Trend: The US cannot compete with China for foreign sources of oil, so technology breakthroughs providing alternative energy sources and energy conservation grow in importance.
Jon Markman at MSN Investing describes why the US cannot compete with China for oil and other commodities, especially when dealing with rogue states and using weapons for leverage.
Source: MSN Money - How China is winning the oil race
As Americans pay more for gas, China gobbles up deals for new supplies of oil and other critical resources -- often from rogue regimes in Africa, South America and the Middle East.
The United States is the world's greatest consumer of energy at present, but China is the world's fastest-growing consumer. That puts us in direct competition for any new sources of crude oil, natural gas, coal and uranium....
Energy acquisition is a zero-sum game in which there are winners and losers. Any new energy that China obtains for its fast-growing economy is unavailable to us forever. So you just have to wonder whether the United States' antipathy for dealing with the worst of the world's rogue states has led inexorably to $4-a-gallon gasoline this spring.
Dan Zhou, chief analyst at CEB Monitor Group in Beijing, points out that China has emerged as an attractive partner in Africa and Central Asia in four ways:
- Its intensifying demand drives up prices for their products, which are largely raw materials such as oil, zinc and copper.
- It sets virtually no standards for political transparency or economic reform to get deals done.
- It ignores internal human-rights abuses as an impediment to deal-making.
- And it is a one-stop shop, offering not just investment, trade, skilled workers and military weapons, but also diplomatic protection in the form of its United Nations Security Council veto.
China's hunt for oil in Africa has made it essentially the new colonial superpower in the region....
In Latin America, the story is much the same: China is increasingly becoming the partner of choice for repressive, paranoid or regionally ambitious regimes that want to buy guns and tanks with their oil and ore revenues.
Meanwhile, in the Middle East, Hu has found in Saudi Arabia another repressive regime that wishes to ease away from a highly dependent relationship with the United States.
Iran is China's fastest rising partner in the region. It probably won't be long before Iran becomes China's largest source of imported oil, which will put their economic and political interests directly opposed to U.S. politicians and consumers.
And finally we get to Central Asia republics, which formerly belonged to the Soviet Union, all nestled up against China's back door.
Of course, the Chinese have not left democratic countries' resources off its shopping list.
...our politicians are unlikely yet to ease up on rules preventing U.S. companies from participating in the sort of bribery and weapons brokerage that has become de riguer for doing business in the equatorial zone where most new energy sources are being discovered.
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