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| Volume XVI, Summer 2009, Number 2 |
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EXCERPT
China's Policy in the Persian Gulf
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| Mahmoud Ghafouri |
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Dr. Ghafouri is assistant professor of political science at Shahid Bahonar University in Kerman, Iran (m.ghafouri@mail.uk.ac.ir)
Since 1996, China has become a net importer of crude oil, currently the second-largest consumer in the world after the United States and the third-largest importer of oil after the United States and Japan. Thus, it is natural that China should turn to the Persian Gulf region, with the world’s largest proven crude-oil and natural-gas reserves, to provide energy for the world’s most dynamic economy (average annual growth rate, more than 9 percent). To analyze China’s policy in the Persian Gulf, I start with an examination of China’s production and consumption of energy and the prospects for its future imports of crude oil and natural gas. This is followed by an examination of China’s relationships with the states of the region. Finally, Sino-American rivalry in the region is discussed.
BACKGROUND
At 3.73 million tons in 1959, China’s post-revolution oil production was very low. A century of dependence on imported oil and oil products ended in 1963. In that year, the Daqing oil field in northern China produced 4.3 million tons of crude oil out of a national total of 6.48 million. But this self-sufficiency did not serve the goal of economic and social development due to China’s relations with other countries. The Soviet petroleum and technological assistance that were critical for China’s oil industry were terminated in July 1960. Moreover, a U.S.-led embargo lasted from 1950 to the Sino-American rapprochement in 1971. China was self-suffi cient in energy, but the economy was on the verge of collapse. In the early 1970s, China’s international relations improved, leading to the expansion of the economy. Oil and coal became primary export commodities in exchange for industrial equipment and technology from developed countries. China took advantage of the 1973 oil crisis to export oil to Thailand, the Philippines, Japan and other Asian countries in order to cultivate a friendly regional environment for domestic modernization and development. The hard currency earned from oil exports was spent on the import of technology and equipment to develop an export-oriented economy critical for development. China’s crude-oil exports reached a peak of 30 million tons by 1985, but declined afterward due to growing domestic consumption and slower growth in production. China began to import crude oil from Oman in 1983 as a temporary measure to deal with the problems of transporting crude oil from northern China to refineries along the upper stretches of the Yangtze River. In 1988, Chinese imports of crude oil and oil products began to rise rapidly due to increased domestic demand. In 1993, China became a net importer of oil products and, in 1996, a net importer of crude oil.
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