Friday, November 2, 2007

The US-Chinese Energy Battle: And Avoiding a World War

Research and Factors
-China is the second largest consumer of oil, just behind the United States.
-Chinas growth rate is the highest on earth and in the past decade has increased 7 fold.
-China imports half of its oil and in 3 years the figure will be 2/3.
-Chinese reserves are dwindling and if they are unable to meet this rising need for energy their economy will come to a grinding halt.
-China must find and secure new sources for oil in an increasingly unstable world.
-This has already begun to cause friction between the United States and rising economic power China. The Unites States has enjoyed dominance in the energy market for decades and cannot afford economically loose or fail to obtain new energy markets and to continue growth.
-Beijing, April 2007 the Chinese hosted the 8th technology of energy expo which all major companies in the field where in attendance. Thirty Thousand visitors from 42 separate nations from all over the world where in attendance. They included companies ranging from offshore drilling, pipelines, and next generation supertankers.
-China is now forging alliances with Sudan and Iran
-China currently cannot supply the demand for itself. This is a key reason for the need of new energy markets; markets that The United States have traditionally dominated.
-In the late 80’s there were three companies; In effect an arm of the state that were set up to give China the financial clout to be able to compete in the international oil market. They are China National Offshore Oil Corporation (CNOOC), China Pretrial Chemical Corporation, and China National Petroleum Corporation.

Problems That China creates in the African Continent

-China is interested in energy sources all around the world but primarily Africa which accounts for 10% of the world’s oil production. Africa is also where the most recent oil reserve finds have occurred.
-Chinese businesses are very active in the continent of Africa and use their rapid economic growth to entice African leaders by saying not only they would receive not just an oil contract, but they would also build infrastructure such as telecommunication systems, railway systems, and even ports. This is something that companies like BP or TOTAL oil cannot do. This has allowed China to dominate the African continent because they can play by an entire separate set of rules. Their nationalized oil corporations that are part of the Chinese government can offer and provide more of an enticing economic offers to developing African nations than private corporations can.
-in 2003 Chad joined the oil producers club, and with the rising price of oil they have enjoyed a financial windfall , generating nearly 1 billion in revenue in the year 2005 alone, yet their people remain some of the poorest people on earth. Assortments of western oil companies, mostly American extract most of Chad’s subterranean oil but that is starting to change. China’s recently signed oil contracts with Chad include the familiar bonus of major projects road construction. But they also include some new bonus that the west cannot provide and that is total guarantee of non interference in political matters. Western companies that are set up through the World Bank must follow certain guidelines such as respect for transparency and democracy or using oil revenue to alleviate poverty.
-this is an example of the problems the west have face with this competition of the Chinese. Africans view the terms the west insists with their contracts as borderline abusive. They view it as in their better interest to side with China and their nationalized oil corporations because they will not interfere in their internal political affairs and the west will demand certain terms of transparency and human rights when they also actively or passively support many dictatorships and rouge states around the world. This presents the image that the west will use African contacts to promote western imperialism in the continent which Africans are all but thrilled of the idea of being under western imperialism again.
-Western corporations are not only loosing every new African contracts signed but are now loosing ones they traditionally occupied. This is a major threat to primarily the United States but also her European and democratic allies.
-This new Chinese influence all over the entire world could also make the communist Chinese governments system more appealing than the capitalistic United States and democratic system less appealing. The capitalist way of doing business has done nothing to improve the conditions of African nations or the people that live in them. China builds schools and water towers and infrastructure and is rapidly winning favor with African governments and people alike.

Problems That China causes in Latin America

-Due to tensions in the Middle East China has now aggressively pursued another other oil rich region, South America.
-This being in the United States hemisphere of influence it is ratcheted up tensions between China and the United States.
-another event in April 2007 was the first South American energy summit .Delegates met on an remote island off the coast of Venezuela. They discussed further cooperation with South American nations and also, pushed by Venezuela to end their dependence on the region’s major buyer of oil, the United States.
-High gas prices have sprung new technologies to be able to tap into even the most remote oil deposits such as heavy oil. Venezuela has the world’s largest reserve in heavy oil. China recently has acquired large sums of contracts with Venezuela.
-Washington is very unhappy with the problem China is creating for the United States.

