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China and its insatiable thirst for energy and natural resources

China and its insatiable thirst for energy and natural resources

It is unquestionable that we are living some of the most challenging times in recent history. #Climate change, with its impact on natural phenomena across the globe. Second and more devastating aggression by the Russian Federation against its Ukrainian neighbor is a source of serious concern to every political and business leader. The massive #sanctions by the E.U., US, and their allies against Putin’s regime have resulted in the Russian Federation’s retaliatory weaponization of #energy supply, thereafter triggering an unprecedented energy and food crisis and global skyrocket inflation that is impacting everyone across the globe.  Clearly, a crisis that could have been avoided if only goodwill and dialogue had prevailed. Russian gross miscalculation of Ukrainian resistance and the unexpected E.U. cohesion reaction were among the leading causes of the current crisis. In hindsight, much could be said and done but the true question is how we get ourselves out of this man-made disaster and most of all how can we prevent this from further spreading to other regions like the #South China Sea?

While political leaders in the West try to contain the confrontation with Russia over its invasion of Ukraine and business leaders try to cope with soaring energy costs that put their business at peril, strategies are hard at work to evaluate future risks and opportunities that could arise from Moscow allied in Asia.

#Think tanks and strategy experts around the world are at work to assess what could be China’s next move, in its drive to appease its everlasting thirst for energy and natural resource, and define nonconflictual strategies to address China’s expansionism.

Since 1983 China became a net importer of oil. At that time, it was stated that “Though China’s energy mix will continue to be based on coal, with oil accounting for only about 20-25% of its overall primary energy consumption, the supply of this strategic fuel will remain of critical importance to China’s security” (1)

In an article written by Sergei Troush in 1999, he quoted that in 1997, only four years after the PRC reached the status of oil importer, Li Peng, who was himself an energy expert, there was a need to promote a shift in the government’s approach. Li Peng pointed out in his writing that “as the economy develops and people’s living standard rises, demand for oil and gas is certain to increase by large margins. While striving to develop our own crude oil and natural gas resources, we have to use some foreign resources.”

Those words were indeed visionary. Early estimation pointed out that in 2010 China’s oil dependence would have reached 45% by the year 2010.  Today this point has been largely overpassed. Though China’s energy generation mix will continue to be from coal and some nuclear plants, oil now accounts for the vast major of energy imports for China.

With these facts in mind and a revised estimation of the size of oil extraction from Xinjiang’s basins, Tarim, Jungar, and u-Ha, China had to turn to imports from Russia, Africa, and South East Asia.

But China’s insatiable need for oil has now been incorporated into his vision of territorial expansion which in the South China Sea has seen the Chinese transform coral reefs into islands a from there unilaterally declare surrounding waters as territorial waters of the PRC.

This policy has resaid concern by the international community in regards to free navigation as well as natural resource sharing in the region. For example, when tensions between Vietnam reached a boiling point when a Chinese oil rig was spouted inside Vietnamize territorial water.

The question experts and think tanks are addressing is how to devise a sound strategy to both meet legitimate China’s need for energy supply without putting at risk other economies and the territorial integrity of other countries.

“Does the end justify the means” as per Machiavelli’s theory? Clearly not.

All nations and social-economical systems have a right to exist and flourish but not at the expense of other nations and populations. A new generation of negotiators is to be formed. Expert capable to assess risks and opportunities and develop a new policy that takes into account 21-century communication tools, opinion makers, and dissuasive negotiating tools to prevent confrontations that escalate into conflicts.   

11. References :

1. China’s Changing Oil Strategy and its Foreign Policy Implications by Sergei Troush, September 1, 1999

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