Focus on energy cooperation can help 'thaw' US-China relations
Agreement to reduce fuel prices by freeing up some of their strategic oil reserves is set to come into force. Beijing the first buyer of US natural gas liquids. US businesses go where they make money, a logic that appeals to Chinese companies. Biden blocked by Congress for greater openness to Xi Jinping.
Beijing (AsiaNews) - China and the United States are attempting to restart dialogue around energy cooperation leaving to one side the burning issues of the future of Taiwan and the South China Sea, trade, technological leadership, human rights and global governance.
Instead Beijing and Washington are cooperating, and with no small amoung of profit, on energy issues, with Reuters reporting on a recent Chinese government decision to put part of its strategic oil reserves on the market. The move, which should coincide with the Lunar New Year (February 1), is part of a coordinated plan with the United States and other countries to reduce fossil fuel prices, which have been rising in recent months mainly due to growing European demand.
Until now, the Chinese have always kept the details of their energy reserves secret. The understanding with the US suggests that China has agreed to release a larger quantity of oil at prices above a barrel, and a smaller volume at around . Today, WTI crude is worth more than a barrel.
There is no shortage of geopolitical tensions between Beijing and Washington. Neither are commercial tensions in short supply. The Chinese have not met the targets set in "phase one" of the trade agreement signed with the Trump administration in January 2020. According to data from the Peterson Institute for International Economics, as of 30 November, the Asian giant had imported only 62% of the €184 billion in additional US goods and services it had promised to purchase over two years - the baseline being China's 2017 imports.
Despite this, the US has continued to sell liquid natural gas to the Chinese. Since December, the US has been the world's leading exporter of this resource, overtaking Qatar and Australia, a lead fuelled largely by Asian demand. With a 13% share, China is along with South Korea the top buyer of US liquid gas. US energy companies go where they can find profits: Washington's promises, from Obama onwards, for discounted supplies to European allies threatened by a possible Russian energy blockade have found no room in the reasoning of American suppliers.
However, in recent weeks the trend has changed. US liquid gas is heading more for Europe than Asia, but only because high demand from the Old Continent has caused prices to soar. For the Chinese, this is not necessarily a negative sign. As some businessmen on China's west coast have explained to AsiaNews, a Sino-US dialectic based on market and competitive logic is welcome for their interests.
It remains to be seen to what extent energy diplomacy will be able to function as a "stabiliser" in relations between China and the United States. The US Congress is divided on everything, but on maintaining a muscular policy towards China - among other things to protect Taiwan - Democrats and Republicans are in agreement.
This bipartisan welding has prompted Joe Biden to largely confirm Trump's trade war against the Chinese. Yesterday, the US president specified that it is too early to make any commitments regarding the elimination or reduction of Trump's tariffs on Chinese exports: a position that will disappoint US multinationals, who are in favour of normalising relations with Beijing.
But greater openness from Biden will be difficult with Congressional hostility towards China likely to force concrete decisions from the US president - especially on trade - only after the mid-term congressional elections on November 8.
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03/12/2020 09:15
15/01/2021 14:00
