Biden, while visiting Japan on Monday, made a surprising claim that got China watchers talking for days. - Lu
The scene: At a Tokyo news conference held by Biden and Japan’s new prime minister, Fumio Kishida, a reporter asked Biden: “Are you willing to get involved militarily to defend Taiwan if it comes to that?”
Biden: “Yes.” (very quickly)
Reporter: “You are?”
Biden: “That’s the commitment we made.”
What’s the BFD? Biden is the first president since George W. Bush to make a defend-Taiwan commitment. By making a clear statement confirming the possibility of military intervention, Biden moved away from a longstanding U.S. policy of “strategic ambiguity” when it comes to Taiwan. Under that policy, the U.S. government acknowledges that Beijing considers Taipei as part of "one China." (Yes, it’s that ambiguous) Although Biden and the White House did say that the U.S. stance on the one China policy has not changed, the president has repeatedly stated in recent months the U.S. would defend Taiwan if China attacked.
Why does the Chinese Communist Party have to take back Taiwan? If you ask a CCP supporter why the autocratic regime has to take back the island, I’m sure they will give you a long speech on how for hundreds of years, Taiwan had been part of a Chinese dynasty and that gives them the right to take back what should’ve been theirs a long time ago. Well, they are right in that the answer lies in our history. Just not that part of the history. The CCP hasn’t always been the ruling political party of China. In fact, till 1949, the country was under the leadership of the Chinese Nationalist Party (CNP). The CNP bore the brunt of the war when the Japanese invaded China during World War II. Although they repelled the Japanese, they lost the following civil war to the CCP and retreated to Taiwan in 1949. That left mainland China under the ruling of the communist party ever since. So the existence of Taiwan, a democratic regime built by and for Chinese people, is a living reminder that challenges the legitimacy of the communist party and therefore has to be eliminated.
Of course there’s more to the answer than that but the full answer is probably too long to include in this short newsletter. (Don’t worry we will do a podcast on this next week.) But one thing is clear, the need to fold Taiwan under China is at the CCP’s core mission as a political party.
Will there be a war? To be clear, every Chinese president has been affirmative about the reunion with Taiwan as they call it. Current President Xi Jinping, however, has been more outspoken about going to war to achieve that goal. Moreover, China has been ramping up their military power including launching a modern battlefield test in western China. Here’s a really cool visualisation from Reuters that examines some of the war scenarios. It is based on interviews with close to a dozen military strategists and 15 current and former military officers from Taiwan, the United States, Australia and Japan.
Oil is always at the centre of geopolitical strife.The most talked-about example in the past few weeks is the west’s attempt to embargo Russian fuel following its war on Ukraine. Most recently, the European Commission put forward a proposal in early May to phase out then “completely ban” Russian oil imports.
Discussions on the ban have stalled several times due to certain members’ heavy reliance on the Kremlin’s fuel. Talks were expected to come to a conclusion at the European Council summit planned for next week. But European Commission President Ursula von der Leyen’s expectations flip-flopped a few days ahead of the summit when she told Politico she does not expect an agreement to be reached. If the ban moves forward, it will further isolate Russia, following bans from the U.S., the U.K., and Canada.
Outside the shifting fuel geopolitics in Europe, oil is making another appearance in this week’s headlines —albeit possibly not as exciting as an embargo. Energy deals are catalyzing a strong partnership between Iran and Venezuela. The countries have been financially and diplomatically isolated from the world for years as a result of U.S. sanctions.
-Nebal
Iran and Venezuela are expected to deepen their alliance in the face of U.S. sanctions
The details: Iran is preparing to revamp Venezuela’s largest oil refinery. The state-run National Iranian Oil Refining and Distribution Company has started negotiations with Venezuela to revamp its 955,000-barrel-per-day Paraguana Refining Centre.
The centre, which is among the world’s largest, operated at just 17 per cent of capacity in April.
So what? It’s just a refinery. Well, there’s more to it than that. Venezuela’s once booming petroleum industry has been plagued for years with mismanagement, problems with maintenance and later U.S. sanctions. The country has been battling fuel shortages and a crippling economic crisis.
Iran might be Venezuela’s knight in shining armour. The two states have had a diplomatic and commercial relationship for decades—one that was much stronger during the Chávez presidency than it is today. This relationship resulted in hundreds of agreements but very little accomplishments and eventually cooled down after Chávez died in 2013.
However, the two states appeared to be strengthening their ties in 2020 when Iran made headlines for shipping multiple fuel tankers to its South American ally in defiance of U.S. sanctions. Venezuela and Iran reportedly took their cooperation one step further by signing an oil-swap deal in September 2021 allowing Venezuela to exchange its heavy crude for Iranian condensate. Venezuela could mix the condensate with its extra-heavy oil to produce diluted crude oil, a grade demanded by Asian refiners.
Venezuela was able to almost double its oil output in 2021 — in part thanks to Iran’s help.
Earlier this month, the Iranian oil company signed a $116 million contract with Venezuelan state oil firm PDVSA to repair and expand a smaller refinery called El Palito in Venezuela’s central region. Iran also provided Venezuela with engineers and spare parts for its oil industry.
This partnership is suspected to go beyond oil. Venezuela President Nicolas Maduro said in 2020 that it would be a “good idea” to look into buying missiles from the middle eastern state. In February, Israel accused Iran of planning to arm drones supplied to Venezuela with precision-guided munitions. Iran denies supplying military drones to any of its allies.
The big picture:
On the other side of the world, Iran has forged alliances with other formidable U.S. adversaries: Russia and China.
The three states have reportedly been carrying out annual joint naval drills since 2019.
China is also the largest market for sanctioned Venezuelan and Iranian crude oil. However, China’s motivation in purchasing Iran’s sanctioned oil likely has as much to do with an economic need as it does its geopolitical objective of undermining U.S. sanctions and economic dominance, analysts say.
In the long run, cooperation between Iran and its allies, including China, could weaken the United State’s ability to shape their behaviour through sanctions.
We’re beginning to see how these partnerships could grow even further in defiance of the west. As Moscow challenges western sanctions over its military operation in Ukraine, Russia and Iran have discussed swapping supplies for oil and gas as well as setting up a logistics hub, Russian Deputy Prime Minister Alexander Novak said on Wednesday.
What to look out for: President Nicolas Maduro will visit Tehran “very soon” to finalize a 20-year cooperation agreement with Iran, he told the media late last year.
Tehran is also aiming to formalize strategic partnerships with China and Russia.