As this decade has passed, absent-minded, coffee-house chatter about blockading the sea routes that provide China with most of its imported crude oil seems to have died down. The paradox is that the "threat of blockade" seems to have receded, even as China's dependency on imports has shot through the roof.
China already depends on imports to meet at least half of the 8 million or so barrels of oil that it now consumes every day, and that figure will grow as surely and as steadily as Chinese demand grows.
It is of course no bad thing that the nightmarish scenario of a major power blockading the Straits of Malacca or the Straits of Hormuz is fading from the public imagination. More than 50 ships pass through the Straits of Malacca alone every day, carrying more than 11 million barrels a day of crude oil -- more than 10% of world consumption, and almost all of the oil heading for the hungry import markets of Japan, Korea and China.
All that traffic includes about 80% of China's crude oil imports. That makes the straits between Malaysia, Indonesia and Singapore seem like a tempting target for any world power with a grievance against China. And yet intuitively, all of us living in Asia know very well that it would not be a good thing to blockade the waters outside Singapore. Such a rash act would almost certainly provoke something akin to a new world war.
A fascinating new report published by people who give a lot of thought to the possible outcomes of events like these takes the argument well beyond intuition. "No Oil For The Lamps of China," published in the spring and written by Gabe Collins and William S. Murray explores what could happen.
Collins and Murray, writing for the College Review published by the US Navy War College in Rhode Island, point out that China does not seem to have the military capacity to fight against a blockade.
Its navy hasn't yet stretched so far, the bombers in its air force would struggle to reach the Straits, and China doesn't yet seem to have enough stalwart friends in the neighborhood to give its warships safe harbour in a fight.
But China might not need to fight a blockade directly, and its alternatives could be even more alarming. Setting mines near the domestic ports of the aggressive power? Not such a big problem. Recreating the kind of hurricane-driven havoc that pushed Gulf of Mexico oil and gas production to its limits in 2004 and 2005? Easily within the stretch of the imagination. And let's not forget that China is a nuclear power.
Meanwhile, free markets will always find a way to overcome artificial blockages. Unscrupulous -- or perhaps in the case scrupulous -- traders would find ways to buy and sell oil for delivery to China by other routes. Shipping around Indonesia and Australia would open up.
It is no bad thing that loose chatter of blockading Chinese imports has died away over the years. Maybe it's a natural consequence of China's inevitable rise to great power status. Perhaps it's because Japan and China are getting along better, and Taiwan has an administration that -- for the first time in eight years -- is making very friendly noises towards the mainland. It could even be simply that after five years of exhausting warfare in the Middle East, no one believe that the American public would support fresh fighting in Asia.
As Collins and Murray point out, "an energy blockade of China would not only fail to achieve its objective but also send destructive shock waves through the global economic and political landscape." We should all be grateful that the concept is passing naturally from the public imagination -- even as serious academic reviews show that the stakes are rising quickly.
Dave -- This is fascinating. Admittedly, I don't travel in these particular coffee-house circles, but this is the first time I've heard there was chatter about blockading sea routes to China. Who talked about doing that? And why? And when? Is this old cold Cold War stuff?
Hey Gerry -- you know it's interesting that all the melodrama that accompanied CNOOC's bid for Unocal all those years ago (well, 2005) has really paled in the past 18 months or so. Back in the middle of the decade, there was a painful awareness that room would need to be made for China in the world energy order, and it just wasn't clear how the space would be made and who would give up a seat at the top table. Around that time Japan and China started posturing aggressively around the disputed East China Sea natural gas fields (China even started drilling, claiming outright sovereignty), there were numerous reports fretting about the build-up of China's blue water navy, Taipei and Beijing were squaring up on a regular basis, and there was a genuine sense that somehow a blockade of the Straits was a concept that was truly on the table if chaos broke out in any one of those situations. It was pretty fashionable at the time to talk of blockading choke points for various reaons -- I remember the Bosphorus and Hormuz Straits being talked about in the same way regarding tensions in the Middle East. But the years have mellowed the commentary, at least. Even as I came in to work today and flicked throgh the paper, I see that the new China-friendly Japanese Prime Minister, Yasuo Fukuda, made statements overnight to the effect that joint drilling will begin in the Chunxiao gas fields -- one of the prevailing hot spots of Asian energy tensions.
Hi Dave,
Your piece on the receding threat of an oil blockade against China was engrossing and riveting. What has puzzled me over the years is the fact that the Chinese Navy has not made any efforts/overtures to protect the Straits of Malacca which is akin to the "coronary artery" for the passage of oil into East Asia. No doubt, there would be political repercussions if Beijing shows a keenness to police the Malacca Straits. But the fact that the Chinese have left the responsibility for the safe passage of ships passing through the Straits of Malacca to other nations, gives me a feeling that there is something amiss. While the US Navy has had a strong presence in the Strait of Hormoz ever since 1879, the Chinese have made no such attempts to keep the Straits of Malacca secure. Beijing has stationed its Red Army troops to protect its oil installations in the African countries, it has made no such efforts regarding the Straits of Malacca. The Chinese have a vibrant shipping building industry but their navy lacks an aircraft carrier! Is China caught up in hubris? Is it becoming a sitting duck?
On the point about the US Navy presence in Strait of Hormuz, its my understanding they also have presence in Malacca Strait given Singapore is where US Navy has "re-located", in aftermath of exit from Subic Bay in Phillipines. I cant say for sure as little seems to be written about Uncle Sam's new South East Asian outpost.
I hear much the same thing, David. Though there isn't any sign of the US Navy having a base in Singapore, as you indicate...