China Conflict: The Profit Motive


WASHINGTON, D.C., April 5—The Bush administration’s great China standoff has less to do with a downed American spy plane and a missing Chinese pilot than it does with U.S. and China competing for control of the world oil routes that cross through southern Asia. Also at stake is an electronics gravy train for the corporate interests of Silicon Valley.

In seeking to protect shipping lanes for oil tankers, the U.S. has considered equipping nations along the Asian routes—including Taiwan—with the military might needed to defend the surrounding seas. China, which is also seeking greater access to fuel, has expressed anger over the transfer of arms to neighboring Taiwan.

China is the world’s second-largest energy consumer. A net importer since 1993, by 2020 the Communist nation will be importing up to two-thirds of its oil. Eighty percent of those supplies will come from the Middle East. The main exporters now are Oman and Yemen, but China is hoping to obtain supplies from Saudi Arabia as well.

U.S. conservatives tie China’s needs together with the perpetually vexing Saddam Hussein, noting that Chinese oil experts were working in Iraq when the U.S. bombed it recently, and that Chinese-fostered improvement in Iraqi air defense systems will make it more difficult for the U.S. to run its immense police operation in the Middle East.

In recent years China has been more active in attempting to spread its hegemony over ocean supply lines that lead from the Middle East through the Straits of Malacca. Protecting these key trade routes are of major concern to U.S. conservatives; they see arming Taiwan as one step in spreading a military presence around southern Asia. Other nations situated along the routes are the Philippines, Malaysia, and Thailand.

Naturally China objects to American plans for beefing up Taiwan’s military. Major arms could include new destroyers, or possibly refurbished older ones intended for the shah of Iran before he was overthrown. They are built by shipyards in Mississippi (home of GOP senators Trent Lott and Thad Cochran) and in Maine (represented by GOP senators Olympia Snowe and Susan Collins). Both the conservative and liberal ends of the Republican Party make out on this one. So do big corporations. The engines would come from General Electric. And electronics, which include the super-duper Aegis missile system, advanced radar, command and control, and warfare systems will come from a range of Silicon Valley subcontractors. Whether it’s enough to resurrect the pathetic NASDAQ stock market is anybody’s guess, but it certainly won’t hurt any.

The question now is how China’s need for energy to fuel its modernization will affect global energy markets, environmental standards (or the lack thereof), and defense. Though the country is increasingly looking to hydroelectric and nuclear power, easy access to oil remains the key for China’s move into the global economy.