Aff China Energy Security Adv

Zarefsky Juniors 1/75
China Advantage Andrew Jones

CHINA ENERGY SECURITY ADVANTAGE
US-Sino Relations scenario...............................................................................................................................................................................3
U: ENERGY CONFLICT NOW.......................................................................................................................................................................8
U: ENERGY CONFLICT NOW.....................................................................................................................................................................10
U: CONFLICT NOW – SEA LANES.............................................................................................................................................................17
U: CONFLICT NOW – IRAN.........................................................................................................................................................................19
U: CONFLCIT NOW – IRAN.........................................................................................................................................................................20
U: CONFLICT NOW – CLIMATE.................................................................................................................................................................21
U: CONFLICT NOW – PRICES.....................................................................................................................................................................22
U: AT: CHINA ALT ENERGY SOLVES........................................................................................................................................................23
L: SANCTIONS..............................................................................................................................................................................................24
I: MISCALC/WAR..........................................................................................................................................................................................26
I: Iran Sanctions Scenario................................................................................................................................................................................28
I: Iran Sanctions Scenario................................................................................................................................................................................30
I: Iranian Sanctions and relations....................................................................................................................................................................31
S: COOPERATION POSSIBLE......................................................................................................................................................................32
S: COOPERATION GOOD.............................................................................................................................................................................34
S: COOPERATION GOOD.............................................................................................................................................................................36
.........................................................................................................................................................................................................................36
S: COOP POSSIBLE – Nuclear energy..........................................................................................................................................................37
S: COOP GOOD – CLIMATE.........................................................................................................................................................................38
S: China wants CoopERATION......................................................................................................................................................................39
S: China Wants coopERATION.......................................................................................................................................................................40
S: US wants coopERATION............................................................................................................................................................................41
AT: impacts Inevitable.....................................................................................................................................................................................43
AT: CHINA HURTS US HEG.........................................................................................................................................................................44
AT: CHINA HURTS US Hege.........................................................................................................................................................................46
AT: China Bad.................................................................................................................................................................................................47
AT: China Bad.................................................................................................................................................................................................48
AT: US-Sino relations Bad..............................................................................................................................................................................49
AT: ALT COOP CP..........................................................................................................................................................................................50
AT: ALT COOP CP..........................................................................................................................................................................................51
AT: PALM OIL CP..........................................................................................................................................................................................53
NEG: Alt Cause: Sanctions hurt relations.......................................................................................................................................................54
NEG: Alt Cause: Sanctions hurt relations.......................................................................................................................................................55
NEG: CoopERATION now – ENERGY.........................................................................................................................................................56
NEG: CoopERATION now – ENERGY.........................................................................................................................................................57
NEG: COOPERATION NOW – ALT ENERGY............................................................................................................................................58
NEG: COOPERATION NOW – NUCLEAR TECH......................................................................................................................................59
NEG: COOPERATION NOW – NUCLEAR TECH......................................................................................................................................61
NEG: CoopERATION now – OIL...................................................................................................................................................................62
NEG: CoopERATION NOW – OIL................................................................................................................................................................63
NEG: coopERATION NOW – NATURAL GAS............................................................................................................................................64
NEG: OTHER COOPERATION KEY............................................................................................................................................................65
NEG: OTHER COOPERATION KEY............................................................................................................................................................67
NEG: ENERGY COOPERATION HURTS RELATIONS.............................................................................................................................68
NEG: AFRICA OIL SOLVES CHINA............................................................................................................................................................69
........................................................................................................................................................................................................................69
NEG: OIL COOPERATION SOLVES............................................................................................................................................................70
NEG: Iran Sanctions Scenario non-inherent....................................................................................................................................................72
NEG: No impact TO ENERGY CONFLICTS................................................................................................................................................73
“My evidence drinks your evidence’s milkshake”
NEG: MALACCA CP solvency......................................................................................................................................................................75

US-SINO RELATIONS SCENARIO
COMPETITION FOR OIL MAKES CONFLICT WITH CHINA INEVITABLE.

Wu Lei is director of the Centre for Energy security and Strategy at the School of International Studies, Yunnan University, Kunming,
China, and is author of China's oil security. and Shen Qinyu is a lecturer at Capital University of Economics and Business in Beijing. Far
Eastern Economic Review. Hong Kong: Apr 2006. Vol. 169, Iss. 3; pg. 38, 3 pgs
AS THE GLOBAL energy markets undergo radical changes and oil prices remain near record highs, the "China
energy threat" has emerged as a new fear in Washington's corridors of power. China's quest for energy
security, conducted through aggressive "bilateral energy diplomacy," has attracted worldwide attention.
Many analysts argue that the trajectories of the U.S. and China, the world's two most voracious energy
consumers, will inevitably lead to a clash over resources in the future.
Energy security is already playing an increasingly important role in Sino-U.S. relations, intensifying friction on
regional issues. For instance, Sudan is one area of dispute in which oil is a key to China's interest. At present,
Sudan is China's largest overseas production base, and more than half of the country's oil exports go to
China, accounting for 5% of China's total oil imports. The genocide and humanitarian disaster in oil-rich
Darfur in southern Sudan has given rise to concern in the U.S., which proposed sanctions on Sudan by the
United Nations. In September 2004, the security Council voted to threaten sanctions on Sudan's oil industry if
Khartoum failed to rein in Janjawid militiamen in Darfur. Shortly after the vote, China announced that any
attempts to actually impose sanctions would be met with a Chinese veto.
Iran is a more troublesome and dangerous test of Sino-U.S. relations, however. Iran is now China's biggest
foreign-oil supplier, and its relations with China in the political, economic and military arenas have intensified.
On Oct. 28,2004, China signed an agreement with Iran worth between $70 billion and $100 billion to develop
the giant Yadavaran natural-gas field and Beijing agreed to buy 250 million tons of liquefied natural gas from
Iran over 25 years. Beijing wants to construct a 386-kilometer pipeline from Iran to the northern Caspian Sea
to connect with the Kazakhstan-Xinjiang pipeline, bringing more Middle East oil to China. This would have
lasting strategic benefits for China, since a pipeline reduces reliance on shipped oil.
China's increasing energy investment and trade breakthrough with Iran obviously clashes with America's Iran-
Libya Sanctions Act. The U.S. and the European Union are pressuring Iran to give up its nuclearpower
program, and Washington wants to refer the case to the U.N. security Council to impose sanctions on Tehran.
Since Sudan and Iran together supplying China with 20% of its oil imports, U.S. attempts to contain these
regimes bring it into direct confrontation with China's energy-security policies. Washington has warned Beijing
that the two countries would be on a collision course if China continues to pursue energy deals in places like
Iran and Sudan. U.S. Deputy secretary of State Robert Zoellick has said that Beijing's ties with "troublesome"
states would have repercussions elsewhere, and the Chinese would have to pay the "price."

THESE CONFLICTS ESCALATE TO WAR – ONLY STRENGTHENING ENERGY SECURITY

OFFERS COMMON GROUND FOR CHINA-US COOPERATION.
Wu Lei is director of the Centre for Energy security and Strategy at the School of International Studies, Yunnan University, Kunming,
China, and is author of China's oil security. and Shen Qinyu is a lecturer at Capital University of Economics and Business in Beijing. Far
Eastern Economic Review. Hong Kong: Apr 2006. Vol. 169, Iss. 3; pg. 38, 3 pgs
It must be made clear that China is not a small regional power like Iraq or North Korea. If confronted with
serious threats to its energy security, it will mobilize all its economic, political and military resources to ensure
a secure energy supply, or to interfere in the energy supply chains of the U.S. and its allies like Japan in key
chokepoints such as the South China Sea, the Strait of Malacca or even the Taiwan Strait. These
counterbalancing measures would, of course, be a last resort.
Being major energy importers, China and the U.S. are finding more common interests with regard to energy
affairs. Both countries face similar problems: Domestic oil resources are declining, domestic energy supplies
fall short of demand, and there is an increasing need for imports. Both hope for a stable supply and fair price
in international markets.
China should actively expand its coordinative relations with U.S. In fact, as long as the U.S. does not
embarrass China on the Taiwan issue, it is possible for the two powers to carry out comprehensive dialogue
and even cooperation. After all, common interest in stabilizing energy supply and price makes it necessary for
two powers to exercise strategic cooperation.
For China, international cooperation in energy security should be become part of its energy-security strategy.
China's decision makers should keep in mind that energy security is a global issue and no single energy-
importing country can remain immune from an oil crisis. In an era of globalization, a single nation's policy no
longer works well to address oil security.
The U.S. and its allies, accordingly, should gradually lead Beijing onto the right track by, for instance, taking
China into the "oil club," the International Energy Agency, in order to turn China's unilateral energy policy into
a multilateral one. This move would not only alleviate U.S. concerns about China's unilateral energy
diplomacy, it would also help to prevent future energy crises and minimize the security risks. China's
membership in the "oil club" would enable Beijing to obtain or share energy market information. And
cooperation with the West would bring energy-tapping technology, investment knowledge and environment-
protection know-how, all of which are priorities of China's new energy strategy. Most importantly, through
cooperation, China and U.S. can minimize disputes and possible conflicts over energy.

