Saturday, November 20, 2004

Fueling China's Fire

The geopolitical spark that ignites a global realignment may not, after all, originate from the boiling Islamist cauldron of the Middle East, but from the gray expanse of Shanghai's factory district.

Bin Ladin, Zarqawi, Al-Sadr, Khamanei, Assad, et. al. may in the long run be only bit players in a much larger civilizational challenge: accommodating China's
thirst for oil to sate its industrial momentum and the requirements of its bourgeoning middle class. Suburban sprawl spreads to the Middle Kingdom.

With 1.3 billion people, an
average 9% GDP growth over the last twenty years, and industrial production growth rate of 30%, and a net consumption deficit of 1.6 mm barrels of oil/day, China must secure long-term, external sources of oil or face the internal political dislocations of a slowing economy. And given their actions over the last few months, the Party is committed to "steppe"-ing on the gas.

Eyeing Russia's vast oil wealth, and seeing a competitor in Japan, China is playing
cat-and-mouse games over the East China Sea oil fields. At the same time, Beijing has discovered a new interest in the jungles of South America, and is cozying up to the medieval Mullahs in Tehran. Even the opportunist-extraordinaire Mr. Chirac is getting into the act.

Put all of these puzzle pieces together and you've got a Japan, pre-WWII: dynastic in world-view, economically constrained, demographically exploding, and authoritarian in nature. And we're concerned about a postage-stamp sized frozen piece of tundra on the north slope of Alaska.

With the Taiwan independence movement gaining steam, you're going to need your flame-retardant suits - we've got the ideal conditions for spontaneous geopolitical combustion.