Tensions Rise As China Scours The Globe For Energy - Telegraph

[hatrack]

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 – 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."

EDIT

http://www.telegraph.co.uk/news/main.jhtml;sessionid=31RRBCLQKVD1LQFIQMFSM5WAVCBQ0JVC?xml=/news/2004/11/19/wchina19.xml&sSheet=/news/2004/11/19/ixworl

[Fridays Child]

1. Memo to China: The USA is the only country allowed to have...

...an insatiable demand for energy.