Posted on 11/19/2004 7:34:07 PM PST by demlosers
China's insatiable demand for energy is prompting fears of financial and diplomatic collisions around the globe as it seeks reliable supplies of oil from as far away as Brazil and Sudan.
An intrusion into Japanese territorial waters by a Chinese nuclear submarine last week and a trade deal with Brazil are the latest apparently unconnected consequences of China's soaring economic growth.
The connection, however, lies in an order issued last year by President Hu Jintao to seek secure oil supplies abroad – preferably ones which could not be stopped by America in case of conflict over Taiwan.
The submarine incident was put down to a "technical error" by the Chinese government, which apologised to Japan.
But even before the incident the People's Daily, the government mouthpiece, had commented that competition over the East China Sea between the two countries was "only a prelude of the game between China and Japan in the arena of international energy".
The Brazil trade deal included funding for a joint oil-drilling and pipeline programme at a cost that experts said would add up to three times the cost of simply buying oil on the market.
The West, however, has paid little attention to these developments. For the United States and Europe are far more concerned with the even more sensitive issues of China's relations with "pariah states".
In September, China threatened to veto any move to impose sanctions on Sudan over the atrocities in Darfur. It has invested $3 billion in the African country's oil industry, which supplies it with seven per cent of its needs.
Then, this month, it said that it opposed moves to refer Iran's nuclear stand-off with the International Atomic Energy Agency to the United Nations Security Council.
A week before, China's second biggest state oil firm had signed a $70 billion deal for oilfield and natural gas development with Iran, which already supplies 13 per cent of China's needs.
China has its own reserves of oil and natural gas and once was a net oil exporter. But as its economy has expanded by an average of nine per cent per year for the last two decades, so has its demand for energy.
This year it overtook Japan as the world's second largest consumer of energy, behind the US.
Its projected demand, boosted by a huge rise in car ownership as well as the need to find alternatives to polluting coal for electricity generation, has contributed to the surge in the price of oil this year. Shortages are already leading to power cuts in the big cities.
Since President Hu ordered state-owned oil firms to "go abroad" to ensure supply, they have begun drilling for gas in the East China Sea, just west of the line that Japan regards as its border.
Japan protested, to no avail, that the project should be a joint one.
The two are also set to clash over Russia's oil wealth. China is furious that Japan has outbid it in their battle to determine the route of the pipeline that Russia intends to build to the Far East.
Japan favoured a route to the sea, enabling oil to be shipped to both Japan and China. China wanted an overland route through its own territory, which would give it ultimate control if hostilities broke out.
Increasingly, analysts are saying that China's efforts have gone beyond what is safe or even in its own interests.
Claude Mandil, the executive director of the International Energy Agency in Paris, said the reserves in the East China Sea were hardly worth the trouble.
"Nobody thinks that there will be a lot of oil and gas in this part of the world," he said.
"It may be a difficult political issue but I don't think the energy content is worthwhile."
Eurasia Group, a New York-based firm of political analysts, said its oil experts worked out that China was paying such an inflated price for its investment in Brazil that the cost for the oil it ended up with was three times the market price.
"If China's economy falters, which, in my view, appears increasingly likely, then commodity prices will plummet, and with them, the value of the assets that produce them," Jason Kindopp, Eurasia's lead China analyst, said.
"Beijing may end up in a early 1990s Japan situation, where it is forced to sell recently purchased overseas assets for a fraction of what it paid for them."
China's wider aggression to secure oil and gas was the greatest threat to its international standing in the next decade.
"Sudan is the primary example," he said.
"It marks the first time in recent years that China has promised to wield its veto power in the UN Security Council against a petition initiated by the United States and backed by France and Great Britain."
Regardless of which way Russia turns they will lose. Trying to pacify an 800 lb gorilla living next door is fruitless. They are in a hopeless position.
So all the millions of Chinese entrepreneurs are really doing their hard work just to give it all away to the state for a military buildup? Sounds like Marxist propaganda against America.
The Chinese are not some gigantic hive mind plotting to take over world. Like most people, they are individuals just wanting to improve their lives. The free market is the best tool for that, as they have realized.
It's only a matter of time before we are at war with the Chinese.
Yes they are great. Before people go jumping all over Wal-Mart be reminded of the constraints placed on them from government oppression. It's not their fault that it's cheaper to make a pair of jeans in Beijing. If American businesses could throw off the yoke of over-regulation and wasted revenue to prepare their taxes, then perhaps we could make some cheaper products in America. The minimum wage, OSHA, EPA, and the IRS are the problem.
And despite all this Wal-Mart continues to be a shining example of what we can do with limited freedoms. Wal-Mart fights the war the best they can to live up to their customer's expectations.
We are creating another superpower with no morals
I think on purpose...
There is a lot of speculation as to what the Chinese will do with all of the US Treasury bills, etc., that they have invested in. I've been wondering if they might not take a page from the US war with Mexico and seize Siberia, then pay off the Russians for what they took.
Nuclear solves the energy problem. Put the plants on the ocean and hook them up to desalination plants and you solve the water problem. So simple.
Replacing us in every way.
See also the aricle today: "Chinese replacing mafia in New York City"
There are so many ponderables as to what may transpire in the next few years with China and Russia. Will it all end happily and peacefully???? To believe that is to refute history of man.
They better be careful. Being a racially homegenious society makes them very vulernable to ethnic-based Nano-weapons. If we ever came to the brink of nuclear war, we could simply launch such weapons by the millions over China to kill every ethnic Chinese person in any geographical area we wish. Their weapons would have a much harder time distinguishing ethnicities if launched here. This will be a huge benefit of our diversity in the future.
Great idea-incorporating our world energy generation, right in with the purification of the world's water supply.
What indeed could be simpler?
Shall we relax with our favorite brew and a huge barf bag, as the nay sayers commence enlighten us?
Why not ?, if the French can safely draw 80% of their power via nukes, why not us.
I'm sure the Chinese were as disappointed as the Democrats about the election. They made huge gains due to Carter's cluelessness and were more than willing to buy nuclear and computer technology from the corrupt Clinton administration.
Unn, I think most of the people on this board would agree with us.
I read last week that China has plans to build 30 nuke plants in the next few years to meet the demand for electicity.
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