China has joined the United States and Japan in developing strategic petroleum reserves, and is aggressively securing energy and mineral resources world-wide, particularly in places that cause much consternation in Washington: Iran, Venezuela, and many conflict ridden states of Africa, not to mention, our own backyard of Canada. In 2004, China's oil consumption increased by 40 percent, to 6.5 million barrels a day. U.S. domestic demand is 21 million barrels a day. U.S. demand is increasing by about 500,000 barrels per day per year. China's is increasing by about 1.5 million barrels per day per year.
In the not-too-distant past, China was viewed as an ideological opponent, not an economic competitor. Today, that is a much different story and challenge. With continued population growth and economic expansion in the developing countries like China and India, it doesn’t take a rocket scientist to realize that the demand for resources will soon exceed supply. It’s quite apparent that many of the poorer countries will get the short end of the oil supply and other commodities. It’s also goes without saying that the United States or China will not get all the oil they require either.
With only a small fraction of its poverty ridden 1.3 billion population just now getting their first car and refrigerator, it is highly unlikely that the rest are not going to develop a taste for the American way of life also. In 2001, the Chinese purchased 2.2 million cars. By 2004, its internal automobile market exceeded 5 million. In the next 15 years, China's car market is expected to surpass 20 million, exceeding that of the United States. Thus, we are left with the beginning of a scramble to secure a supply of energy to meet this demand. This can only lead to confrontation and resource wars. For further reading on the ominous portents of awakening a sleeping giant, try Bill Ridley’s article, China and the Final War for Resources .