Conflicts escalates and causes nuclear war
Johnson, Journalist, 5-14-2001 (Chalmers, “Time to Bring the Troops Home,” The Nation, Volume 272,
Number 19)
China is another matter. No sane figure in the Pentagon wants a war with China, and all serious US militarists
know that China's minuscule nuclear capacity is not offensive but a deterrent against the overwhelming US
power arrayed against it (twenty archaic Chinese warheads versus more than 7,000 US warheads). Taiwan, whose status
constitutes the still incomplete last act of the Chinese civil war, remains the most dangerous place on earth. Much as the 1914
assassination of the Austrian crown prince in Sarajevo led to a war that no one wanted, a misstep in Taiwan by any side could bring the
United States and China into a conflict that neither wants. Such a war would bankrupt the United States, deeply divide
Japan and probably end in a Chinese victory, given that China is the world's most populous country and would
be defending itself against a foreign aggressor. More seriously, it could easily escalate into a nuclear
holocaust.
And, It destroys civilization

Cheong, Journalist, 2001 (China, Will Taiwan Break Away? The Rise of Taiwanese Nationalism, p. 7)
He said military leaders considered the use of nuclear weapons mandatory if the country risked
dismemberment as a result of foreign interventions. Gen Ridgeway said that should that come to pass we
would see the destruction of civilization. There would be no victors in such a war. While the prospect of a
nuclear Armageddon over Taiwan might seem inconceivable, it cannot be ruled out entirely, for China puts
sovereignty above everything else. Gen Ridgeway recalled the biggest mistake the US made during the Korean War was to
assess Chinese actions according to the American way of thinking. “Just when everyone believed that no sensible commander would
march south of the Yalu, the Chinese troops suddenly appeared,” he recalled. (The Yalu is the river which borders China and North Korea,
and the crossing of the river marked China’s entry into the war against the Americans). “I feel uneasy now if somebody were to tell me
China would not do this or that, “ he said in a recent interview given to the Chinese press.

The search for a sustainable source through alternative energy is an opportunity

to cooperate between the U.S. and China
Stuart V. Price heads a communications firm that represents energy companies and environmental
interests. The Washington Post August 26, 2006
Cass R. Sunstein mentioned only one way to encourage leaders in the United States and China to tackle the
climate change challenge: economic benefits. Despite the allure of serving a greater good, world leaders will
respond most seriously to this challenge when it benefits the bottom line.
Grappling with climate change means shifting from the traditional fossil-fuel-based economy. Congress has
estimated that $20 trillion will be invested in clean energy technologies by 2050. Recognizing abundant
national resources in both countries, this will involve technologies such as coal-to-liquid fuels, coal
gasification, wind, solar, biofuel, ethanol, natural gas and nuclear power.
The world, of course, will not stand by waiting for U.S. breakthroughs. Leaders in China and other nations are
already accepting that challenge. To remain competitive, U.S. economic plans must emphasize technologies
designed to limit climate change.
And, it is a critical time to reengage china to solidify cooperation

Hills, former U.S. Trade Representative, 4-26-2007 (Carla, “Engaging the New China,” International Herald Tribune)
The relationship between the United States and China will shape the future of the planet in the 21st century.
In key areas - economic growth, regional security, counter-terrorism, nonproliferation, human rights, public
health and the environment - a close, candid and cooperative relationship with China offers the United States
a chance to make significant progress on its global agenda. Indeed, the core international public policy
challenges confronting the United States can best be managed with China's constructive participation.Yet at a
time when U.S.-China relations offer great opportunity, the consensus behind 35 years of engagement with
China is fraying. Moreover, the undeniable challenges posed by an ascendant China come at a time when the
president and Congress are concentrating on a global campaign against terrorism and when the United States
is carrying the burdens of major military and political commitments in Iraq and Afghanistan.
Strong U.S. – Sino relations and cooperation prevents extinction. Cooperation is

the only way to solve economic stability, terrorism, crime, prolif, and disease
spread.
Wenzhong, PRC Ministry of Foreign Affairs, 2-7-2004 (Zhou, “Vigorously Pushing Forward the Constructive
and Cooperative Relationship Between China and the United States,” http://china-
japan21.org/eng/zxxx/t64286.htm)
Terrorism, cross-boundary crime, proliferation of advanced weapons, and spread of deadly diseases pose a
common threat to mankind. China and the US have extensive shared stake and common responsibility for
meeting these challenges, maintaining world peace and security and addressing other major issues bearing
on human survival and development. China is ready to keep up its coordination and cooperation in these
areas with the US and the rest of the
international community.
During his visit to the US nearly 25 years ago, Deng Xiaoping said, "The interests of our two peoples and those of world peace
require that we view our relations from the overall international situation and a long-term strategic
perspective." Thirteen years ago when China-US relations were at their lowest ebb, Mr. Deng said, "In the final
analysis, China-US relations have got to get better." We are optimistic about the tomorrow of China-US
relations. We have every reason to believe that so long as the two countries view and handle the relationship
with a strategic perspective, adhere to the guiding principles of the three joint communiqué and firmly grasp
the common interests of the two countries, we will see even greater accomplishments in China-US relations.

