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October 16, 2009 |  6 comments |  Print  Your Opinion  

Topic The Dragon's Increasing Thirst for Oil

Dario Cristiani: As China becomes an increasingly important player in the Middle East the West must make sure it maintains its own strategic interests. Facing fresh influence for the first time the Gulf states are set to benefit from feeding the dragon’s increasing thirst for oil.

Fred Halliday, in his 'The Middle East in International Relations', wrote that the history of the region up until the late 90's could have been written without taking China into account. Indeed, China represents a new player in the Middle East's geopolitical context. Such a change has been driven by its growing “energy thirst”. Despite its status as one of the major oil producers of the world – currently standing at 5th – China has remained a net importer of crude oil since 1996. Since then, its major foreign policy aim has been to secure energy supplies. According to EIA data, China has been the second largest oil consumer since 2008 with a daily consumption of 7.8million barrels (bb/d).

Despite the global economic crisis effecting China's financial, performance its energy demand has not fell. In the first quarter of 2009 the GDP rate collapsed to 6.1% compared to the 10.6% of the same period in 2009. its expected consumption of oil in 2010 will reach 8.2 million bb/d. In 2008, China imported approximately 3.9 million bb/d. According to FACTS Global Energy, half of these supplies came from the Middle East (1.8 million bb/d).

This is leading to China playing an increasingly major role in the Middle East to the point where Beijing can now be considered a key player. The Asian power has a strong and specific interest in further deepening its relations with the Gulf states as they supply the “energy lung” of the global economy. In 2008 Saudi Arabia was the most important oil exporter to China (725000 bbl/d) with Iran as the third (425000 bbl/d). Following in the list are Oman (291000 bbl/d), Kuwait (121000 bbl/d), UAE (91000 bbl/d).

Under the shadow of its pragmatic foreign policy approach, China has used economics as means to penetrate the region. Its cheaper finished products, the availability and adaptability of Chinese workers (as shown by the recent Saudi railway contract), its huge domestic market and the increasing role its coastal cities play as global financial centres have boosted Chinese penetration.

There is a specific political point that could make China an attractive partner for many countries in the developing world and especially in the Middle East. Beijing, at least from a rhetorical point of view, does not have any ambition to influence the internal politics of its allies. Moreover, it represents a successful mix of free-market economics and an authoritative and bureaucratic state. It gives an alternative model for those national elites suspicious of the Western mix of “liberalization plus democratization”, perceived as a threat. China also represents a model for 'alternative development'.

However, there are some geopolitical considerations behind this increasing presence. In the area of political primacy the US is still unchallenged, in spite of the problems Washington is facing. Gaining new allies in the Middle East and showing itself as a reliable partner of “geopolitical diversification” could be an asset for China to challenge US global hegemony. China has almost all the features of a revisionist power gaining a stronger influence in the global system. It means to play a stronger role in the geopolitical and military fields which it has been diplomatically absent from for decades.

The entrance of China into the strategic equation of the Middle East is an immensely important geopolitical development. In the past two centuries, the dominant powers of the region have been the Western countries, the Europeans until the end of the Second World War and the US since then. An increasing Chinese involvement could represent a strong challenge. The economic role of the China in the Middle East could turn into greater political activism. Its role will be multidimensional: it will be mainly focused on economics but Beijing could also represent a reliable geopolitical partner and ideological and institutional model. The transatlantic alliance should be aware of the different and multidimensional aspects of Chinese involvement in the Middle East. Addressing China's rise in the Middle East will serve not only the interests of the Western powers but it will be also a way to preserve stability and strengthen the transatlantic partnership.

Dario Cristiani is a PhD candidate in Middle East and Mediterranean Studies at King’s College London. He has been a political analyst with the Power and Interest News Report (PINR) from 2006 to 2008.

