China's insatiable demand for energy is prompting fears of financial and diplomatic collisions around the globe as it seeks reliable supplies of oil from as far away as Brazil and Sudan. An intrusion into Japanese territorial waters by a Chinese nuclear submarine last week and a trade deal with Brazil are the latest apparently unconnected consequences of China’s soaring growth.The connection, however, lies in an order issued last year by President Hu Jintao to seek secure oil supplies abroad — preferably ones which could not be stopped by America in case of conflict over Taiwan. The submarine incident was put down to a ‘‘technical error’’ by the Chinese government, which apologised to Japan.But even before the incident the People’s Daily, the government mouthpiece, had commented that competition over the East China Sea between the two countries was ‘‘only a prelude of the game between China and Japan in the arena of international energy’’.The Brazil trade deal included funding for a joint oil-drilling and pipeline programme at a cost that experts said would add up to three times that of simply buying oil on the market. The West, however, has paid little attention to these developments. For the US and Europe are far more concerned with the even more sensitive issues of China’s relations with ‘‘pariah states’’.In September, China threatened to veto any move to impose sanctions on Sudan over the atrocities in Darfur. It has invested $3 billion in the African country’s oil industry, which supplies it with 7 per cent of its needs. This month it opposed moves to refer Iran’s nuclear stand-off with the IAEA to the UN Security Council. A week before, China’s second biggest state oil firm had signed a $70 bn deal for oil and gas development with Iran, which supplies 13 per cent of China’s needs.China has its own reserves of oil and natural gas and once was a net oil exporter. But as its economy expanded by 9 per cent per year for the last two decades, so has its demand for energy. This year it overtook Japan as the world’s second largest consumer of energy, behind the US. Its projected demand has contributed to the surge in the price of oil this year. Since President Hu ordered state-owned oil firms to ‘‘go abroad’’ to ensure supply, they have begun drilling for gas in the East China Sea, just west of the line that Japan regards as its border. Japan protested, to no avail, that the project should be a joint one.The two are set to clash over Russia’s oil. China is furious that Japan has outbid it in their battle to determine the route of the pipeline that Russia intends to build to the Far East. —The Daily Telegraph