U: ENERGY CONFLICT NOW
CHINA’S OIL DEMAND HAS DRIVEN UP OIL PRICES, STRAINING US-SINO RELATIONS. AND THE ENVIRONMENT
CAN AND SHOULD BE A UNIFYING FACTOR
The Associated Press 17 June 2008 By ROBERT BURNS “Energy prices fuel US-china strain”
http://www.uofaweb.ualberta.ca/chinainstitute/nav03.cfm?nav03=80213&nav02=80135&nav01=57272
WASHINGTON (AP) - Not quite an ally, not quite an adversary, China with its exploding appetite for energy is
helping drive up world oil prices -- and putting still more strain on its relationship with the United States.
The importance stretches far beyond the gas pump, although that is where Americans are left wondering
what's behind the run-up, why it can't be stopped and who is to blame. China is just one factor. Also at play
are worries about future supplies and production disruptions in Africa or the Mideast.
Still, the "China factor" is big. By some estimates, car ownership in China is growing so fast, with the
expansion of its middle class, that by 2030 its traffic will be seven times or more what it is today. China
already is the world's second largest energy consumer, after the United States.
That explains why senior-level economic officials from Beijing and Washington are meeting in Annapolis, Md.,
this week to discuss a range of hot-button issues, including the $256.2 billion U.S. trade deficit with China --
an all-time high -- and prospects for increasing cooperation on energy issues.
Looming in the background to these and other discussions about U.S. competition with China is the prospect
of armed conflict -- if not over China's demand for the return of Taiwan, then over energy resources. China has
invested greatly in modernizing its military in recent years, although its budget -- even by the Pentagon's
high-end estimate -- is hardly one-quarter what the U.S. spends on defense.
At present it sounds far-fetched to think of rising oil demand as a trigger for war with China, and some of the
United States' more experienced China watchers say that makes little sense.
"Really what it comes down to is not whether the last barrel of oil goes to them versus us because there is
always another barrel of oil -- it just gets more expensive, just like gold or copper or what-have-you," said
Drew Thompson, the director of China Studies at the Nixon Center, a think tank.
In a sense, U.S. consumers have a stake in seeing China's energy needs met. Americans can't seem to get
enough of China's exports, from toys and clothes to computers and car parts. That's an expanding appetite
that is part of the reason China is looking far and wide for additions to its energy supplies.
"So long as we're buying Chinese goods to our own benefit, much of the Chinese international raw material
purchases are there to serve us," Thompson said. "That's a political realization I don't think we've yet made,
but American consumers make that fairly regularly with every trip to Wal-Mart."
The soaring trade deficit with China is cited by critics as a major contributing factor in the loss of more than 3
million U.S. manufacturing jobs since 2001. Many in the U.S. say the undervalued yuan makes Chinese goods
cheaper in this country and America's products more expensive in China.
The United States is China's largest trading partner; China is the United States' second-largest.
Where some see peril in the competition for energy sources, others see possibility.
James Jones, the retired Marine four-star general who is president of the U.S. Chamber of Commerce's
Institute for 21st Century Energy, was in Beijing last month for a U.S.-China energy conference.
"While the United States and China are two vastly different countries, energy and the environment can be,
and should be, unifying factors as we seek mutual solutions to our common problems," Jones told the
conference.
The United States has urged China to promote energy efficiency as a way of reducing strains on global
supplies, but that has met with little success. The Chinese have been moving in the opposite direction,
providing ever greater subsidies to keep energy costs low as global prices have surged.
One aspect of the energy problem that China and the United States have in common is concern about
security of supplies from abroad. As the world's two largest net importers of oil, both rely on imports from the
Middle East and other areas of the world were stability is far from assured.
Chinese oil producers are trying to increase total global supplies by investing billions to develop oil and
natural gas sources in Africa, Central Asia and other areas that might otherwise be considered too difficult or
expensive.
In the Pentagon's view, access to oil and other energy resources is influencing China's strategic behavior,
including its approach to developing air and naval forces that can reach far beyond China's shores.
"At present, China can neither protect its foreign energy supplies nor the routes on which they travel," David
Helvey, a top China policy official at the Pentagon, told the U.S.-China Economic and Security Review
Commission, a congressionally chartered group that studied China's rising energy consumption.
Pentagon officials also foresee the possibility that in its search for additional energy resources, some
elements of China's market-based economy will clash with the Chinese Communist Party's desire to retain its
monopoly on political power and control of its most important industries, including energy. And that, in the
Pentagon's view, could raise questions about the stability of the Communist regime.

CHENEY’S MIS PERCEPTIONS OF CHINESE OIL PROJECTS IN CUBA HAVE STRAINED RELATIONS
Associated press 12 June 2008 Josef Hebert Cheney criticized for saying falsely that China is drilling for oil
off US coast
WASHINGTON (AP) - Vice President Dick Cheney's office acknowledged on Thursday that he was mistaken
when he asserted that China, at Cuba's behest, is drilling for oil in waters 60 miles (100 kilometers) from the
Florida coast.
In a speech to the U.S. Chamber of Commerce, Cheney said on Wednesday that waters in the eastern Gulf of
Mexico, long off limits to oil companies, should be opened to drilling because China is already there pumping
oil.
"Oil is being drilled right now 60 miles off the coast of Florida," the vice president said. "We're not doing it, the
Chinese are, in cooperation with the Cuban government. Even the communists have figured out that a good
answer to high prices is more supply."
He cited his source as columnist George Will, who last week wrote: "Drilling is under way 60 miles off Florida.
The drilling is being done by China, in cooperation with Cuba, which is drilling closer to South Florida than U.S.
companies are."
Congressional Democrats pounced on the vice president's remarks and were reinforced by independent
energy experts, who called the assertion hyperbole at best and a falsehood at worst.
Cheney's office said in a statement to The Associated Press that the vice president had erred.
"It is our understanding that, although Cuba has leased out exploration blocks 60 miles off the coast of
southern Florida, which is closer than American firms are allowed to operate in that area, no Chinese firm is
drilling there," according to the statement.
Cuba clearly is interested in developing its deep-water oil resources, estimated at more than 5 billion barrels,
including areas within 60 miles (100km) of Key West, Florida, energy experts said.
Jorge Pinon, a senior energy fellow at the University of Miami specializing in Latin America, said Cuba has
awarded offshore oil leases, or concessionary blocs, in its offshore waters to six oil companies, none of them
Chinese, and soon may announce an agreement with Brazil's state oil company, Petrobras.
"But no one is currently drilling in any of those concessions," said Pinon in a telephone interview. Pinon, who
supports drilling in the eastern Gulf and believes it can be done without hurting the environment, said China
is being raised as an unnecessary "bogyman" by drilling proponents.
"There is no actual drilling yet. ... There is exploration," said Johanna Mendelson-Forman, a senior fellow on
energy and Latin America at the Center for Strategic and International Studies.
She said China's oil company, Sinopac, has conducted exploratory drilling on a lease on land in western Cuba
but is not involved in the offshore development.
Talk of China drilling in waters within 50 miles to 60 miles (80km to 100km) of Key West has been a common
theme among Republicans. They are clamoring to open more of the country's offshore waters to energy
development, including the eastern Gulf, where drilling is strongly opposed by Florida officials.
"China, thanks to a lease issued by Cuba, is drilling for oil just 50 miles from Florida's coast," Republican Rep.
George Radanovich recently wrote in The Modesto Bee, a newspaper in California. He was arguing to open
waters that have been off-limits to U.S. companies for 25 years.
Radanovich's office said the congressman was in transit and not immediately available Thursday.
House Republican leader John Boehner, urging more domestic oil production, declared, "right at this moment
some 60 miles (100km) or less off the coast of Key West, Florida, China has the green light to drill for oil."
"Even China recognizes that oil and natural gas is readily available off our shores, thanks to Fidel Castro,"
complained Rep. Roy Blunt, a leader of a Republican energy task force.
Democratic Rep. Edward Markey accused the Republicans of pushing oil development by "scaring up the
ghosts of communism and xenophobia" and "perpetuating a myth that China is drilling off the coast of
Florida."

