Oil affects everything

Erica S. Downs writes a very interesting column in BusinessWeek explaining how oil is affecting China’s relationship with the United States . She cites several examples:

The two most prominent spots where China’s search for oil collides with American interests are the Sudan (the largest source of foreign production for Chinese companies) and Iran (China’s No. 3 supplier of crude imports). While Washington sees a major power using its permanent seat on the U.N. Security Council to frustrate efforts to halt genocide in Darfur and to slow international action to curb Iran’s nuclear ambitions, Beijing sees international policies of limited efficacy that might jeopardize its oil supply.

So far, China has weighed its oil interests against the interests of the international community on a case-by-case basis. In the case of Sudan, the scales have tipped in favor of oil. Beijing weakened the language of at least one Security Council resolution to punish the Sudanese government for the atrocities in Darfur, but recently agreed to the deployment of U.N. forces there if supported by the African Union. In the case of Iran, which requires balancing competing interests such as oil, regional stability, and the Sino-American relationship, Beijing has sided with the international community to date. China voted as a member of the board of governors of the International Atomic Energy Agency in February, under pressure from Washington, to report the Iran nuclear issue to the U.N. and supported the July 31 Security Council resolution threatening sanctions if Iran does not halt uranium enrichment. However, deeper energy ties to Iran (the No. 2 holder of global oil and gas reserves) might tempt Beijing to tip the scales in the other direction.


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