Politics of China's oil weapon
It was announced in 1963 that China had become self-sufficient in oil. Beginning in 1965, China's imports began to decrease, becoming nil in 1968. In late 1968, a United Nations' survey team reported that the continental shelf under the East China and Yellow Seas appeared to contain oil deposits perhaps as vast as those of the Persian Gulf, and optimistic estimates of China's onshore reserves also began to appear. At the same time China began to export oil to a number of countries. By the close of the 1960s, China's oil industry was not only continuing production, but adding refining capacity, and expanding into petrochemicals. The prospect of China's oil industry as an investment market for American or other foreign capital is dubious, because of the PRC's adherence to the basic principle of self-reliance. China does not, however, equate self-reliance with seclusion, nor does it rule out various arrangements based upon equality and mutual benefit, such as production-sharing, service contracts, and other techniques that do not involve foreign equity interests. Washington may soon have to decide whether to become involved through governmental or private agencies, a potential stabilizing investor in the sensitive oil projects in which the Soviet Union has thus far unsuccessfully sought to enlist Japan. American involvement might render Japanese participation less objectionable to the PRC as well as shore up Japan's confidence in other aspects of the arrangements. With huge exports predicted to go to Japan, it is wondered if China could gain undue influence over Japan, and would China seek to use oil leverage to separate Japan from the U.S. (MCW)
- Research Organization:
- Harvard Univ., Cambridge, MA
- OSTI ID:
- 7180567
- Journal Information:
- Foreign Policy; (United States), Journal Name: Foreign Policy; (United States) Vol. 20; ISSN FRPLA
- Country of Publication:
- United States
- Language:
- English
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