China’s newfound heavy demand for oil Hurts US-Sino relations

BusinessWeek September 4, 2006 “How Oil Fuels Sino-U.S. Fires”
The emergence of China over the past decade as a major importer of oil has catapulted energy toward the
top of the list of issues -- up there with trade and Taiwan -- that are major sources of friction in Sino-American
relations. China's rapidly rising demand for energy is stoking anxiety in Washington that there is not enough
oil in the world to satisfy the appetites both of America's 300 million gas-guzzling citizens and of 1.3 billion
Chinese. In turn, America's unease has raised concerns in Beijing that the U.S. might deny China access to
the oil it needs for continued economic growth.
Much has been made over this looming fight. Yet the real conflict brewing between the two powers isn't
because of direct competition for physical barrels of crude, but rather because oil is inextricably linked to
other foreign policy issues on which Beijing and Washington don't see eye to eye.
Oil's increasing role in China's foreign policy reflects a surging demand. China is second only to the U.S. in
world consumption, and it's No. 3 in imports, following the U.S. and Japan. Its demand has more than doubled
in the past decade. China consumes 7 million barrels a day, one-third the U.S. level, and it imports 3.3 million
bbl. a day, one-quarter the U.S. level. But the International Energy Agency projects Chinese demand in 2011
will be 9.1 million bbl. a day, with imports of 5.3 million bbl.
CHINA'S GROWING DOMESTIC oil deficit has prompted it to follow in the footsteps of other major importers to
ensure access to oil. China is diversifying its suppliers, encouraging its national oil companies to acquire
assets abroad, and cultivating closer diplomatic relations with exporting nations. Although these are moves
long employed by other countries, their adoption by China has sounded alarm bells in Washington.
(Remember the furor over CNOOC's ill-fated bid for Unocal last year?)
The two most prominent spots where China's search for oil collides with American interests are the Sudan
(the largest source of foreign production for Chinese companies) and Iran (China's No. 3 supplier of crude
imports). While Washington sees a major power using its permanent seat on the U.N. Security Council to
frustrate efforts to halt genocide in Darfur and to slow international action to curb Iran's nuclear ambitions,
Beijing sees international policies of limited efficacy that might jeopardize its oil supply.
So far, China has weighed its oil interests against the interests of the international community on a case-by-
case basis. In the case of Sudan, the scales have tipped in favor of oil. Beijing weakened the language of at
least one Security Council resolution to punish the Sudanese government for the atrocities in Darfur, but
recently agreed to the deployment of U.N. forces there if supported by the African Union. In the case of Iran,
which requires balancing competing interests such as oil, regional stability, and the Sino-American
relationship, Beijing has sided with the international community to date. China voted as a member of the
board of governors of the International Atomic Energy Agency in February, under pressure from Washington,
to report the Iran nuclear issue to the U.N. and supported the July 31 Security Council resolution threatening
sanctions if Iran does not halt uranium enrichment. However, deeper energy ties to Iran (the No. 2 holder of
global oil and gas reserves) might tempt Beijing to tip the scales in the other direction.
Indeed, the risk for Washington is that China's growing dependence on imported oil will increasingly prompt
Beijing to give higher priority to oil than to international issues such as the protection of human rights,
nuclear nonproliferation, and good governance. So the challenge for America is to persuade Beijing to satisfy
its oil demand in ways that do not support states whose behavior violates international norms. This is easier
said than done. Oil plays an ever more prominent role in China's diplomacy. And Beijing's assessment of what
constitutes bad behavior by other states and how it should be dealt with often differs from Washington's. The
best bet for the U.S. is to encourage China to act like the responsible emerging power it claims to be. Time
may be on Washington's side. As China's global influence continues to grow, the international community will
expect China to back up its words with actions.

U.S. and China are set to clash unless they see eye to eye on energy security
Birmingham Post 4 December 2006 The China institute
As the world's top two oil guzzlers, the United States and China should have lots in common when it comes to
energy policy.
But US experts see a difference in how the two countries view energy security, one that could undermine
economic co-operation as the global titans vie for limited oil supplies.
"Everybody's in favour of energy security," said Daniel Yergin, an expert at Cambridge Energy Research
Associates. "There's just a wide difference on what does energy security mean."
To US politicians, including President George W. Bush, it means cutting US import dependence by promoting
home-grown fuels like ethanol, and reducing the risk of price shocks by relying on a variety of sources and
suppliers.
To Beijing, it means locking up secure supplies in multibillion dollar deals, such as the ones cut in recent years
in Venezuela and Canada.
More recently, China has sought closer economic ties with Saudi Arabia, which has shared an oil-for-security
relationship with Washington for decades.
Karen Harbert, assistant secretary for policy and international affairs at the US Energy Department, said the
United States and China "still have a way to go" in finding common ground.
"It is certainly clear at this point in time that we define energy security differently," Ms Harbert said.
"We define it as having a supply of reliable, affordable energy, and they define it as having secure access and
owning access to that product."
US officials have met frequently with Chinese counterparts to push initiatives in oil technology and efficiency,
and emphasise their belief in the importance of allowing the market to set global energy prices.
For Ms Harbert, China's soaring demand for energy is not a concern in itself, but its willingness to overpay for
crude oil is.
Because Chinese companies have direct access to government coffers, they can afford to outbid international
majors and offer sweeteners like airline deals and arms contracts that private companies can't produce.
For William Overholt, director of Rand's Center for Asia Pacific Policy, a prime driver behind China's oil hunt
has been its rising dependence on imports.
"The Chinese are new to importing oil and they're terrified," Mr Overholt said.
"Their response has been to buy as many oil companies around the world as possible."
The United States is the world's biggest oil user, consuming about 20 million barrels per day. But domestic oil
demand in China, the
world's fourth-largest economy, is expected to rise by six per cent this year, double the pace in 2005,
compared with slightly negative US demand growth.
Global energy demand is expected to hit 118 million barrels per day by 2030 versus 85 million bpd in 2006,
and the United States, China and India will account for half of that growth.
While Saudi Arabia will supply many of the extra barrels that China will consume in coming years, officials
there seek to play down US worries.
US experts say Washington and Beijing have reached a fork in the road which could either lead to long-term
cooperation or competition.
"The Chinese government is enormously preoccupied with energy security these days," said Paul Saunders,
executive director of the Nixon Centre. "It's one of those issues that has great potential to be either a big plus
or a big minus in Chinese relations."
Kang Wu, a senior fellow at the East-West Center in Honolulu, which studies issues of common concern to Asia
and the United States, says: "On the positive side, both are consuming countries - you could do something
there. On the other hand they are also competitors for oil. You could potentially clash."
But, he said US officials increasingly equate energy security and national security, which emphasises non-
economic goals over trade and bilateral cooperation.
"National security often means national policy and nationalism," he said. "There may be more competition
than cooperation."

CHINESE ENERGY SECURITY POLICIES OF BUYING OUT COMPANIES HAS STRAINED US-CHINA RELATIONS
The OBSERVER Nick Mathiason July 3, 2005 “The energy crunch: Beijing buying spree sends Uncle Sam into
shock: China syndrome”
Lexis
THE ENEMY has landed. One of the worst nightmares of 'patriotic Americans' may soon come true. An
unsolicited $ 18.5 billion offer from state-owned Chinese oil firm CNOOC to buy Unocal, America's ninth
largest oil firm, has given a nation obsessed with energy security a shock.
US-Sino relations are already tense - and this could be the moment the world realises a rival superpower to
America has come of age. Last Thursday as Chinese executives stalked Wall Street to get their bid accepted
by Unocal, Congress voted 398-15, backing a resolution that Chinese ownership of Unocal would 'threaten to
impair the national security of the United States'. Furthermore, approval by Unocal's board of the bid should
result in a 'thorough review' by President Bush.
With the issue setting Beijing against the White House, Unocal's shareholders are caught in the headlights.
The question is whether they have the courage to take Chinese cash that values Unocal's shares at $ 67 -
especially as there is an agreed offer from US major Chevron on the table worth $ 60 per share that comes
without political complications.
Chinese officials were last week in New York on a charm offensive downplaying Unocal's strategic importance.
By emphasising that it supplies a tiny fraction of America's domestic output, CNOOC argues that Unocal's
takeover cannot represent a US security threat. It is Unocal's oil and gas in Asia that the company prizes.
But the deal would also give China a 9 per cent stake in the BP-led consortium building the $ 6bn Baku-Tiblisi-
Ceyan oil pipeline, a project aimed at easing US reliance on the Middle East for oil.
Wall Street oil analysts agree that what makes Unocal a must-have is the technical expertise that will allow
CNOOC to compete for giant gas and oil exploration projects. 'Unocal has been portrayed as a state-controlled
resource grab, which is silly,' said a CNOOC spokesman. 'In the US just 1 per cent of US domestic
consumption is from Unocal. And at least 73 per cent of its assets are in Asia.'
Critics of the Chinese not only cite US national security but argue that the deal acts against basic free-market
principles, because $ 13 billion of the $ 18.5bn Chinese offer comes in government-backed loans, amounting
to state aid. 'Frankly it's not a level playing field,' said one US analyst.
The Chinese state media last Thursday admitted the size of the loans to buy Unocal could put downward
pressure on the yuan. This will exacerbate US concern over Chinese imports. Beijing has been under pressure
to allow the yuan, pegged near 8.28 to the dollar, to float freely, with the US and others saying the exchange
rate is artificially low, giving prolific Chinese exports an unfair advantage.
But there are suggestions from Treasury Secretary John Snow and Federal Reserve Board Chairman Alan
Greenspan that Beijing will soon allow the value of the yuan to rise. Although this will prove politically
expedient in the light of the Unocal transaction, it will also make US bid targets cheaper for the Chinese.
Could Unocal be the start of a further Chinese hoovering up of Uncle Sam's assets?
Whatever the outcome, the world's two superpowers are on collision course over crude oil. Dave Simpson,
America's acting deputy secretary of commerce, recently said: 'We appear to be competing more than
partnering.' That competition is getting hotter. Only last week, consolidation in the Chinese oil industry saw
the creation of its largest private oil enterprise, Great United Petroleum Holding Co, from more than 30 small
and medium-sized private oil companies. It also emerged last week that China National Petroleum is poised to
bid for Petro-Kazakhstan, the Canadian-based oil producer.
China's spending on oil assets has been accelerating this year. Last January, Canadian Prime Minister Paul
Martin visited China to discuss Chinese access to the Alberta tar sands. The summit yielded a crucial
production-sharing agreement. In the same month, China National Petroleum Corporation signed a deal with
Peru to study exploration deals. In all, it is thought Beijing has signed agreements worth $ 100bn with Latin
America. In February, Venezuala and China signed 19 agreements, including investment in Venezualan oil
fields.
During the Nineties, Chinese petroleum consumption increased at a compound annual rate of 6.3 per cent but
its oil production only grew at a compound annual rate of 1.7 per cent and since 1996, it has been a net
importer of oil.
CNOOC's bid will inevitably face delays, whereas shareholders have the option of taking Chevron's money at
a vote on 10 August. But Unocal's share price, which on Friday closed at $ 6*, implies the market either thinks
CNOOC will win or that Chevron will sweeten its offer. CNOOC executives have just six weeks to overturn
Unocal's recommendation of Chevron's offer.


