America and China Walking toward an Era of Full Competition

The recent turmoil in North Africa and the Middle East has driven up global oil prices, and led big countries to rethink and re-deploy their energy strategies. Meanwhile, it has also provoked a new round of competition between China and America. Earlier this month, U.S. Secretary of State Hillary Clinton stated at a Senate confirmation hearing that if Congress cut the budget of overseas contingency operations, it would put the U.S. at a disadvantage to China in the competition.

In fact, in his State of the Union address back in January, President Obama had already stated multiple times that in order for the United States to win the future, it was necessary to maintain its long-term competitive strength. Also in his address, Obama commented that China had been raising its education level and its budgets on scientific research, and he believed that the U.S. must invest more resources into improving its education system, developing biomedical technology, clean energy technology and so forth. These similar pledges made by Obama and Clinton are no different than a declaration of the era of competition between the U.S. and China.

The effort to secure the stability of energy supply is originally the key to China and America’s global competition. As both countries are major importers and consumers of oil, it is inevitable for the Middle East and Africa to become a fighting zone in foreign diplomacy between the two. As a matter of fact, since China National Offshore Oil Corporation attempted to purchase America’s Unocal Corporation in 2006, the American politicians and scholars in general agreed that China’s strategy on resources had become a threat to America’s established interests in the Middle East. If a conflict arises in the future between China and America, it will be caused by a fight over resources.

China has already set up a new philosophy for its energy strategy. Beijing is investing in politics and trading with its energy exporters in order to secure the stability of it energy resources. To America, China’s energy strategy has already affected America’s basic position to maintain the stability of oil production in the Middle East, to prevent the spiking of oil prices and to secure the safety of energy delivery. At this stage, America’s differences regarding energy strategy may not affect the will to coordinate between the two countries, but it is still going to be difficult to come up with a plan that is effective.

There is also competition in economic development models between China and America. It is undeniable that as China’s economy keeps on growing, its influence is affecting more and more areas — from Vietnam to Syria, Burma to Venezuela and further expansion to the whole African continent. And as the influence is still multiplying, it has created the phenomenon of the “Beijing consensus” replacing the “Washington consensus.” In recent years, it appears that China’s active efforts in foreign trading have secured its global political influence. When Beijing promoted and held the Forum on China–Africa Cooperation, it drew a lot of attention from the Western media to investigate China’s model. European media substantially covered China’s “Marshall Plan” of developing manufacturing bases in Africa. American media also deciphered China’s new tactic of “walking out” as an act of building a new image of China. Some Western scholars who followed the trend even publicly called on European countries and the U.S. to change their ways of aiding Africa.

Most of the liberal scholars of global relations agree that a body with less dependence tends to treat interdependence as a source of power in international relations, haggles over certain issues and hopes for a fluctuation to occur. In this interdependent relationship between China, the United States and the Middle East/Africa, the countries that produce energy are actually the ones in charge, while China and the U.S. are the dependents that rely on the energy, and it is easy for the two to fall into a bad cycle of competition.

The history of international economic development has proven that the prosperity of a regime depends on whether it possesses main energy resources. For example, the presence of coal drove the European Industrial Revolution in the 18th century, and the technology of nuclear energy gave the U.S. the ability to become the superpower of the 20th century. In other words, the one who can master the new source of energy in this century will have the economic advantage. By looking at Obama’s address earlier this year, the United States is going to focus on pushing the research and promotion of low-carbon power generation in the future by developing new energy sources, such as biofuel, wind energy, solar energy, hydrogen energy, carbon capture and storage and others.

Meanwhile, China has been putting a lot of effort into the research and development of new energy, such as wind energy and solar energy; it built more wind turbines than the United States. China’s development of green energy will be in a competing stage with America. Although Hu Jintao visited the U.S. in February in order to seek coordination with America on energy — based on the fact that competition remains a bigger part of the Sino-America relationship than coordination, and America still sees China as its strong competition — the result of their collaboration on new energy development is still under observation. However, energy development will no doubt remain the main topic of the competition and conflicts between China and America.

At this moment, as the race over global energy is still heating up, the competition and tug-of-war between China and America in the Middle East, Africa and Latin America will likely have a repelling effect on Taiwan’s investments and returns in energy development. The competition and coordination between China and America often affects the cross-strait relations, and their effect on Taiwan’s economic interest is inevitable. It is easy to see that this relationship of competition cannot be easily changed between China and America. Both countries need to work together to maintain a unique relationship of competition and coordination that is beneficial to the cross-strait and America. In further explanation, the coordination between China and America needs to be more expedient and more flexible. The real challenge to Washington will be how to urge China to collaborate on building a relationship and an international setting that will benefit everyone.