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China
Discovers
Oil Power
In an agc when-oil means
power, communist China is in a
big hurry to tap its newly dis–
covered oil reserves and join the
big league ofoil producers.
With a fturry of activity from
the desolate stretches near the
Soviet border to the South
China Sea, China's back.ward
oi l industry is pressing hard to
find, tap, refine, and se ll its
ne"·-found treasure trove. Ncar
Shanghai, const.ruction of an
..oil city" complete with refin–
ery, petrochemical complex,
and tanker facilities goes on
around the dock.
In the fifties, China was con–
sidered- to be poor in oil reserves
by Western geologists. From
importing over
60%
of its oil
needs from Russia in those
days, China has come 10 the
place where she is now more
than self-sufficieqt With
1.2
million barreis a day in produc–
tion, China is already second to
Indonesia in Asían output. With
sufficient Western technotogical
help, sorne oil experts even feel
China, by the early 1980s, could
match the output of Saudi .
Arabia today.
China's suspected large deep–
water oil pools almos! certainly
will require U.S. technology -
and very likely help maintain
the polilical "connection" to
Washington.
~stimates
of Chinese on- and
Ólfshore oil reserves vary
~
widely. But even conserva1ive
es1ima1es are staggering. Min–
imally they are atleast as bigas
SUMMIT
(Contínued from page
3)
(2)
Tbe major indus1rialized
nalions are no longer the com–
plete masters of their own des–
tinies. The so-caBed Third
World nations are issuing in–
creasingly strideot demands for
a bigger slice of the economic
pie. And these are the same na–
tions that control tbe bulk of the
vital raw materials upon which
the industrial world depends.
Worrisome Comparison
Tbe English magazine,
The
Economist,
pointed out lhat the
six-nation summit was "a repeat
performance of tbe abortive
world economic conference in
London of June 1933.. . . Al
lhat confereoce in London
42
years ago, there were proposals
for co-ordinated monetary and
fiscal policies, a tarilf truce and
4
Alaska's Norlh Slope. Other oil
experts estímate potential re–
serves larger than those of the
en tire Mideast.
Geopolilical Levera.ge
Nalurally the magic of black.
gold has awakened the Chinese
leadersh ip to economic and po–
l itical polentials that were
otherwise elusive. Suddenly a
new great leap forward toward
industrializalion is possible.
Such expanded oil production
formed the basis for Chou
En-laJ~s
pledge in January to move tbe
Chinese economy "into the fronl
ranks ofthe world" by 1990.
Ch ina's presenl oil needs,
while growing, are not huge
(80% of it.s energy comes from
coal). This leaves rapidly ex–
panding oil production for ex–
ports whicb Chinese leaders
realize is the quickesl and least
pa~ul
way for Peking to solve
its ·vex.ing shortage of foreign
exchange.
Already Chinese oil power is
exercising signilicanl leverage
and in.ftuence on the world
po–
litic,¡l scene. Japan eagerly ab-
sorbs the great majority of
China's oil exports, though
present expon tonnages are still
relatively small in relation to
Japan's needs. But, as a resuh,
Russian's Siberian oil fields are
not as attractive to Tokyo as
Lhey once were.
Chi na crude has been used to
maintain leverage wilh North
Korea and North Vietnam. Oil
~a t es
at special rates have
greased diplomatic whe¡:ls witb
the Pbilippines and Tbailand.
For others, the Cltinese ask
"'hat the traffic witr bear -
reaping OPEC benefits
~·ithout
incurring any limiting obliga-
tions.
·
Whether the new comil\unisl
"Sheik's of the East" fully tap
China's oil producing polential
depends on a lot of
vaga~ies:
direction of the communist Chi–
nese leadership in the years
ahead, acceptance or rejection
of !"ajor foreign tecbnologica
1
assistance or mutual bilateral
deals, and overáll trade and po–
litical relations with the rest of
the free world. All of tbese areas
are Uill big question marks.
O
CHINA'S OIL PRODUCTION
until
)949
was less than 100,000-
tons (about2,000 barreis a day) of ,
crude oil. Subsequent produclion
is s hown in thlti graph, according lo
stalistics provlded by the Paris daily
newspaper,
Le Monde:
BARRELS PER OAY IN
THOUSANDS
1949
2.4
1953
' 1957
17
30
gradual abolition of controls on ·
imports and capital movements.
suppert for commodity prices."
A look at the Rambouillet
summit confercnce rcveals al–
most embarrassiog similarities.
The talks were full of general–
ized proposals for the control of
monetary ftuctuations and
broad appeals 10 avoid trade re–
strictions and other aspects of
economic nationalism.
But wiU these laudatory prin–
cipies work out in practice? Cor–
responden! Kosanke asks in
particular:
"Does it mean that France.
for exarnple, wil11ifl the protec–
tion it has thrown over its own
wines and once more allow ltal–
ian wine easy access
LO
French
marlcets? Will Britain ease tbe
pressure against importation' of
foreign automobiles? Will West–
ern Europe in general
lift
its
prohibi tion on acrylic fiber and
footwear coming from tbe Ori–
enl? Will the Uniled Stales let
up on its anti-dumping claims
against numerous foreign-made
products?"
