Energy prices, competition add to strains between US and China
Not quite an ally, not quite an adversary, China with its exploding appetite for energy is helping drive up world oil prices, and putting still more strain on its relationship with the United States.
The importance stretches far beyond the gas pump, although that is where Americans are left wondering what’s behind the run-up, why it can’t be stopped and who is to blame. China is just one factor. Also at play are worries about future supplies and production disruptions in Africa or the Mideast. Still, the “China factor” is big. By some estimates, car ownership in China is growing so fast, with the expansion of its middle class, that by 2030 its traffic will be seven times or more what it is today.
China already is the world’s second largest energy consumer, after the United States. That explains why senior-level economic officials from Beijing and Washington are meeting in Annapolis, Maryland, this week to discuss a range of hot-button issues, including the $256.2 billion US trade deficit with China, an all-time high, and prospects for increasing cooperation on energy issues.
Looming in the background to these and other discussions about US competition with China is the prospect of armed conflict, if not over China’s demand for the return of Taiwan, then over energy resources. China has invested greatly in modernizing its military in recent years, although its budget, even by the Pentagon’s high-end estimate, is hardly one-quarter what the US spends on defense. “Really what it comes down to is not whether the last barrel of oil goes to them versus us because there is always another barrel of oil, it just gets more expensive, just like gold or copper or what-have-you,” said Drew Thompson, the director of China Studies at the Nixon Center, a think-tank. (The Economic Times)-
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.