China's increasing need for imported energy has given it an
incentive to become closer to Iran.
China With 1.3 billion people, the People's Republic of China is the
world's most populous country and the second largest oil consumer, behind
the U.S. In recent years, China has been undergoing a process of
industrialization and is one of the fastest growing economies in the world.
With real gross domestic product growing at a rate of 8-10% a year, China's
need for energy is projected to increase by 150 percent by 2020. to sustain
its growth China requires increasing amounts of oil. Its oil consumption
grows by 7.5% per year, seven times faster than the U.S.'
Growth in Chinese oil consumption has accelerated
mainly because of a large-scale transition away from bicycles and mass
transit toward private automobiles, more affordable since China's admission
to the World Trade Organization. Consequently, by year 2010 China is
expected to have 90 times more cars than in 1990. With automobile numbers
growing at 19% a year, projections show that China could surpass the total
number of cars in the U.S. by 2030. Another contributor to the sharp
increase in automobile sales is the very low price of gasoline in China.
Chinese gasoline prices now
the lowest in the world for oil-importing countries, and are a third of
retail prices in Europe and Japan, where steep taxes are imposed to
discourage gasoline use.
Where will China
get its oil? China’s ability to provide for its own needs is
limited by the fact that its proven oil reserves are small in relation to
During the 1970s and 1980s China was a net oil exporter, it became a net oil
importer in 1993 and is growingly dependent on foreign oil. China currently
imports 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.
expectation of growing future dependence on oil imports has brought it to
acquire interests in exploration and production in places like Kazakhstan,
Russia, Venezuela, Sudan, West Africa, Iran, Saudi Arabia and Canada. But
despite its efforts to diversify its sources, China has become increasingly
dependent on Middle East oil. Today, 58% of China's oil imports come from
the region. By 2015, the share of Middle East oil will stand on 70%.
relations China-U.S. relations are influenced by a wide
array of issues from Taiwan to trade relations and human rights. But
undoubtedly access to Middle East oil will become a key issue in the
relations between the two powers.
But China-U.S.inclination is balanced by the feeling
among many Chinese leaders that the U.S. seeks to dominate the Persian Gulf
in order to exercise control over its energy resources and that it tries to
contain China's aspirations in the region. The U.S. is therefore considered
a major threat to China's long-term energy security.
China and Middle East Although China is banking on oil development
projects outside the Middle East, Beijing most likely will insist on
nurturing its relations with the main oil-producing states in that region as
an insurance policy. But its attempts to gain a foothold in the Middle East
and build up a long-term strategic links with countries sensitive to the
U.S. could also bear heavily on U.S.-China relations. Especially troubling
are China's arms sales to the region, its support of Iran and its
proliferation of dual use technology. U.S. Congress'
warning! A report by the China-U.S. Security Review
Commission, a group created by Congress, warned that China's increasing need
for imported energy has given it an incentive to become closer to countries
"A key driver in China's relations
with Middle-East governments is its dependence on foreign oil to fuel
its economic development. This dependency is expected to increase over
the coming decade."
China's relations with such countries has
provided these countries a great deal of money, allowing them to continue to
grow their economics and to maintain their policy.
China and Iran China is the number one oil and gas importer from
Iran. The two countries are bound by energy deals reaching a total value of
$120 billion and growing. While the U.S. and EU were forging a diplomatic
strategy to halt Iran’s nuclear program, China signed in October 2004 its
largest energy deal with Iran ever and promised to block any American
attempt to refer Iran’s nuclear program to the UN Security Council. This may
indicate not only that China is interested in a militarily strong, even
nuclear Iran that dominates the Gulf but also that for China, energy
security considerations trump international cooperation on critical global
China also provides conventional weapons that
could threaten U.S. military forces securing the Persian Gulf and specially
Hormuz strait. Of particular concern are China's sales to Iran of anti-ship
cruise missiles, which pose a threat to oil tanker traffic and American
naval vessels operating there. This arms trafficking presents an increasing
threat to U.S. global security interests, particularly in the Middle East
China and Hispanics In the Western Hemisphere China concluded oil and
gas deals with Argentina, Brazil, Peru, and Ecuador. But its main country of
interest is Venezuela, U.S.' fourth largest oil supplier. A series of oil
agreements signed in early 2005 allow Chinese companies to explore for oil
and gas and set up refineries in Venezuela. Chinese state-owned oil
companies have also begun seeking ambitious oil deals in Canada, the top
petroleum supplier to the U.S. China’s continued penetration into the
Western Hemisphere could have profound economic and political implications
for the U.S. Considering the fact that both U.S.’ and Mexico’s domestic
crude production are falling, the U.S. cannot afford to lose chunks of the
crude produced by the two countries that together supply a third of its oil
imports. With less oil available to the American market the U.S. will be
forced to seek this oil elsewhere, primarily in the Middle East, hence
becoming more dependent on this tumultuous region.