A lot hangs in the balance – including the ability to deal with global financial crises; America’s massive debt; global energy security; climate change; nuclear proliferation and rogue countries, such as North Korea.
Relations depend largely on how Washington and Beijing read and manage China’s rising status and oil interests.
China has revived itself as an economic powerhouse and a world power. The CIA’s World Factbook forecasts that by the middle of this century China’s economy will surpass that of the US in size, though China’s per capita income will remain lower. Of course, as China continues to grow it will compete with the US on multiple levels, including strategic control of oil in the Middle East.
Deng Xiaoping, the famous political leader, launched China’s Open Door policy in 1978 to open China to the world, partly in order to catch up with Western economies.
But China’s economic success has also dramatically increased its oil demand. If current trends continue, China will rely on the Persian Gulf for one-third or more of its oil by 2025. This realization has pushed China to refashion its approach toward that region.
Over the past 25 years, China has significantly expanded its political relations, economic trade, and arms transfers to countries in the Middle East, and especially to Saudi Arabia and Iran. But, to America’s chagrin, that means China’s oil and gas interests in Iran have made it reluctant to take a serious stand against Iran’s nuclear aspirations.
Also, in the past, China had no military capability in or near the Gulf. Now, it aims to project naval power well beyond its coast, not just to the shipping lanes of the Pacific but also to the Middle East. Beijing calls this new approach: “far sea defense.”
China has been building naval forces to serve its new strategy – warships that can project its national power. Over the past few years, it has also built a port at Gwadar, Pakistan, which is largely commercial but may become a strategic foothold near the Gulf. In late March 2010, two Chinese warships docked in the United Arab Emirates – the first time the modern Chinese Navy made a port visit in the Middle East.
China cannot match US military might in the Gulf in the near term. But it has become the newest global player in the region, and as Washington is so used to being the global player, any hint of aggression on the part of China has led some American and Chinese officials and analysts to see a possible future Sino-American clash there.
The real threat is not a military clash, but China’s rise and movements in the region could trigger tensions with the US that could worsen their global relations.
As China becomes more dependent on Gulf oil, it will be more inclined to ensure that Washington does not totally control this oil jugular.
If China and America are to maintain cooperation, both need to manage China’s rise effectively. The oil arena is an important place to start.
While the US is weary of China’s motives, Beijing does not trust the US to protect its oil lifeline. For China, a worst-case scenario would be a conflict over Taiwan. Because the US would likely feel bound to protect little Taiwan, China must consider that Washington could use the oil weapon against it in such a scenario.
So how should relations be managed?
China and the US need to develop better confidence-building measures. They can start by pursuing more joint projects on energy, such as their current project on electric cars. And they need to pursue these projects at higher levels of government.
Washington should also consider bringing China into a Gulf security framework at a high enough level to build Beijing’s confidence but not so high as to give a potentially aggressive China too much leverage. Doing so would not only build confidence but it would create future potential for China to bear part of the burden of Gulf security, even if its support is mainly financial.
For its part, Beijing must show that its behavior in the Gulf and elsewhere is defensive, not offensive. If China were, for instance, to provide greater aid in preventing Iran from going nuclear, it would ease US concerns considerably.
China and the US do not have to become serious rivals over black gold. But they could be if they do not take better measures to build mutual trust.