In fact, the Chinese are already experiencing a sharp increase in the use of oil and other commodities. More than that, anticipating the kind of voracious resource consumption that goes with anticipated future growth, and worried about the availability of adequate supplies, giant Chinese energy and manufacturing firms–many of them state-owned–have been on a veritable spending binge when it comes to locking down resource supplies for the twenty-first century. They have acquired oil fields, natural gas reserves, mines, pipelines, refineries and other resource assets in a global buying spree of almost unprecedented proportions.
Like most other countries, China suffered some ill effects from the Great Recession of 2008. Its exports declined and previously explosive economic growth slowed from record levels. Thanks to a well-crafted $586 billion stimulus package, however, the worst effects proved remarkably short-lived and growth soon returned to its previous high-octane pace. Since the beginning of 2009, China has experienced significant jumps in car ownership and home construction–along with worries about the creation of a housing bubble–among signs of returning prosperity. This, in turn, has generated a rising demand for oil, steel, copper and other primary materials.
Take oil. In the United States, oil consumption actually declined by 9 percent over the past two years, from 20.7 million barrels per day in 2007 to 18.8 million in 2009. In contrast, China’s oil consumption has risen in this same period, from 7.6 to 8.5 million barrels per day. According to the most recent projections from the US Department of Energy, this is no fluke. The Chinese demand for oil is expected to continue climbing throughout the rest of this year and 2011, even as American consumption remains nearly flat.
Like the United States, China obtains a certain amount of oil from domestic wells, but must acquire a growing share from overseas suppliers. In 2007, the country produced 3.9 million barrels per day and imported 3.7 million barrels, but that proportion is changing rapidly. By 2020, it is projected to produce only 3.3 million barrels, while importing 9.1 million barrels. This situation has "strategic vulnerability" written all over it, and so leaves Chinese leaders exceedingly uneasy. In response, like American officials in decades past, they have moved to gain control over foreign sources of energy–and similarly many other vital materials, including natural gas, iron, copper and uranium.
China Binging on Energy
Chinese energy companies initially started buying up foreign firms and drilling ventures (or, at least, shares in them) as the twenty-first century began. Three large state-owned oil companies–the China National Petroleum Corporation (CNPC), the China National Offshore Oil Corporporation (CNOOC), and the China Petroleum & Chemical Corporation (Sinopec)–took the lead. These firms, or their partially privatized subsidiaries–PetroChina in the case of CNPC, and CNOOC International Ltd. in the case of CNOOC–began gobbling up foreign energy assets in Angola, Iran, Kazakhstan, Nigeria, Sudan and Venezuela. On the whole, these acquisitions were still dwarfed by those being made by giant Western firms like ExxonMobil, Chevron, Royal Dutch Shell and BP. Nonetheless, they represented something new: a growing Chinese presence in a universe once dominated by the Western "majors."