China’s Crude Dealings Reveal Sophisticated Calculations
show comments
  • Anthony

    Perhaps Beijing has inclination towards a Grand Strategy WRM. China recognizes perhaps possibility of both exogenous and endogenous contingencies affecting its economic and political order.

  • An additional bonus: by stockpiling wealth in oil — I presume this is on shore inside the country? — the opportunities for graft and corruption expand. In China things just disappear — then next thing you know rich officials and their private market co-conspirators are buying up luxury properties in the United States.

    You have no idea how corrupt Chinese society is. And, slowly but surely, it is corrupting the United States as well. Greed know no bounds. Not a single Wall Streeter has gone to jail — oh, wait, maybe one or two — and corporatons never admit guilt; the SEC just settles and you can imagine what the plea bargains are like.

    We are destroying our soul by trading with China — and impoverishing the American working class in the process. I’m glad Romney is speaking out against China. So what if he did evil things in the 1990’s. Nobody’s innocent. It’s the ones who reform that count.

  • Russ

    Old news, and definitely strategic. Oil’s not the only thing China’s hoarding. It’s particularly long in VAST quantities of copper, enough to sway world prices, and far beyond what’s actually (currently) required.

    It makes sense, too. Everyone’s devaluing their currencies, so why hold worthless money, when you can get valuable commodities for them and defray future costs once the crash happens and everybody has to go back to sound money?

  • China is run by one big organized crime syndicate. And we are doing business with them!

  • Jacksonian Libertarian

    Oh come on sophisticated? If the Chinese were sophisticated capitalists they never would have taken the bait of manipulating their currency against their trading partners. Mercantilism just doesn’t work with fiat currencies, as it requires over paying for the foreign currency to begin with, and when the supply of foreign bond holdings reaches large amounts ($1.17 Trillion) the value of those holdings declines even further eventually crushing the export model economy.

  • Warren Henry

    Dr. Mead, China may also be buying and storing oil because they believe in long-term upward pressure on world oil prices (despite recent decline) due to oil’s primacy as the source for world transportation fuels. Battery technology is still very early in the technology cycle and limited, and natgas (CNG), while viable, faces infrastructure issues, such as the lack of fueling stations. Even the U.S. EIA, which is very pro-alternatives, projects that three quarters of liquid fuels in 2035 in the U.S. will be crude-oil based. The transportation fuels/oil relationship is very similar to electricity generation/coal. For the world generally, it simply works.
    I enjoy your work. JWH

  • Surrendering to Evil

    Two stories in today’s WSJ:


    “ING Bank has agreed to pay a record penalty of $619 million for illegally moving billions of dollars through the U.S. banking system on behalf of Cuban and Iranian clients and threatening to fire employees if they failed to conceal the origin of the money. . . The U.S. prohibits certain countries and entities from accessing the U.S. banking system through sanctions enforced by the Treasury Department’s Office of Foreign Assets Control. Banks in Manhattan, which process most of the world’s U.S. dollar payments, use “filters” to prevent terrorists, money launderers and other criminals from gaining access.


    “A bipartisan group of senators launched an effort to lift long-standing restrictions on trade with Russia, beginning a political fight that could inflame tensions with Moscow over its human-rights record and support for the Syrian government. The senators on Tuesday introduced a bill aimed at approving permanent, normal trade relations before the August recess, in a bid to ease the path for U.S. corporations to operate in Russia after the country enters the World Trade Organization. . . . Obama administration officials have said establishing trade relations with Russia is a priority, to keep U.S. companies from losing out to competitors who can take advantage of Russia’s WTO entry.

    There are several interesting things about these two stories. One is that we do not put people in jail for deliberate and systematic criminal activities on an enormous scale. Instead they pay fines. (Imperial China used similar policies.) ING is the fourth bank fined for similar activities in the last several years. Clearly fines do not have a deterrent activity.

    The second interesting thing is that it reveals we clearly have the capacity to deny nations access to our markets and the international banking system. Thus enforcement is technically feasible.

    The third thing is that greed trumps principles. Instead of leading we follow, “lest US companies lose out to competitors” in the words of the Obama adminstration.

    I’m sure the slave trade looked the same way to English business interests in the 16th century.

  • John Fisher

    There is another alternative to consider – that China is stockpiling oil to prepare for its own military adventure. A invasion of Taiwan while the US was occupied with some level of combat with Iran can’t be ruled out. Combat takes a lot of oil.

  • John Fisher – the more I study China the less worried I am about her being militarily adventuristic. Historically the Chinese have never been into invading their neighbors. Of course the Qing Dynasty did — they conquered Tibet, North Korea, and the far western provinces — but they were Manchu, not Han. If China does decide to go after something I think it would be Russia’s Far Eastern Federal District, for obvious reasons:

    Kazakstan is also a possibility, except they already have their hands full with Xinjiang. I hadn’t realized that it still only a half-conquered place like Tibet. We just don’t read about it because they don’t have a Dalai Lama. Of course I’m a complete amateur on these sorts of questions. All I really know at this point is that the ruling regime is criminally evil.

  • The Party doesn’t think long-term. That’s another generalization I’ve come to. Everybody is thinking about getting theirs quick.

© The American Interest LLC 2005-2017 About Us Masthead Submissions Advertise Customer Service
We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to and affiliated sites.