Many analysts and economists have argued for years that the United States is set on a collision course with China over jobs, manufacturing, currency and nearly every other economic issue. (See: Niall Ferguson: U.S. Empire in Decline, on a Collision Course with China)
But Pulitzer Prize winning author of The Prize and now the new book The Quest, Daniel Yergin, is not laying claim to that assertion just yet, especially when it comes the global grab for oil and other natural resources.
"Clearly China has pursued a very energetic effort to develop resources," he says, acknowledging there still is a small potential risk for a clash between nations. But for him, the more likely outcome is a partnership between countries. "We need to keep [this] in perspective and look at where we have common interests in stable oil markets."
China's Growing Thirst for Oil
"Two decades ago, China was not only self sufficient in oil, but an actual exporter of petroleum. Today it imports about half of its oil and that share will go up as demand increases," Yergin writes in his new book. "The People's Republic of China is now the second largest oil consumer in the world, behind only the United States…all this reflects what happens when the economy of a nation of 1.3 billion expands at 9 or 10 or 11 percent a year — year after year after year."
With all these new people comes the need for new cars. In terms of auto sales, in 2000 Americans bought 17 million cars compared to China's 2 million. A decade later, China had surpassed the U.S. by whopping 6 million cars—the U.S. bought 11 million compared to China's 17 million.
U.S.-China Partnership Over Energy
"We share interests in solving energy problems," Yergin tells The Daily Ticker's Aaron Task. Basically, energy insecurity for one country means insecurity for the other. "There is actually [already] a partnership between the U.S. and China to develop alternative and renewable technologies," pointing to a number of existing partnerships around the world.
And the fact that our economies are so reliant upon each other for so many other reasons — for example in trade and manufacturing — makes the case for collaboration over oil to be a necessity for the energy security of both nations.
"[However] all of this does not guarantee that competition over energy, and tensions about access and security, will not flare up and become more threatening," he writes. "But it does mean that an established framework exists to handle such issues and to help prevent their escalation into something more serious."
- Daniel Yergin