The Strategic Foreign Policy for the Chinese Quetion

-China has something no other Asian country has, and that is veto power in the UN Security Council. China views the US will always be in the way of China and has now made alliances with nations hostile to the US. It is also in the interest of a nation like Iran to woo china and they view their relationship with china a key opportunity into getting some of their own initiatives accomplished that otherwise they would not be able to accomplish.
-NATO which was established during the cold war is also viewed as a threat to china expansion. With the push from American’s to build a missile defense system in NATO ally Poland has re enforced tensions with former cold war foe Russia and began a 21st century cold war with China.
- The strategy the United States is taking to contain communist china’s increasing influence is encirclement and strong military presence in Eastern Europe, the Middle East, and Asia but primarily the ex Chinese province, the island of Taiwan. Efforts by the US intelligence agencies and military strategy requires the continued alliance with Taiwan and have naval access to the Taiwan Strait.
-Taiwan is more than just a political bargaining chip; it is the Achilles heel of china. Most of Chinas imported oil comes through the Taiwan Strait and in a time of crisis would be at the mercy of the superior American navy.
To overthrow governments that do not want to cooperate with US economic interests is seen as acts of national defense. These actions were successful in containment and ultimately collapse the Soviet Union. The new communist threat of China will inadvertently inherited relationships with past countries and regimes that dealt with the USSR instead of western powers due to their equal dislike of American and western political ideology.
-The best hope for the United States to maintain its economic and military dominance in the 21st century they must use the global market as an enemy to the communist state of China and encourage publicly reforms on human rights and especially environmental Issues. They must capitalize on internal tensions within china such as the situation in Burma and Taiwan. If power players in China are exposed to the future and economic possibilities of capitalism and the global free market then a quicker transition into a democracy and free and transparent society can emerge.
-This will cause the world’s last and only influential communist state to collapse and reform. It will also spark a chain reaction of reform in the world of governments not sympathetic to capitalism, democracy, transparency, and human rights and freedoms such as Iran, North Korea, Syria, Venezuela, and will spark desperately needed reform of nations in the African continent. It will also freeze any growing interest of the communist reinstitution in Russia on the Chinese model.
-There is increasing interest in political reform in China and it’s buffer to American power in the Middle East, Iran and for more capitalistic forms of doing business. China is still new to the global market and has not been players in it for very long. If the US opens more of its markets and creates incentive and uses its intelligence agencies to fund and indoctrinate a grassroots effort to the Chinese people to push for democracy.
-Even though the Afghan and Iraq wars have set back the United States in several areas needed for leverage against China, the actions where a lesser of two evils. If the United States didn’t act fast it stood the chance of losing the Middle East to Chinese companies and CNOOC such as what had been happening in Latin America and Africa the past couple of decades. This would mean the destruction of the American economy and influence in the world.
-The war’s also reminded the east that the United States is powerful and is not going away. For the past two decades the west had been losing energy supplies rapidly to rising China and needed to solidify the middle east, Latin American, and African oil reserves and sources of energy. The only problem was until 9/11 the United States could not convince the American people of an invasion and occupation for economic and political reform to be sympathetic to the west.
-Terrorism has given the west the cover for political and economical reforms they have wanted and needed for self preservation to implement.
-Most Middle Eastern governments rely heavily on the United States financially as the United States does them for their energy. There were only two proponents that gave Middle Eastern oil exclusively to the west; Iraq and Iran and Afghanistan. Iraq and Iran are major crude oil markets and Afghanistan is one of the major natural gas reserves. The US chose Iraq because they feared Iraq and Iran both in Chinese hands would drastically shift the balance of power and ultimately force the United States out of their strategic and military power positions it currently has around the world. It also believed Iran was manageable and moderate and it would be feasible for political reform using intelligence agencies to influence a political coup. In Saddam’s regime in Iraq, several attempts of overthrowing their government had failed and the clock was ticking.
-The attacks on September 11th were allowed on the grounds that it would be similar to the attacks in 93 and would be a car bomb or would be a high jacking of airplanes. The administration was shocked at the attacks they drastically underestimated the human loss and economic impact. Though tragic it is seen as a sacrifice for the good of the entire nation. The US would never been able to sell the idea of attacking a sovereign country and occupying it for political and economic reform unless the people where behind them. The European allies could not put boots on the ground because they had no event to justify it. The US lost European support with the invasion of Iraq because they favored continuing intelligence coos and they feared it would cause so much instability in the region oil production would shut down and drive oil prices sky high. But America was at a point where they needed to preserve their dominance and future by acting now while they had the American people behind the idea.
-The overall goal of the United States MUST put every effort it has into becoming energy independent. This will allow us to avoid costly and politically damaging wars.
-It will also allow America to avoid and military action in the future with China and the east that could provoke a nuclear world war.
-Finally transitioning China into a democracy that is economic partners with the United States and not competitors will create a global revolution of democracy and freedoms that the communist powers with veto power in the UN have been blocking for years.
-Once the world is only left with democracy and free markets and their governments are an elected body, then every region of the world will be able to form trade unions and treaties that would make wars political and economical suicide.

This must be realized by American leaders and will take dramatic and informed decisions. America is at a turning point and in crisis due to decisions this current administration. America is in need of leadership now more than ever. America is in need of a leader.