Tbere is no doubt that, with
the possible exception of Brit–
ain's Wilson, whose country has
specific short-term problems,
tbe Summit Six were sincere in
professing their continued com–
mitrnent
10
free trade.
"The obligations undertalcen
'here by the six nations," said
West Germany's Schmidt, "ate
of greatest significance in view
of th'e great temptations that ex–
ist in some counlries to isolate
tbemselves and close their bor–
ders
10
foreign imports."
Tbe degree
~f
cooperation on
trade matters, however, wiU de–
pend very greatly on the com·
plex interplay of each nal ion's
own interna( economic, polilical
and social situations. Índ 11stry,
YUGOSLAVIA
Frigbtened Europe
(Continued from page
3)
The shock of seeing Russian
ample, seems to indicate that troops massed on the Yugoslav–
the "Brezhilev doctrine" _ ltalian border would send shock
whereby the U.S.S.R. asserts its waves throughout 'the resl of
right to militarily intervene in Western Europe. There would
1he affairs of its East European be outcries in certain quarters
bloc - is alive and well.
for free Europe lo develop its
The major clause of the treaty own military defense system
states that the partners agree 10 (probably relying on tactical
undertalce the necessary steps nuclear weapons) as well as a
for "the protection and defense crash program towafd política!
of the historie achievements of Ünion.
socialism." Most diplomats
be-
A Russian takeover of Yugo–
lieve the words have the sort of slavia would wreak bavoc on
elasticity wltich would allow So- the ltalian política) scene. Tbe
viet tanks
10
keep the East Ger- ltalian communists would first
mans in tine under the pretext of all gain immediate extra
of "prolecting socialis!ll." Few ¡Slrength. Thc ltalian govem–
doubt that tbe same reasoning ment might be forced at last to
wouldn't be applied someday 10 take the communisls into tbe
Yugoslavia.
.ruling coalition. The result
could be a "Finlandized" ltaly,
Political Housec:leanlng
moving into a neutralist posi-
in
Belgrade
tion, dropping out of NATO
Yugoslavian authorities are and becoming subservient lo
aiready alarmed over the possi- the Kremlin.
bility. The Tito government is
NATO, in its present form,
now prosecuting
a
number of would very likely collapse. Lon–
pro-Moscow communists. Fear- don's
Daily Telegraph
wams
ing that the Russians are lrying that tbe alliance, under the
to stir up division among Yugo- strain of lhe events in Yugo–
slavia's diverse nationalities, au- slavia, as well as the Greco–
lhorities
in.
Belgrade are also Turkish troubles. "might well
cracking down on leaders in the not survive." Conceivably, the
various republics and autono- trend which would begin with
mous regi.ons wbo stray 100 far · the neutralization of ltaly could
from the concept of Yugoslav continue unabated lhrougbout
federalism.
Westem Europe. Leftist govem-
Furthermore, guerrilla war-' ments wnuld come to or stay in
fare classes are now being con- power in Spain, Portugal, Italy,
ducted in Yugoslavian schools. France, and the Low Countries.
At the same time, Yugoslavia
Al tbis point.
a
violent reac–
has speeded up construction of tion could set in. Tbe same sort
the new fighter-bomber it is of lefiish-tinted political cbaos
building jointly with neighbor- wliich prevailed in Europe in
ing Romanía; another maverick the 1930s could occur again.
communist state. Tbe pattem
¡
5
The time would
be
ripe for a
clear: The Yugoslavs are pre- "man on a white horse" .lo rally
paring for the worst in the a·flagging Weslern Europe back
uncer1ain period which will in- lO life by promising "order"
evitably follow the death of the through a strong "European
agingTito.
Union."
labor unions, and opposing
po–
litical parties exert lremendous
pressures within each nation 10
advance their own inlerests -
which may not be in the long–
range national interest on the
world scene.
Pressures to limit imported
goods, for example, become
grea1 during times of high do–
meslic unemployment.
As corresponden!
Ko~anke
concludes:
"lf
the nations of the
world exhibit tbe will lO sacri–
fice in order to help out the na–
tion next door or across the
ocean, then tbis conference will
have been
~
ltistorically unique
success.
"1
f no
t.
'the unprecendented
social, etltical and economic di–
lemmas' beforc us, to quote Dr.
Kissinger,
tbreat~n
the entire
world with a new round of con–
fron tation, lhe lilces of which
we've probably never seen."
O
No
Pusbover
All of the above, of collf$e,
presumes the worst will happen
- tbat tbe Soviet Union would
lry to take advantnge of future
developmen ts in· lhe Balkans
and that the Yugoslavs them–
selves. could be easily divided
and conque.red. Perhaps in the
present era of detente, with the
Soviets needing security in tbe
West and continued access to
capitalist lechnology, no overt
action toward Tito's wayward
eommunist state would be at–
tempted for sorne time.
But the Balkans, almost by ·
their very nature, seem to invite
political adventurism.
lt
was in
Sarajevo, now capital oftbé Yu–
goslav republic of Bosnia–
Herzegovina, that the assassina–
tion of Archdulce Ferdinand
took place and touched off
World Warl.
Keep your eye on Yugo- '
slavia.
O
WEEK ENDING DECEMBER 6,
1975