U: CONFLICT NOW – SEA LANES
The US, China and India are struggling for sea lanes to export and import oil
through.
Agence France Presse October 04, 2006 US, China, India flex muscle over energy-critical sea lanes
The United States, China and India are moving to assert control over the sea lanes through which they receive
critical energy supplies amid fears in Beijing of a US blockade of the Malacca Strait in the event of a crisis
over Taiwan, experts said here.
The United States at present has vast control over the major so-called "choke points" on the world's sea
lanes, said experts at a recent forum in Washington.
Almost all of China's energy imports are obtained through sea and it is worried the United States could hold
its oil supply hostage.
Beijing is also concerned over its gradually weakening position in the Indian Ocean as New Delhi develops
new generations of weapons systems with US support.
Moreover, China's naval modernization has focused largely on preparing for possible armed conflict over
Taiwan than defending its very long sea lanes, experts said.
While it may be difficult for the US navy to interrupt China's sea lanes, "these appear vulnerable" in the eyes
of the Chinese military, said Bernard Cole of the US National War College.
He said China's energy routes were most vulnerable not on the high seas, but at transit points through
several narrow straits.
They include Hormuz at the mouth of the Perian Gulf, the 9-Degree Channel in the Northern Indian ocean,
Malacca and Luzon straits in Southeast Asia, and the Taiwan Strait, a possible battleground between China
and the United States.
"The most likely tactic for the United States to employ would be a blockade of Chinese oil port terminals, or of
these choke points," Cole said.
But should the United States attempt to interrupt the sea lanes, "it would almost certainly mean directly
attacking China, directly attacking other nations, interfering with the peacetime passage of third-country
tankers at sea, or all of the above," he warned.
Chinese strategists have expressed fear in recent reports that in the event of a crisis between Washington
and Beijing over Taiwan, the United States could blockade the Malacca Strait and hold 80 percent of Chinese
energy imports hostage.
As evidence of such a scenario, they pointed to Washington's so called regional maritime security initiative in
the Malacca Strait as a first step by the US military to "garrison the Strait" under the guise of "counter-
terrorist measures."
Beijing regards Taiwan as a renegade province awaiting reunification but any attack on the island could see a
response from the United States, which is bound by law to help defend Taipei.
"A focus of Chinese concern has been on the security -- or, more properly, the insecurity -- of the sea lines of
communication upon which almost all of China's energy imports travel," said Daniel Blumenthal, a former
senior Pentagon official eyeing China's growing military might
China's strategists, he said, were aware Beijing did not exercise naval superiority through the seas linking its
ports to the major oil prodcers in the Middle East.
They also know that China was dependent upon the United States and other major powers on ensuring the
safe flow of its energy imports, he said.
"If China truly does not trust the US and its allies to provide for the security of the SLOCs (sea lines of
communication) and is too suspicious to join in common efforts over the long term, it must develop the
military capabilities to challenge them," Blumenthal said.
Some Western experts believe China is attempting to develop naval capabilities that would allow it to provide
security for its oil shipments and project power into the Indian and Pacific oceans.
The Pentagon has identified a so-called Chinese "string of pearls" strategy in which a network of bases along
sea lanes is being set up.
While pursuing this, China is suspicious the United States would use India, with its powerful navy, as a
potential balancing force against it.
The two democratic allies are already carrying out joint anti-terror patrols along the Malacca Strait, straddling
Malaysia, Indonesia and Singapore.
"The strategic consequences of India's growing naval power are clear. Every additional barrel of oil that China
imports leaves Beijing more vulnerable to a disruption of the sea lanes," said Christopher Griffin of the
American Enterprise Institute, a Washington based think tank.\
"If Delhi's naval modernization effort turns the Indian Ocean into India's ocean, the risk for Beijing may grow
unacceptable," he said.

U: CONFLICT NOW – IRAN
China has a 2 billion dollar oil contract with Iran after the US urged China to stop
trading with Iran
AFP NEWS Dec 9, 2007 “Iran, China finalise two billion dollar oil contract”
TEHRAN (AFP) — Iran and China’s Sinopec on Sunday signed a two billion dollar contract to develop a major
Iranian oil field, a crucial deal for the Iranian energy industry at a time of mounting international pressure.
The Iranian oil ministry and Sinopec inked the deal to pump oil from the Yadavaran onshore field in
southwestern Iran, which was first agreed back in late 2004, at a ceremony in Tehran, an AFP correspondent
reported.
“The initial estimation of cost of the project is about 2.0 billion dollars and the final cost of the project will be
decided after the offering of the tenders,” said Iranian Oil Minister Gholam Hossein Nozari.
The field will be producing 185,000 barrels of oil a day within the next seven years, he added.
The signing came at a time when the United States has been pressuring European and Asian firms, including
oil majors, to cut their business ties with Iran to exert pressure on the Islamic republic in the nuclear crisis.
“The signing shows that there is no lack of investment in Iran and we are solidifying our economic relations
with China more,” said Nozari.

U: CONFLCIT NOW – IRAN
The US is threatening all businesses that continue to trade with Iran including
Chinese oil businesses.
The New York Times 21 March 2007
U.S. Cautions Foreign Companies on Iran Deals
Administration officials say the reason no decisions have been made on whether to invoke or waive sanctions
is that the energy exploration deals by Shell, Repsol, China, Malaysia, China and Pakistan are all still in an
embryonic stage and that it is better to head them off by using persuasion than penalties.
But they also say that the administration does not want to take any action now that would divide the United
States from its allies in Europe on Iran, or to provoke China, India and Pakistan, whose support Washington
needs for other foreign policy objectives.
A senior European envoy involved in discussions over Iran said that Europeans would be unhappy with
American sanctions against private oil companies, but that they also understood the importance of pressing
the Tehran government. 'As long as we want to avoid a war with Iran, we have to try sanctions,' he said.
The steps being contemplated are part of a web of pressures, American and European officials say, which
could be invoked in coming months. These include plans to sanction more Iranian banks, beyond the two that
have already been hit by sanctions and barred from obtaining dollars from American banks.
The aim, American officials say, is to prevent Iran from obtaining dollars, the world's reserve currency, for use
in the purchase of goods or services. Iranian leaders have said that American sanctions are forcing them to
sell oil for euros or other currencies, even though oil is traded on the international markets in dollars.
In a separate set of actions, American and European officials say that recent pressure on European
governments has led several to reduce or to pledge to reduce their government-backed credit guarantees for
deals with Iran.
Germany had $6.2 billion in outstanding export credits to Iran as of 2005, according to figures circulating at
the United Nations. But Germany reported recently that after cutting back credits by 60 percent in the last
two years, it planned further cutbacks this year.
Japan, which had $1.9 billion in credits as of 2005, has also informed the United States that it has granted no
medium- or long-term credit insurance since last June and has cut short-term credits. American officials say
they have received similar pledges from Italy and France to cut back their export credits.

