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Oil Awakens China To Its
'Great Power' Responsibilities

Dr. Marwan Al Kabalan
Special To Gulf News.com
9-26-3


After months of near total apathy, China has decided - finally - to abandon its "no comment" diplomacy and join forces with the other powers in the United Nations Security Council (France, Russia and Germany) in a collective effort to put an end to the US occupation of Iraq.
 
Last week, China's foreign minister stated that his country would support a new resolution "provided that the UN is allowed a key role in the reconstruction of Iraq with a clear timetable for a quick transfer of power to the Iraqi people". This statement by China's chief of diplomacy marked the end of two years of almost total indifference towards the situation in the Middle East.
 
Since the September 11, 2001 attacks on the US, China has taken a low profile in the international arena, trying to exploit America's war on terrorism to its own advantage. The September 11 attacks provided an opportunity to ease US pressure on Beijing, which the Bush administration regarded at the beginning as a major challenge to America's global hegemony.
 
In addition, armed with US support, China launched its own war on terrorism. Muslim Uighurs, calling for an independent state in the northwestern province of Xinjiang or "Eastern Turkestan", were heavily suppressed.
 
The Chinese government tried also to present the Uighurs' aspirations for independence as part of a network of "international Islamic terror", with funding from Al Qaida, training in Pakistan-controlled Kashmir and combat experience in Chechnya and Afghanistan.
 
Yet, the US victory in Iraq disturbed China's political agenda and awakened it to the bitter conclusion that the US might now control enough oil to blackmail Beijing over issues of disagreement, such as political reform, Taiwan and North Korea.
 
Throughout the 1970s and 1980s China was isolated from the global economy and, hence, had not been affected by the dramatic events of the world oil market. It had also shown total indifference to the fluctuations of oil prices in the international market because internal prices were fixed through strong state control and domestic supplies were sufficient to satisfy local demands.
 
But, since 1993 China has moved from being self sufficient to a net oil importer. Concerns over oil security are increasingly influencing China's diplomatic and strategic calculations. The quest for oil has taken Beijing as far afield as North Africa and Latin America. Oil demands are also affecting China's attitudes toward US policies from Eurasia to the Middle East to North and West Africa.
 
China's oil consumption has risen from 2.1 million barrels a day (b/d) a decade ago to 4.6 million b/d currently and is expected to increase by between one to three million b/d annually. Energy experts expect China will import about four million b/d in 2010. This growth in oil demand has rendered China as vulnerable as other industrial nations to unexpected events affecting the global oil market.
 
China has started looking for external resources to satisfy its oil requirements. The abundance, proximity and quality of Middle Eastern oil is particularly attractive for China. Hence, in 1997, Beijing singed a deal to develop the Al Ahdab oil field in central Iraq and the following year it began negotiations for the Al Halfayah field. The two Iraqi deals were hindered by the UN sanctions, forcing China to look for other resources.
 
Therefore, in September 1999, it approached Saudi Arabia and struck a deal by which China allowed Saudi companies to use its refinery facilities in return for limited access to Saudi Arabia's oil and gas sector.
 
Not surprisingly, Chinese efforts to develop trading relations with oil producers of the Gulf led to a clash of interests with the US. Since the mid 1990s China realised that US hegemony in the Middle East could be threatening to its national interests and the quest for oil supplies.
 
Hence, it opposed US policies towards Baghdad and Tehran and called for an early lifting of the UN sanctions against Iraq. To counteract Washington's strategy aimed at controlling the Gulf, China used arms sales to forge closer links with the region. Currently, it is considered a prime alternative for Western weaponry by countries attempting to offset Israel's military superiority.
 
For China, these arms sales decrease the deficit from large oil purchases in its balance of payments.
 
The US responded with a carrot and stick approach. Washington stepped up the pressure on Beijing accusing it of tempting oil producers by increased deliveries of weapons of mass destruction and the means to deliver them, something China has categorically denied.
 
On the other hand, the US has tried, unsuccesfully, to bring China to the stockpiling system of the International Energy Agency, a Western oil-consuming club established to counteract the influence of OPEC.
 
Instead, China has chosen to follow an independent policy, preferring to co-operate with the Arab oil-producing countries to secure its oil needs.
 
As China's industrial power base expands, its dependence on foreign oil grows and, subsequently, its policies and interests come more into collision with those of the US.
 
This explains China's discomfort with the US domination of Iraq's oil and also the timing of its decision to speak up against the US occupation in Iraq.
 
http://www.gulfnews.com/Articles/opinion.asp?ArticleID=98641

 

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