 

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Ivan  Kalburov

October 16, 2009

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A very informative and nicely written article by a knowledgeable analyst. If I can push one of the arguments a little further, I would like to see more concern in the world leaders about the network of authoritarian capitalist regimes that China is leading in economic and political terms.
Dario has a very good reason to worry about energy security. One example: While Turkmenistan is trippling its gas production capacity to 250 bcm/year, it commits only 10 bcm to Europe, and there is not even infrastructure to exporting them. At the same time already last year 30 bcm were flowing to China and a gas pipeline was under construction. While Nabucco is still only a 'project on paper'
 
Unregistered User

October 16, 2009

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This is one of the reasons you are seeing China not standing with Europe and America when it comes to Iran. China will gladly deal with another country with bad human rights to keep feeding its oil supply.
 
Member deleted

October 20, 2009

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Until this summer the gas game has be seen as battle between Russia and West. Now the world economic crisis and current low price of gas have brought a new player to game in fuel sector – China. With its financial strength China has now had ability to intensify its offensive towards the Caspian Sea energy sources especially in Kazakhstan (especially oil) and Turkmenistan (especially gas). Will the outcome be, that both Russia and Western powers with their companies will lose Caspian oil and gas while it will flow to East? Not necessary but from now on one can not ignore China as key player in region. More about this invasion in my article "New player in Caspian Sea Power Corridor" - http://arirusila.wordpress.com/2009/09/29/new-player-in-caspian-sea...

Sure China has brought a competitive alternative to the U.S. Congress adopted the Silk Road Strategy Act (SRS) which outlines a framework for the development of America’s business empire along an extensive geographical corridor. The successful implementation of the SRS requires the concurrent “militarization” of the entire Eurasian corridor as a means to securing control over extensive oil and gas reserves, as well as “protecting” pipeline routes and trading corridors. This militarization is largely directed against China, Russia and Iran. More about background of this battle in my article “Is GUUAM dead?” - http://arirusila.wordpress.com/2008/11/04/is-guuam-dead/

For contest between EU/US backed Nabucco and Russia’s South Stream China’s actions favor later. Today’s arrangements are securing gas for South Stream while Nabucco still is searching supply. It is more clear that Nabucco should be filled with Iraqi and/or Iranian gas and political aspects related to this may delay finding(private) investors and the implementation of project as whole. In bottom line while Russia is taking its part from old gas fields and China from old and new gasfields the Nabucco pipe still is more than half empty. More about this battle e.g. in "EU.s big choice - Nabucco or South Stream?" - http://arirusila.wordpress.com/2009/05/15/eu%e2%80%99s-big-choice-%...
 
Marc William Zedler

October 21, 2009

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In the short-term China will start to exert more influence in the Middle East and other oil rich regions. Nonetheless, what is interesting to note is that the Chinese remain farsighted in their oil consumption. After the recent economic crisis it is the Chinese who are leading the US in renewable energy spending.

"Despite the global economic crisis effecting China's financial, performance its energy demand has not fell. In the first quarter of 2009 the GDP rate collapsed to 6.1% compared to the 10.6% of the same period in 2009. its expected consumption of oil in 2010 will reach 8.2 million bb/d. In 2008, China imported approximately 3.9 million bb/d. According to FACTS Global Energy, half of these supplies came from the Middle East (1.8 million bb/d)."

In comparison to Western countries the Chinese have dealt with the economic crisis far better than its Western counter-parts. If China still has a positive growth rate why would demand decrease for natural resources?
Tags: | China | energy | gas | US |
 
Ivan  Kalburov

October 21, 2009

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We also have to look at the big picture of global exports, not only production. While the US is importing a smaller share of its oil consumption than China, the oil exporters are increasing domestic consumption a lot. This makes the oil in the world market more scarce and this is the reason why China is ever more aggressive. To this we add the agreeable tone as regard democracy and HR and good governance it has with the oil exporters.
I would be happy if the latter do not realize the need for eenrgy efficiency and renewable energy. This would mean that US, China and India will have to understand how important those are and develop them better. At the end of the day, the best energy is the one we do not have to buy :)
 
Unregistered User

April 13, 2010

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Ah ah very good very good... good english too... Brav brav si ruoss
 

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