– China, Growing Superpower

China's global impact grows
By DAVID HOWELL

LONDON -- Suddenly China has become the No. 1 topic on the agenda of every Western policy forum and think tank. That the focus should be so sudden is in a way surprising.

After all, ever since the so-called "opening" of China in 1978 the country has been growing at colossal rates, with income per head multiplying by seven times since then and hundreds of millions being lifted out of poverty. China is now the world's largest consumer of steel, concrete, copper and coal, and catching up on oil as well.

So what are the new factors that have so sharpened Western and wider world interest in what is happening there?

The answer is that China itself is involving itself with new intensity across the globe. The policy, which China calls "Going Out," means that the old doctrines of self-sufficiency once preached by Chinese leaders have been abandoned. Instead the new China is getting bolder and bolder, and nowhere more so than in the area of energy supplies and energy security.

Suddenly, or so it seems, Chinese officials and Chinese oil companies are everywhere, doing huge oil deals in the Persian Gulf, making big oil investments, acquiring American firms (such as Lenova taking over IBM's PC division) or cementing strategic partnerships.

Thus China and Saudi Arabia have moved much closer, with growing oil flows heading toward China in exchange for armaments and missiles (said, however, to not work very well). Oman has also become a major oil supplier. Gas-rich Qatar has struck up major deals with Beijing. Iran has stated that it wants China to replace Japan as its main customer and partner on the oil and gas front, with new Chinese investments in Iran going ahead. (One consequence of this is that if the Americans attack Iranian targets, as some apparently want, they could find themselves attacking Chinese interests there as well).

But China is now going still further afield. Venezuela is diverting oil to China as its new key customer, bringing the impact of China's growth into the American hemisphere. North Africa is now on the Chinese target list, with Egypt becoming especially friendly, while further south large oil deals are being negotiated with the Sudanese, including the provision of thousands of Chinese security personnel to guard the pipelines.

If all these were just normal shifts in global oil markets that would be interesting but not significant. But the situation has now been reached where two-thirds of all Middle East oil now goes eastward. The old idea that it is the West that depends on the Middle East for its oil has been invalidated and huge political consequences flow from this switch.

One consequence is that Persian Gulf oil producers who used to look westward and regard the U.S. as their best market and commercial partner are now turning toward the Asian powers, and China in particular, for their strategic relationships. Saudi Arabia is the most obvious example of this trend. Somehow, dealing with China now seems simpler than dealing with the Americans, with less constraining conditions attached.

Another consequence is that in the huge new scramble for secure oil supplies, as well as natural and frozen gas (LNG) and coal supplies, China's example is bound to be followed by India as well as by other countries. And why not? After all, it is the Americans who have proclaimed the new doctrine of the right to take unilateral action (in U.S. President George W. Bush's 2002 National Security Strategy).

If that is the stance of the American "hegemon," it is argued, then the same principle should be applied when it comes to energy security. It is becoming every nation for itself. Instead of multilateral cooperation a pattern is emerging of multilateral rivalry.

In all this national jostling for energy security Russia and the European powers are also reviewing their positions. So is Japan.

Russia is thinking about how to build new diplomatic muscle based on its colossal oil and gas reserves. Europe, which depends more and more heavily on Russian gas and whose North Sea oil fields are running down, now finds that it must keep pace with Chinese acquisitions and deals to secure its own future supplies. Japan is upgrading its military and maritime strength, just to be sure that its oil needs are not elbowed aside by China's oil-import demands, or its oil-supply sea routes disrupted by Chinese naval interference.

The United States, the biggest oil importer of all by far, may be the next to feel the cold winds of Chinese competition for world oil supplies. As some of its old friends and allies switch their trade interest to booming Asia it may already be experiencing these effects.

So the supreme irony in this new geopolitical pattern is that the American policy set out so defiantly in its national security strategy, and reiterated confidently in Bush's recent inauguration speech, may in practice be weakening America's influence and friendships, threatening its imported energy supply sources and speeding up the rise of China as a superpower.

These were not, of course, the intended consequences but they do explain why the global impact of China's enormous growth is suddenly receiving so much attention from Western policymakers.

David Howell, a former British Cabinet minister and chairman of the Commons Foreign Affairs Committee, is a member of the House of Lords.