Read without ads and support Scribd by becoming a Scribd Premium Reader.

Language:

Download

Go BackAdd Note

Link

Embed

Save for later

China's hunger for oil

André MommenPaper published in Hungarian translation inEszmélet, 80, 2008, pp. 111-120.

China’s appetite for imported hydrocarbons has gained a global dimensionnow that demand for oil is increasing faster than supply. Increasing energyimports are a matter of great concern to both the Chinese government, whichseeks to ensure that China has the energy resources it needs to sustaineconomic growth, and the Western powers worrying about the international political implications of China’s quest for energy security. In this articlesome aspects and issues of China’s industrialization drive will be discussedin connection with the country’s oil diplomacy as an aspect of its increasingintegration into the capitalist globalization process. It must be kept in mindthat the China has officially chosen for

the capitalist road to socialism

. Thischoice is completely in line with the governmental mission of industrializingChina by opening the economy to the world market. In this article someaspects of this capitalist modernization process will be studied, especiallyhow the Chinese rulers are dealing with the energy problem. Especially providing the country with enough oil has become China’s biggestchallenge.

China’s oil consumption

Today, China is the second largest oil consumer, behind the U.S. Itcompetes with the US, Japan, India, and Europe for oil. In recent years,China has been undergoing a process of industrialization and is one of thefastest growing economies in the world. With real gross domestic productgrowing at a rate of 8-10% a year, China's need for energy is projected toincrease by 150 percent by 2020. This makes China extremely vulnerable toany upheaval in the major oil-producing countries in the Near East and Asia.Thus, China’s energy security activities can largely be explained in terms of the Chinese government’s long-standing fear of foreign energy dependency, particularly China’s reliance on energy resources controlled by the UnitedStates. At present, China imports 80 million tons of crude oil a year. Its oilconsumption rises at average by some 7 percent a year. According toforecasts, by 2020 the country's demand for oil could reach 400 million tonsannually. This helps explain recent oil shortages and actual high prices for crude.To sustain its growth China requires increasing amounts of oil. Since it became a net oil importer in 1993, China has traversed the globe in a franticquest for oil to fuel its booming economy. A part of growing Chinese oilconsumption has accelerated mainly because of a large-scale transitiontoward private automobiles. Hence, its oil consumption grows by 7.5% per year, seven times faster than the U.S. Consequently, by year 2010 China isexpected to have 90 times more cars than in 1990. With automobile numbersgrowing at 19% a year, projections show that China could surpass the totalnumber of cars in the U.S. by 2030. Another contributor to the sharpincrease in automobile sales is the very low price of gasoline in China.Chinese gasoline prices now are a third of retail prices in Europe and Japan.China’s ability to provide for its own needs is limited by the fact that its proven oil reserves are small in relation to its consumption. Though during

the 1970s and 1980s China was a net oil exporter, it became a net oilimporter in 1993 and is growingly dependent on foreign oil. China currentlyimports 32% of its oil and is expected to double its need for imported oil between now and 2010. A report by the International Energy Agency predicted that by 2030, Chinese oil imports will equal imports by the U.S.today. China's expectation of growing future dependence on oil imports has brought it to launch an active diplomatic and economic policy in order toacquire interests in exploration and production in countries like Kazakhstan,Russia, Venezuela, Sudan, West Africa, Iran, Saudi Arabia and Canada.Accords with Russia were signed in order to have access to Siberian gas andoil sources and to connect China to the Russian pipeline networks. During avisit in Beijing, Venezuela's president Hugo Chávez signed new agreementsallowing Chinese companies to explore for oil and gas and set up refineriesin Venezuela. He said his country seeks to reduce its dependence on sellingoil to the U.S. and would therefore like to give China greater access toVenezuelan natural resources.But despite all efforts to diversify its sources, China has becomeincreasingly dependent on Middle East oil. Nowadays, 58% of China's oilimports come from this militarily and politically very unstable region.Moreover, by 2015, the share of Middle East oil will stand on 70%. Thoughhistorically China has had no long-standing strategic interests in the MiddleEast, its relationship with the region from where most of its oil comes is becoming increasingly important.

Oil diplomacy

American interests confronted with Chinese increased economic weightafter the latter developing country had joined the World Trade organization.In addition, China has become a major economic player in its region wherethe existing balance of power is altered. Hence, American imperialism triesto contain or slow down China’s rapid expansion by playing the card of China’s poor human rights records, widely spread corruption, or its polluting industries. The West wants the country to curb its carbonemissions. China-bashing goes hand in hand with protectionism disguised asa very noble fury at “coddling dictators”. In addition, U.S.-China relationsare influenced by a wide array of geopolitical issues from Taiwan to Tibet.But undoubtedly access to Middle East oil will become a key issue in therelations between the two powers. But on the other hand, China’s military power is too underdeveloped to have any chance of playing a significantrole in Middle Eastern politics. Its oil interests are thus at the mercy of U.S.military force. Therefore, China has to recognize that its energy security isincreasingly dependent on cooperation with the U.S., rather than competingwith it. But now that China is setting its sights on a new oil domain, theWestern Hemisphere, the U.S. government is reacting more aggressivelythan ever before.Especially China’s pursuit of oil outside of its region has causedconsiderable irritation in Washington especially due to China's decision tosupport rogue regimes, such as Iran and Sudan, just because it depends on