U: CONFLICT NOW – CLIMATE
In the Status Quo The US and China will inevitably conflict due to climate change
Harry Harding May 28 2008 http://www.rieti.go.jp/en/rieti_report/095.html in a rieti international seminar
"Assessing Risk in U.S.-China Relations: Trade, Investment, Climate Change"
Before assuming his current position, Dr. Harding served as the Dean of the Elliott School of International
Affairs and as Professor of International Affairs and Political Science at the George Washington University
from 1995-2005. His areas of expertise include Chinese domestic politics, Chinese foreign policy, U.S.-China
relations, and international relations in the Asia-Pacific region. He served on the faculties of Swarthmore
College (1970-'71) and Stanford University (1971-'83), and was a Senior Fellow in the Foreign Policy Studies
Program at the Brookings Institution (1983-'94). In 2005-'07, he was Director of Research and Analysis at
Eurasia Group, a political risk research and consulting firm headquartered in New York, and he remains a
Counselor to the firm and the Chair of its China Task Force. Dr. Harding is also a Visiting Fellow at the Asia
Society Center on U.S.-China Relations. He received his Ph.D. and M.A. in political science from Stanford
University and his B.A. in public and international affairs from Princeton University.
On the controversy over climate change, three scenarios were envisaged. The most likely one is a "failure to
agree" on a package, which might lead to the U.S. imposition of carbon tariffs, known as "border adjustment
mechanisms," on imports from China. Japan would have to deal with the consequences of any "carbon trade
war." A slightly less likely scenario is "orchestrated obstruction," a kind of negative cooperation in which the
U.S. and China continue to agree to block the rest of the world's attempts to impose mandatory emission
limitations on either country. In this scenario, Japan may find itself able to evade pressure for further emission
reductions. The least likely scenario is a "collaborative push for a climate change regime," which would entail
agreement on mandatory targets, financing, and technology transfer. Were this scenario to be realized, Japan
would be expected to become even more efficient.
To summarize, the U.S.-China relationship is a very complex blend of vulnerability and resilience. That is why
it is so difficult to come up with any clear, unequivocal forecast for the future of U.S.-China relations. The
most likely scenarios involve moderate levels of risk: they are more or less continuations of the status quo.
The least likely scenarios are the most optimistic ones.

U: CONFLICT NOW – PRICES
Chinas control over oil prices further strains US-China relations

Reuters September 15, 2006 “U.S. presses China on energy prices”
BEIJING, Sept 15 (Reuters) - The United States pressed China to ease price caps on oil and power in talks this
week aimed at bridging differences between the world's two largest energy users, a senior Washington
energy official said on Friday.
Assistant Secretary for Policy and International Affairs in the U.S. Department of Energy, Karen Harbert, said
in Beijing she urged Chinese officials to lift price caps on energy that she said deterred investment and
distorted consumption.
China's restless efforts to secure oil and gas across the globe, including from Iran, Sudan and other countries
under U.S. pressure, have stirred predictions of volatile energy friction between Washington and Beijing.
But Harbert said China's strained energy infrastructure and price controls, not diplomatic rivalry, were the
focus of the second ever US-China Energy Policy Dialogue this week.
"Competition for resources is not really an issue," she told Reuters in an interview.
"We're not quite as close as one could be in our belief in the fundamentals of market principles," she added.
China restricts domestic gasoline and diesel prices to among the lowest in the world to shield consumers and
stifle inflation but international companies say these caps scare off investment.
"We talked at great length about the amount of investment that will be required here in China to realise their
economic and energy needs, and that they must have the legal and regulatory policies in place to attract the
investment," she said.
"We are interested in seeing the Chinese government look at their pricing policies and their cap on prices,
which certainly puts a strain on return on investments in this country."
Price concerns and market access were a main hurdle slowing down U.S. firm ExxonMobil , the world's largest
oil and gas company, from finalising a refinery deal with China's Sinopec Corp. after years of negotiations,
industry officials have said.
OIL RESERVES
China's first emergency tanks totalling 33 million barrels would be ready for use next month, part of its plan
to set up a strategic petroleum reserve that last a month's use but uncertainties about the purpose of the
reserve and when it will be filled have ruffled international markets.
Washington taps its reserves only to cope with severe supply disruptions, not to correct price fluctuations,
Harbert said. But China has yet to decide when it would draw on its reserves.
Chinese officials said they would be careful not to alarm global markets as they begin to buy petroleum for
the clusters of storage tanks along the country's coast, Harbert said.
"They would not seek to upset or drive any prices up by purchases on the open market."
China is seeking to diversify away from heavy dependence on coal-fired power and plans to rapidly expand
nuclear sector.
Beijing is weighing rival bids from Russia, France and the United States to build a new generation of nuclear
plants.
Pittsburgh-based Westinghouse Electric Co. , now owned by Japan's Toshiba Corporation, is offering its new-
breed AP1000 model.
Chinese officials said they were still interested in the Westinghouse design and there would be a decision on
bids for four new reactors, worth about $8 billion, by the end of the year, Harbert said
China, the world's second largest energy consumer, plans to build around 30 new nuclear reactors by 2020,
bringing its installed nuclear capacity to 40 gigawatts.
Reaching China's ambitious goal of improving energy efficiency by 20 percent in the next fives years may also
require upgrading China's energy administration, which at the moment does not even have its own ministry.
"They are very serious about it, and now they have to actually figure out how to achieve it," Harbert said of
China's efficiency goal.

U: AT: CHINA ALT ENERGY SOLVES
BECAUSE CHINA IS STILL A DEVELOPING COUNTRY, IT CANNOT TRANSITION AWAY FROM OIL ALONE AND WILL
CONTINUE TO BUY OIL COMPANIES
The Strait Times August 25, 2005 “Energy contest gets tighter” Lexis
IF YOU can't buy American, buy Canadian. That, at any rate, is what the Chinese have done. Having failed
to acquire the American Unocal oil company recently, a large state-owned Chinese energy company has
agreed to pay US $4.18 billion (S$7 billion) for a Canadian company with substantial reserves in
Kazakhstan, against a possible bid by an Indian firm. The Chinese probably offered more than the asset
was worth - as much as a 21 per cent premium, according to one estimate - and it is not clear if the
Indian company will not up the ante with a counter-offer. All this shows that energy has become as much
a security issue as it is an economic issue. In the early 20th century, Britain and Russia engaged in the
so-called 'Great Game', competing for influence in Central Asia. In the early 21st century, China and India
have joined the United States in that game. Should the world worry?
The short answer is 'no, but...'. No, because the oil market is a single market, with supply (as well as
prices) responsive to global demand. China can ensure its access to certain oilfields - as has the US for
close to a century - but that will only mean that there will be more from other oilfields for the rest.
Barring a major power choking off vital supply routes for strategic advantage, oilfield ownership patterns
need not in themselves be destabilising. But there is still that 'but' - a nagging sense that the competition
for energy resources could get out of hand and become a casus belli. Notwithstanding the alarmist
rhetoric of some in the US, the competition is nowhere near that stage, but prudence would suggest the
major powers should act now to head off potential future conflicts.
They can do two things. One, reduce their dependence on oil and aggressively pursue alternative energy
sources. Ironically, China, still a developing country, is doing more in this regard than the US, where
Congress recently passed an energy Bill that did little to raise energy efficiencies. Two, the major powers
can cooperate, jointly exploring new oilfields, sharing technology, developing nuclear energy and
investing in alternative energy sources. If oil becomes less crucial, there would be no need to fight over
it. US President George W. Bush and Chinese President Hu Jintao might explore these possibilities when
they meet next month. The 'great game' need not be a zero sum game; it can have a win-win outcome.

