Edited by W. Joseph Stroupe with the mission of explaining world events correctly via strategic analysis & forecasting
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On December 16, 2006 China hosted its first major consumer-nations energy summit, with ministers from the United States, India, Japan and South Korea in attendance. It was billed as a rare move by China to take a leadership role on global energy issues. The news agency Reuters, in its December 16 coverage, made the following observations:
"We want to send out an important, positive message, which is: the world's key energy consuming countries plan to strengthen mutual cooperation," China's top energy policy maker Ma Kai said.
"(We will) promote conservation of oil, improvement of energy efficiency, strong development of oil alternatives, and reduce reliance on oil," he added in prepared remarks to the forum.
The call to action may reflect a growing desire by China to engage with other key energy users, some of whom have criticized its secretive approach, price controls and a strategy favoring Chinese ownership of resources over spot buying of oil.
It also echoed a shared concern over increasingly nationalistic policies in major oil and gas producers that threaten to stymie investment and limit new supplies.
The "summit" was far more significant for what it intentionally neglected to address than for what it actually addressed. China has been taking a diplomatic beating in the West for its decidedly mercantilist policy of scouring the globe to acquire private ownership of ever more sizable portions of global energy assets in an effort to assure its own energy security. India, too, has come in for sharp criticism as it follows mostly in China's policy footsteps, and the two have even deepened their cooperation in bidding for ownership of global energy assets and resources.
A virtual 'China-India energy asset acquisition combine' is increasingly a very potent global force in the sphere of strategic global asset acquisition because the US and the wider West absolutely cannot compete with the lucrative package of economic incentives along with promises of political non-interference in the internal affairs of energy exporting regimes being offered by China and India. Their individual successes, and now the prospect of joint successes, in locking up global energy assets in direct rivalry with the liberal, open US-led global energy order and spot markets is attracting sharp negative attention on a much-widened scale.
Both China and India wish to alleviate the growing criticism of their mercantilist approaches to ensuring their energy security for the simple reason that such notoriety can easily scupper important deals and acquisitions the two consider crucial to their strategies. China found out that truth the hard way in the recent failed acquisition of Unocal by China’s state-controlled CNOC Ltd. Continued success of the China-India energy policy relies upon keeping notoriety and public criticism of their policies and strategies at a minimum. And both China and India are becoming ever more concerned about competition for energy resources with an increasingly assertive Japan. It is against that backdrop that the real intent behind the recent "summit" can be properly understood.
Notably, the US, Japan and South Korea were all invited to send representatives to the recent summit. That should immediately raise the red flags of a likely public relations motivation as the key interest driving the holding of the summit. Both China and India came off during the summit as western-style consuming nations fearful of being held hostage by energy producers whose global clout is mounting, and as responsible, conservation-minded powers that share all the same vital energy security interests, vulnerabilities and fears as the US and the West do. Were the US and Japanese delegations fooled by the carefully crafted pretense?
In the lead-up to the summit U.S. Energy Secretary Sam Bodman reiterated US concerns about the Asian energy policies of racing to gobble up ownership of global energy assets, thereby circumventing and threatening to undermine the liberal, US-led energy order. But the diplomatic and psychological potency of the image portrayed by China and India at the summit, and their apparently genuine promises to act responsibly with the US, Japan and other consuming nations to achieve the strategic energy interests they supposedly share in common, should not be underestimated.
If the portrayal of China's and India's new image allayed Japan's fears of being excluded from the ever more competitive circle of energy security that is increasingly dominated by China and India then the "summit" achieved one of its major aims - to disarm Japan and catch it on its heels while both China and India continue to pursue the same mercantilist policies. The two may have scored a hit in that regard as Japan spoke highly of the proceedings and offered to host next year's "summit".
China and India are in a major energy ploy in two important ways:
First, they are continuing without letup to move hard against the foundations of the current liberal, US-led global energy order by locking up for themselves an increasing share of global energy assets. They do not trust the US-led order and are actively working with key player Russia to create a rival energy order they feel they can trust. Growing China-India cooperation in locking up those global assets is a very significant development, accelerating the negative effects upon the US-led order and helping to rapidly coalesce the new rival order.
Second, they know the red lights of alarm are flashing ever brighter to expose their strategies, and the recent "energy summit", which was completely devoid of any real substance, was clearly planned as a public relations effort to calm the alarm and pave their way to the ongoing success of their energy strategies noted above.
The astute observer will base his/her analysis on the weight of the facts and will not allow his/her thinking to be confused by the ever more potent political indirection coming out of the rising multifarious East, which is much nearer a full-blown emergence on the world stage than most observers recognize.
Note: This Gold version of the analysis is significantly condensed as compared to the full text Platinum version available only to subscribers. The Platinum version addresses head-on the issues of precisely how China and India attempted to disarm the West so as to further their own mercantilist global energy policies, whether they were successful, whether China is actually moving closer to the US, and precisely where and what kind of important strategic partnerships are arising in the East. |
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