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China battling for oil in the South China Sea

Rob Schmitz Jun 17, 2011
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China battling for oil in the South China Sea

Rob Schmitz Jun 17, 2011
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Kai Ryssdal: There was a big item in “The China Daily” when I was there last week about Vietnamese military exercises down in the South China Sea. Perhaps not coincidentally, the Chinese have been running war games offshore themselves the past couple of days.

Our China correspondent Rob Schmitz says you can blame all the posturing on hydrocarbons.


Rob Schmitz: Nobody knows for sure how much oil and natural gas lie underneath the bottom of the South China Sea. One estimate puts natural gas reserves there at triple the entire domestic supply of the United States. And that’s why China and Vietnam — both rapidly developing and in need of more fossil fuels — are fighting over ownership.

Carl Thayer, professor at the University of New South Wales, says Vietnam’s banking its entire future on its own piece of the sea.

Carl Thayer: Its own economists had mapped out that if Vietnam implemented an economic plan that went out two decades, over half the GDP in Vietnam’s trade would come from the maritime area.

Problem is, China’s laying claim to the same maritime area. In the past year, China’s also scuffled with Japan over another island chain.

University of Wisconsin political scientist Edward Friedman says all this posturing is Beijing’s effort to show the U.S. it has a powerful navy, too. He says after the global financial crisis, China came to the conclusion the U.S. wasn’t recovering quickly. China was.

Edward Friedman: And that this was a unique moment, finally, for China, as the leadership in Beijing experienced it, to get justice.

But Peking University professor Zhu Feng says in this latest conflict, China is just responding to an aggressive push by both Vietnam and the Philippines to explore for oil.

Zhu Feng: Beijing hasn’t just moved down to this disputed area for any oil exploration. So I have to say it’s Vietnam and Philippine who changed the status quo.

Here’s another shift in the status quo: China’s building 30 sea vessels in the next five years to patrol what it claims is its maritime territory. Unless the U.S. becomes involved, Professor Thayer says, neither Vietnam nor the Philippines are strong enough to resist that.

In Shanghai, I’m Rob Schmitz for Marketplace.

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