L: SANCTIONS
US Sanctions on Chinese oil companies hurt the overall relationship

South China Morning Post 23 February 2008 Compliance and control topics with Scott Lane Sinopec may
still face US sanctions
An interesting case study in corporate compliance came to light last month when Chen Tonghai, the former
chairman of mainland oil company Sinopec, was expelled from the Chinese Communist Party (CCP) after
being accused of taking a "huge amount" in bribes.
Chen was the chairman of Sinopec until June last year when he abruptly resigned. The CCP Central
Commission for Discipline Inspection and the Ministry of Supervision announced late last month that Chen
was expelled from the party and civil service.
The official Xinhua news agency stated that: "Chen took a huge amount of bribes and abused his power to
gain inappropriate benefits for himself and his mistress ... His behaviour is a severe breach of party
discipline." Chen is now facing criminal prosecution.
While this kind of description is fairly standard in the Communist Party's crackdown on corruption, one thing
that stood out was that Sinopec is also a foreign issuer on the New York Stock Exchange.
Being a foreign issuer on a US exchange means that Sinopec is subject to certain laws in America, particularly
the Foreign Corrupt Practices Act (FCPA) and the US Exchange Act, which regulate payments made outside
the United States by US companies or foreign issuers.
While reports allege that Chen received bribes and inappropriate benefits, if he ever made or authorised
illegal payments to win deals and receive some form of kickback, Sinopec could be in contravention of the
FCPA.
Whether the US government, through the Securities and Exchange Commission or the US Department of
Justice, will investigate any allegations of corrupt practices by Chen or Sinopec remains to be seen. It would
not be the first time that the US government has acted against a foreign issuer which has allegedly made
illegal payments to win business. In 2006, Statoil, a state-owned Norwegian company that was also a foreign
issuer in the US, settled with the US government for allegedly paying bribes in Iran. When high profile or large
companies are indicted on corruption, it is prudent business practice to check your own company's dealings
with the alleged offender.
Illegal payments Check all payments to the company concerned. Scan your vendor list for names of their
senior executives. Ensure that they, their family and any company which they are associated with, are not a
vendor of your company. This process requires forensic analysis by an investigation or due diligence firm. It
would be necessary to do a 'reverse director' check in multiple countries to trace what companies these
executives, or their family members, may be a director or legal representative.
Expense claims The most common way to give expensive gifts or hospitality is for your staff to process that
payment through an expense reimbursement process. Identify any staff or management in your company
that would have had interactions with the company in question, and see whether there have been any gifts or
lavish entertainment provided to them. Check any expense claims around the period in which your company
may have been doing deals with the business in the spotlight. Check all of the sales and engagement staff
and any manager that may have been involved in the transaction.
Deals Check any deal transaction logs or files to see if there was any lavish entertainment or payments to
'consultants', 'agents' or 'intermediaries'. This may be a red flag that funds could have been diverted through
side companies. All deal files, deal approvals, pricing approvals, contracts and any pre-contract travel and
entertainment should be reviewed. You may need help from due diligence firms to test whether companies
that you identify are there for an illegal purpose or whether they are legitimate third parties.
Travel Check that your company has not paid for travel for any senior executives at the said troubled
company. Company funded travel is a standard way of offering incentives and lavish gifts.
Scott Lane is the principal of The Red Flag Group, a Hong Kong-based ethics and compliance consultancy.

I: MISCALC/WAR
THE US AND CHINA ARE GOING TO GO TO WAR OVER OIL, HOWEVER A HUGE SWITCH TO ALTERNATIVE FUELS
FOR VEHICLES CAN STILL SOLVE THE PROBLEM
(Dr. Gal Luft 2004 is executive director of the Washington, DC based Institute for the Analysis of Global Security (IAGS). He
specializes in strategy, geopolitics, terrorism, Middle East and energy security. He has published numerous studies and articles on
security and energy issues in various newspapers and publications such as Foreign Affairs, Commentary, Middle East Quarterly, Middle
East Review of International Affairs, LA Times, The Washington Post and The Wall Street Journal. He has given numerous media interviews
to various news organizations such as CNN, FOX News, NBC, ABC and NPR and consulted to various think tanks and news organizations
worldwide. He is an associate fellow at the Washington Institute for Near East Policy and is the author of The Palestinian Security Forces:
Between Police and Army (Washington DC, 1998). Luft is a former lieutenant colonel in the Israel Defense Forces. In his military career,
commanded battalions in southern Lebanon, the Golan Heights, and YESH”A (Judea, Samaria and Gaza) and worked with the Palestinian
Authority since its inauguration in 1994. Dr. Luft holds degrees in international relations, international economics, Middle East studies and
strategic studies. He holds a doctorate in strategic studies from the Paul H. Nitze School of Advanced International Studies (SAIS), Johns
Hopkins University) February 4 2004, LA Times opinion section http://articles.latimes.com/2004/feb/02/opinion/oe-luft2
Sixty-seven years ago, oil-starved Japan embarked on an aggressive expansionary policy designed to secure
its growing energy needs, which eventually led the nation into a world war. Today, another Asian power thirsts
for oil: China. While the U.S. is absorbed in fighting the war on terror, the seeds of what could be the next world war are
quietly germinating. With 1.3 billion people and an economy growing at a phenomenal 8% to 10% a year, China, already a net oil
importer, is growing increasingly dependent on imported oil. Last year, its auto sales grew 70% and its oil imports were up 30% from the
previous year, making it the world’s No. 2 petroleum user after the U.S. By 2030, China is expected to have more cars than the U.S. and
import as much oil as the U.S. does today. Dependence on oil means dependence on the Middle East, home to 70% of
the world’s proven reserves. With 60% of its oil imports coming from the Middle East, China can no longer
afford to sit on the sidelines of the tumultuous region. Its way of forming a footprint in the Middle East has
been through providing technology and components for weapons of mass destruction and their delivery
systems to unsavory regimes in places such as Iran, Iraq and Syria. A report by the U.S.-China Economic and
Security Review Commission, a group created by Congress to monitor U.S.-China relations, warned in 2002
that “this arms trafficking to these regimes presents an increasing threat to U.S. security interests in the
Middle East.” The report concludes: “A key driver in China’s relations with terrorist-sponsoring governments is
its dependence on foreign oil to fuel its economic development. This dependency is expected to increase over
the coming decade.” Optimists claim that the world oil market will be able to accommodate China and that,
instead of conflict, China’s thirst could create mutual desire for stability in the Middle East and thus actually
bring Beijing closer to the U.S. History shows the opposite: Superpowers find it difficult to coexist while
competing over scarce resources. The main bone of contention probably will revolve around China’s relations
with Saudi Arabia, home to a quarter of the world’s oil. The Chinese have already supplied the Saudis with
intermediate-range ballistic missiles, and they played a major role 20 years ago in a Saudi-financed Pakistani
nuclear effort that may one day leave a nuclear weapon in the hands of a Taliban-type regime in
Riyadh or Islamabad. Since 9/11, a deep tension in U.S.-Saudi relations has provided the Chinese with an opportunity to win the
heart of the House of Saud. The Saudis hear the voices in the U.S. denouncing Saudi Arabia as a “kernel of evil” and proposing that the
U.S. seize and occupy the kingdom’s oil fields. The Saudis especially fear that if their citizens again perpetrate a terror attack in the U.S.,
there would be no alternative for the U.S. but to terminate its long-standing commitment to the monarchy – and perhaps even use
military force against it. The Saudis realize that to forestall such a scenario they can no longer rely solely on the U.S. to defend the
regime and must diversify their security portfolio. In their search for a new patron, they might find China the most fitting and
willing candidate. The risk of Beijing’s emerging as a competitor for influence in the Middle East and a Saudi shift of allegiance are
things Washington should consider as it defines its objectives and priorities in the 21st century. Without a comprehensive strategy
designed to prevent China from becoming an oil consumer on a par with the U.S., a superpower collision is in the cards. The good news is
that we are still in a position to halt China’s slide into total dependency. Unlike the U.S., China’s energy infrastructure is largely
underdeveloped and primarily coal-based. It has not yet invested in a multibillion-dollar oil infrastructure. China is therefore in a better
position than the U.S. to bypass oil in favor of next-generation fuels. The U.S. should embark on a frank dialogue with
China, conveying to the Chinese the mutual benefits of circumventing oil and offering any assistance required
to curb China’s growing appetite for it. A shift from oil into other sources of transportation energy – such as
bio-fuels or coal-based fuels, hydrogen and natural gas – could prevent future conflict and foster
unprecedented Sino-American cooperation with significant economic benefits for both countries. The Chinese
would probably leapfrog oil if they could. Dependency of any kind is foreign to their culture. But
without substantial American technological support, China is likely to follow the path of least resistance and
become a full-fledged oil economy. Failure to address the issue with the utmost care would undercut all
of today’s costly efforts by the U.S. to reform and stabilize the Middle East. This explosive, complex region
cannot accommodate two major powers competing not only over a barrel but also over the hearts, minds and
allegiance of its people.

