China's Unquenchable Thirst for Oil
| Author | Hongyi Lai |
| Published date | 01 December 2010 |
| Date | 01 December 2010 |
| DOI | http://doi.org/10.1111/j.2041-9066.2010.00044.x |
| Subject Matter | Foresight |
leadership as the essential compo-
nent of China’s national economic
security. It is a preoccupation that
will govern the Chinese govern-
ment’s foreign policy and reshape
geopolitics as we head deeper into
the next decade.
A flurry of oil deals negotiated by
China in the first half of 2010, at a
time when its crude imports peaked
at a record 5.15 million barrels a day,
laid bare the strategies China will
employ to sate its growing hunger.
It must diversify where it buys its oil
from and how it transports it across
its borders, and then mould its global
diplomacy accordingly.
A gradual shift from the Middle
East to Africa as the chief source of
China’s oil is under way. Africa’s
share of Chinese imports rose from
Foresight
China’s Unquenchable
Thirst for Oil
Rumblings of concern were
heard within investment cir-
cles when China announced
its crude oil figures back in July. Im-
ports were down 3.2 per cent on the
previous year, marking the first fall
in 16 months. Fears mounted that a
slowdown in Chinese growth could
deplete its demand for oil and hinder
the global economic recovery.
It was an anxiety founded on short-
sightedness. China’s thirst for oil can
only soar over the coming years.
The International Energy Agency
predicted in 2005 that China’s oil
needs would leap to 13 million bar-
rels per day by 2030, increasing its
share of the world’s demand to 11.4
per cent.
Securing a stable and long-term
oil supply is regarded by the Chinese
Recent reductions in Chinese crude oil import figures are misleading, writes Hongyi Lai. China
is becoming more – not less – dependent on oil imports, with geopolitical consequences for
the entire world.
24 per cent in 2003 to 30 per cent
in 2008 and this trend is set to con-
tinue.
In Africa, Angola is currently
China’s largest oil provider, followed
by Sudan and Congo. These relation-
ships have required delicate man-
agement from China’s leaders but
the international furore over China’s
relations with Sudan in particular
has subsided since the spotlight of
the Beijing Olympics dimmed.
But China is still increasing its
efforts to broaden its oil arrange-
ments on the continent. The signing
last May of a $20 billion-plus deal
with Nigeria to build oil refineries
and infrastructure in the West Af-
rican country represented a crucial
breakthrough into a market China
has long coveted.
The Chinese leadership realises
that it cannot rely heavily on the
Middle East for its energy security.
It regards the Middle East as unsta-
ble and subject to US dominance.
Its dependence on Iran, its third-
largest source of crude, also leaves it
wide open to international criticism
as it battles to temper US-led sanc-
tions. And global competition for
oil is far stiffer in the Middle East
than it is in Africa, where many
western countries are reluctant to
become entwined with corrupt re-
gimes. However, an increase in im-
ports from Africa is not a complete
solution to a conundrum that has
been tormenting China’s leaders for
decades.
politicalcartoons.com
Securing a
stable, long-
term oil supply
is an essential
part of China’s
economic
strategy
104 Political Insight
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