- China's insatiable demand for energy is prompting fears
of financial and diplomatic collisions around the globe as it seeks reliable
supplies of oil from as far away as Brazil and Sudan.
-
- An intrusion into Japanese territorial waters by a Chinese
nuclear submarine last week and a trade deal with Brazil are the latest
apparently unconnected consequences of China's soaring economic growth.
-
- The connection, however, lies in an order issued last
year by President Hu Jintao to seek secure oil supplies abroad ñ
preferably ones which could not be stopped by America in case of conflict
over Taiwan.
-
- The submarine incident was put down to a "technical
error" by the Chinese government, which apologised to Japan.
-
- But even before the incident the People's Daily, the
government mouthpiece, had commented that competition over the East China
Sea between the two countries was "only a prelude of the game between
China and Japan in the arena of international energy".
-
- The Brazil trade deal included funding for a joint oil-drilling
and pipeline programme at a cost that experts said would add up to three
times the cost of simply buying oil on the market.
-
- The West, however, has paid little attention to these
developments. For the United States and Europe are far more concerned with
the even more sensitive issues of China's relations with "pariah states".
-
- In September, China threatened to veto any move to impose
sanctions on Sudan over the atrocities in Darfur. It has invested $3 billion
in the African country's oil industry, which supplies it with seven per
cent of its needs.
-
- Then, this month, it said that it opposed moves to refer
Iran's nuclear stand-off with the International Atomic Energy Agency to
the United Nations Security Council.
-
- A week before, China's second biggest state oil firm
had signed a $70 billion deal for oilfield and natural gas development
with Iran, which already supplies 13 per cent of China's needs.
-
- China has its own reserves of oil and natural gas and
once was a net oil exporter. But as its economy has expanded by an average
of nine per cent per year for the last two decades, so has its demand for
energy.
-
- This year it overtook Japan as the world's second largest
consumer of energy, behind the US.
-
- Its projected demand, boosted by a huge rise in car ownership
as well as the need to find alternatives to polluting coal for electricity
generation, has contributed to the surge in the price of oil this year.
Shortages are already leading to power cuts in the big cities.
-
- Since President Hu ordered state-owned oil firms to "go
abroad" to ensure supply, they have begun drilling for gas in the
East China Sea, just west of the line that Japan regards as its border.
-
- Japan protested, to no avail, that the project should
be a joint one.
-
- The two are also set to clash over Russia's oil wealth.
China is furious that Japan has outbid it in their battle to determine
the route of the pipeline that Russia intends to build to the Far East.
-
- Japan favoured a route to the sea, enabling oil to be
shipped to both Japan and China. China wanted an overland route through
its own territory, which would give it ultimate control if hostilities
broke out.
-
- Increasingly, analysts are saying that China's efforts
have gone beyond what is safe or even in its own interests.
-
- Claude Mandil, the executive director of the International
Energy Agency in Paris, said the reserves in the East China Sea were hardly
worth the trouble.
-
- "Nobody thinks that there will be a lot of oil and
gas in this part of the world," he said.
-
- "It may be a difficult political issue but I don't
think the energy content is worthwhile."
-
- Eurasia Group, a New York-based firm of political analysts,
said its oil experts worked out that China was paying such an inflated
price for its investment in Brazil that the cost for the oil it ended up
with was three times the market price.
-
- "If China's economy falters, which, in my view,
appears increasingly likely, then commodity prices will plummet, and with
them, the value of the assets that produce them," Jason Kindopp, Eurasia's
lead China analyst, said.
-
- "Beijing may end up in a early 1990s Japan situation,
where it is forced to sell recently purchased overseas assets for a fraction
of what it paid for them."
-
- China's wider aggression to secure oil and gas was the
greatest threat to its international standing in the next decade.
-
- "Sudan is the primary example," he said.
-
- "It marks the first time in recent years that China
has promised to wield its veto power in the UN Security Council against
a petition initiated by the United States and backed by France and Great
Britain."
-
- © Copyright of Telegraph Group Limited 2004.
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- http://www.telegraph.co.uk/news/main.jhtml;sessionid=31RRBCLQKVD1LQFIQMFSM
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