Geo-Political Analysis: China on Oil Buying Spree

feeding the dragonIf you’ve been paying close attention to China, you might have noticed a flurry of oil deals in 2004: Mexico, Russia, Sudan, Iran, Iraq (tenative), Kuwait, Nigeria, Syria, Saudi Arabia, Canada, and recently Venezuela to name a few. Basically, if they have oil in the ground, they are now shipping part of it to China. And many are worrying this may have echoing geo-political reverberations as the US becomes it’s biggest competitor (and is seen as a greater threat to the stability of the MideEast than terrorists). China has been stocking up on it’s reserves, announcing recently that it was building a 90-day strategic reserve. China currently consumes 6.3 million barrels per day. In contrast, the US consumes roughly 20 million bpd and has a strategic reserve at two-months capacity.

Recently, China is showing that it’s becoming a player in the world oil market, specifically through rhetoric at the US and its sheltering of financial-powerhouse and disputed territory, Taiwan. But Taiwan has merely a bit-role in the global game, and may end up being a very benign event if China does indeed decide to lay claim to the island. More disturbing is China’s race to become an economic superpower that would rival, and eventually threaten, the US — and the terrorism it is supporting while it works towards that goal. According to a study by the Institute for the Analysis of Global Security — Fueling the Dragon — China is becoming a defacto threat to US interests and confrontation may escalate sooner rather than later:

China’s relations with state sponsors of terrorism has provided these countries a great deal of money, allowing them to continue to harbor terrorist organizations and to maintain a policy of oppression and exploitation of their people. China’s cooperation with terrorist-sponsoring states has also helped create a group of nations with the capability to produce weapons of mass destruction and the ballistic missiles to deliver them. China is known to be a provider of such technologies to rouge states including North Korea, Iran, Iraq, Syria, Libya and Sudan. China is Iran’s number one supplier of unconventional arms. It negotiated deals to supply Iran with equipment and technology useful for making nuclear, chemical and biological weapons, despite having signed international agreements prohibiting the proliferation of such technologies. This arms trafficking presents an increasing threat to U.S. global security interests, particularly in the Middle East and Asia.

With shady deals like these going on and the lack of interest shown by the Bush administration, it’s clear that the US is less interested in confronting terrorism at its source (as they profess) and is instead playing a dangerous game in oil-rich countries like Iraq, to what ends it seems obvious: strategic oil domination.

Now, I’m not one to start yelling “no blood for oil,” because I realize it’s more complex than a stupid one-liner. But, something is definitely amiss if ignoring China’s arming and supporting of terrorist states (which is a policy of thumbing their nose at our reasoning for the Iraq invasion) is the norm. Certainly this myopic view of China, in conjunction with the enormous trade deficit and reliance on China to continue supporting national debts. At some point in the future, this will turn ugly when China realizes it can financially cripple the US.

Whatever occurs, I can bet it will be increasingly difficult for Bush to continue his “War on Terror” in the face of such blatant assistance by China in their own strategic positioning in the world. It looks as though there’s two divergent ideologies that will eventually clash. China’s willingness to trade with any country it can and support terrorists so long as oil flows constantly, and the US’s hope to promote democracy towards those same ends. It seems that at this juncture, China has chosen the strategy that pays quite lucratively in the short-term, and may be better positioned to force our hand on the issue as well.

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