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 its consumption. At current production rates they are likely to last for less than two decades. Though 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. today.
China'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%. Though historically China has had no long-standing strategic interests in the Middle East, its relationship with the region from where most of its oil comes is becoming increasingly important.
Implications for U.S.-China relations
U.S.-China 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. Clearly, in the short term, China recognizes that its energy security is increasingly dependent on cooperation with the U.S., rather than competition with it. China would like to maintain good relations with the U.S. and enjoy the economic benefits derived from such cooperation. But this 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.
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 hostile 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 state sponsors of terrorism and its proliferation of dual use technology.
A report by the U.S.-China 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 supporting terrorism like Iran, Iraq and Sudan:
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