Page 12 - NorthAmOil Week 33

NorthAmOil COMMENTARY NorthAmOil

that Chinese purchases of US crude in the year Chief Executive Carrie Lam and 10 other sen-
to June 30 only amounted to $2.06bn. Mean- ior officials from both the city and mainland.
while, S&P Global Market Intelligence unit Pan- China has since responded with sanctions of its
jiva has estimated that China’s energy purchases own on 11 US citizens, including a number of
from the US in the first half totalled $2.9bn. legislators.
A review of the Phase 1 deal had initially been Following Washington’s round of sanctions
scheduled for August 15, but was postponed China was keen to note that it remained com-
owing to timetabling issues. No new date for the mitted to fulfilling its obligations under the
review has been set as yet, but the delay gives Phase 1 deal. People’s Bank of China governor
China more time to scale up its purchases of US Yi Gang said on August 9 that deteriorating
energy. bilateral relations would not stand in the way of
However, even if this happens, and the US is Beijing’s promises.
understanding about the setbacks China suf- “No matter how the international situation
fered as a result of COVID-19, other causes of changes, the most important thing is to get our
tension between the two countries could end up own things done and to firmly deepen financial
derailing the deal. reform and opening-up,” the official Xinhua
newswire quoted Yi as saying on August 9. “First
Political tensions of all, we will continue to implement the Phase 1
The two countries’ disagreement over trade has trade deal with the US.”
deteriorated over the last two years into a more Tensions, however, only show signs of ramp-
generalised geopolitical tug of war. China and ing up further, now that the US has announced
the US now find themselves increasingly at log- that a major new arms deal with Taiwan has
gerheads over sovereignty issues such as Hong been given the green light.
Kong, Taiwan and the South China Sea. The United States Defense Department China and the
The mainland government’s introduction of announced on August 14 that the US Air Force
Hong Kong’s national security law on June 30 would award a contract for 90 F-16 fighter jets US now find
sparked outrage in the US, with Washington to Lockheed Martin as part of US foreign mili- themselves
condemning the move as severely undermining tary sales. Of that figure, 66 will head to Taiwan
the city’s autonomy as set out in the handover under a deal first unveiled last year. increasingly at
agreement China signed with the UK in 1984. The announcement of the deal’s closing came
That agreement enshrined the concept of “One hot on the heels of US Health and Human Ser- loggerheads
Country, Two Systems”, which guaranteed Hong vice Secretary Alex Azar’s visit to the island.
Kong certain rights and freedoms for 50 years. Azar’s trip made waves with Beijing, as he was over sovereignty
Beijing’s newly implemented national secu- the highest-ranking US official to have visited issues.
rity law introduces severe punishments for Taiwan in the last four decades. China promptly
crimes of secession, subversion, terrorism and began military exercises around the median
collusion with foreign forces. Critics note that point in the Taiwan Strait, with fighter jets of its
the legislation effectively eliminates free speech, own even crossing the line.
while also granting powers to the police without If Sino-US tensions continue to rise, especially
the need for judicial oversight. in the run-up to the US presidential elections
Accordingly, US President Donald Trump this year, China may lose interest in honouring
signed on July 14 the Hong Kong Autonomy all aspects of the trade deal. The commercial
Act that targets individuals Washington believes and political realities of significantly ramping
have undermined the city’s autonomy. This has up purchases of US crude may prove too much
led the US to impose sanctions on Hong Kong for Beijing to swallow.™

P12 www. NEWSBASE .com Week 33 20•August•2020