China and Oil

China: after the end of Civil War, the formal constitution of Mao Tsé-tung’s Democratic Republic of China occurred in 1949. Shortly afterwards, in South-east Asia, the collision between Chinese and north-American interests leads up to the internationalization of the Korean War (immediately, and despite the high number of casualties, contention worked, the Korean War remained a war of regional proportions). Mao Tsé-tung’s China then began the “Cultural Revolution” which ended up dying with its creator in 1976. From then onwards the Chinese way solidifies (already initiated, though probably unconsciously, by the Sino-American Shanghai communication in 1972, marking the conciliation of interests between China and USA, in regards to the soviet giant) in direction towards a pragmatic model of incorporation of “market” in socialism, and making China, in the present day, an undeniable actor in a reflection about world’s evolution in the XXI century.Oil: it is undeniable that “black gold” has been proving itself worthy of the comparison with the precious metal. In 1973, the agreement involving the limitation of production and the rise of the price of the oil barrel (triggered by a critique of Israel’s expansionism and to the rules of international commerce) was initiated by OPEP and led to an economic crisis of great proportions in the economies of the western powers (with the USA at the forefront). Already before (1970), the USA had achieved the maximum of its oil production (peak oil), which is classified by some authors [1] as the most important economic event of the last fifty years: north-American supremacy in terms of the international oil market (obtained through production in American soil) was about to end. – something that became dramatically clear, as I referred, three years later. But oil was also craftily used by the USA (specially by Reagan from 1981 onwards) during the “arms race”, not only when trying to deny access to some important equipments for oil exploration to the soviets by, for example, supporting regional conflicts that were stressful for the USSR such as Afghanistan and instilling Saudi Arabia to sell oil (a lot of it and at cheap prices) so that it would make more difficult for the USSR to finance the arms race through oil revenues. Finally, in 1987 the USSR reached its peak oil (not long before the brutal fall of Soviet economy which preceded the dismantlement of the empire). Today oil is the centre of attentions once again, not just due to speculation about the reasons of USA’s intervention in Iraq but also in consequence of the increasing consensus surrounding the true question of global peak oil being “when is it going to take place?” and not “is it going to happen?”.China and oil: it is almost common sense to look at China, a country that does not produce oil, like a certain strategic and economic power of the new century. It is also common sense that the reach of global peak oil will have serious consequences at economic and social levels – just think about industrial dependence on crude. It is also not a common thought the one that China’s high rates of economic and urbanization/industrialization growth can prove themselves unsustainable, with the oil barrel costing, for example, 80 dollars. In this case, the very solidity of the imaginative Chinese model would be questioned, with grave consequences not just for China but also, understandably, to the whole global economy.

[1] See, for example, HEINBERG, Richard – Smoking Gun: The CIA’s Interest in Peak Oil. In CAMPBELL, C.J.; HILL, Staball, comp. – “ASPO Newsletter No 33 – September 2003”, pp.7-8 (disponível em http://www.cge.uevora.pt/energia/Newsletter33.doc).