Perceived threats to Chinese oil resources will also result in war

Hatemi, Professor at the University of Nebraska-Lincoln, 2007 (Peter, “Oil and Conflict in Sino-American
Relations,” China Security, Summer, Volume 3, Number 3)
An important consequence of lateral pressure is the action-reaction process wherein one antagonistic activity
(perceived or real) leads to a counteraction by the competing state. Activities that may be generated by one
state due to considerations other than resource security, but that affect the resource security of another
state, could also be perceived as a threat even though no threat was intended. The most important of these
interactions is when the expanding activities and interests of two high-capability, high-lateral pressure states,
such as the United States and China, collide. If the activities of either nation are perceived as threatening, the
two may be caught in a security dilemma, wherein reciprocation of antagonistic actions may lead to war

I: IRAN SANCTIONS SCENARIO
Through their power to veto, Chinese economic ties with Iran safe guard Iran
from real sanctions
Antoaneta Bezlova (IPS correspondent.) Published Nov 29 2004 by Asia Times(China-Iran tango threatens US
leverage)
How China's energy hunger safeguards Iran

Regardless of the deal, the success of any UN action against Iran hinges on Beijing's support, as it is one of
five permanent members of the UN Security Council with veto-yielding power. And China, which has
longstanding ties with Iran, just happens to be searching for new energy reserves to drive its booming
economy.
Iranian Petroleum Minister Bijan Zandaneh told China Business Weekly recently that Tehran wants China to
replace Japan as the biggest importer of its oil and gas. "Japan is our No 1 energy importer due to historical
reasons, but we would like to give preference to exports to China," Zanganeh commented during his visit to
Beijing in late October.
Earlier this month, Chinese Foreign Minister Li Zhaoxing, who has just crowned a year of negotiations
between the two countries, paid a rare visit to Tehran. In a meeting with Iranian President Mohammad
Khatami, Li said Beijing would oppose US efforts to refer Iran to the UN Security Council over its nuclear
program.
The Chinese foreign minister also told Khatami he had discussed Iran's nuclear issue with US Secretary of
State Colin Powell and British Foreign Secretary Jack Straw, and made it known to them that Iran was
cooperating well with the IAEA. According to Li, referring Iran to the Security Council would only make things
more complicated.
While commercial contacts between Beijing and Tehran are at the core of the relationship, and are set to grow
significantly, wider geopolitical elements are also coming into play. Russia, India and other states may be
encouraged to break ranks on the nuclear issue if they see China profiting from a strategic relationship with
Iran. Japan, which is even more reliant than China on oil imports, might be unwilling to cede its share of Iran's
resources to Beijing and would likely resist US pressure to punish Tehran for nuclear proliferation. There are
indications that Tokyo might oppose Washington's efforts to apply sanctions in a bid to force foreign
companies to pull out of Iran's oil fields.
China, which has become the world's second largest oil importer over the past decade, currently gets 13.6%
of its oil imports from Iran. Beijing has said it also wants to step up imports of Iran's natural gas. Trade
between the two countries hit a record US$4 billion in 2003 - with Iran exporting crude worth $2.5 billion to
China.
"As China's booming economy has turned the country into one of the biggest oil consumers in the world, Iran
- as OPEC's [Organization of Petroleum Exporting Countries'] second-largest crude oil supplier [after Saudi
Arabia] - can only be a natural partner for China," Zanganeh told China Business Weekly.
Iran has an estimated 26.6 trillion-cubic-meter gas reservoir, the second largest in the world. One of China's
four major state oil companies - the Sinopec Group - is being invited to prepare a master plan for the
development of the giant Yadavaran gas field. This means a comprehensive development, including
exploration and drilling, petrochemical and gas industries, pipelines and other services.
In return, Sinopec Group will buy 250 million tonnes of Iranian liquefied natural gas over 25 years. The deal,
outlined in an October 28 memorandum of understanding between the two sides, is the largest Iran has
signed since 1996. The Yadavaran deal could well be worth between $70 billion-$100 billion and could help
propel Sinopec into the ranks of the world's major oil players.
In the long term, Beijing also hopes to secure a pipeline project in Iran taking oil 386 kilometers to the
Caspian Sea where it could link with another planned pipeline from Kazakhstan to China.
For its part, Tehran is turning to China to build motorways and underground railway lines in the Iranian capital.
After completing the first stage of the Tehran Metro, China North Industries Corp (NORINCO) - Beijing's
military-run industrial and trade conglomerate - will build a second line in a contract worth $836 million.
NORINCO beat Germany's Siemens and South Korean bidders for the 19-kilometer link and will be the top
contender to build four other planned lines, including a 30 kilometer track to the airport.
Meanwhile Iran's increasing appetite for consumer goods is bound to provide huge opportunities for Chinese
companies eager to expand overseas. For example, China's home-grown automakers' initial foray overseas
took them to Iran where Chery Automobile Co Ltd opened its first overseas production plant in the country in
February 2003. Today, the plant manufactures 30,000 Chery cars annually.
China and Iran are currently cooperating on 100-odd different projects, according to diplomats.
The economic ties between two of Asia's oldest civilizations will have broad political implications for the
United States. Beijing's inroads into Iran's energy sector will hamper US efforts to keep Tehran under pressure
through the economic embargo imposed in April 1995 under then president Bill Clinton and the subsequent
Iran-Libya Sanctions Act in August 1996, which sanctions companies that invest $40 million or more annually
in oil and gas projects in Iran or Libya.
US officials are also concerned that some Chinese firms may be supplying missile technology and dual-use
chemical weapons-related production equipment. In the past, Washington has applied sanctions against 13
foreign companies which have sold dual-use equipment or technology to Iran, including offshoots of
NORINCO.

I: IRAN SANCTIONS SCENARIO
Without sanctions on Iran, unchecked proliferation would spread through the

middle east
Graeme Paterson ASIA AND MIDDLE EAST NEWS ICIS Chemical Business America April 2, 2007
A NUCLEAR-armed Iran would enable it to project power over other oil-producing countries, impacting the
petrochemical industry, according to former US Ambassador to the United Nations John Bolton.Speaking at
the National Petrochemical & Refiners Association petrochemical conference last week, Bolton said the risk
of Iran having nuclear weapons could lead to other countries in the region seeking to acquire them.In his
speech, Bolton outlined the risks posed by Iran and North Korea and their goals to acquire weapons of mass
destruction."The risk of a nuclear Iran is not just about the adverse impact on the petroleum markets but
the proliferation risk that would impact even greater," said Bolton.The former ambassador said regime
change in both countries was the only way to halt their respective nuclear ambitions.The UN Security
Council has imposed sanctions on Iran over its continuing nuclear program.The UK government last
Tuesday was seeking talks with the country after 15 Royal Navy personnel were seized by Iran after
searching a boat off the coast of Iraq.Oil prices climbed above $63/bbl last Monday, the highest level so far
this year, in response to that incident and to gasoline supply concerns. Bolton was ambassador to the UN
August 2005 to December 2006.
And, Chinese exports of Nuclear technology towards the middle East fuels
proliferation and will result in a nuclear war and extinction
The Statesman June 10 1998 China’s growing nuclear prowess
More serious, however, are Chinese exports of nuclear technology of which the principal beneficiary is
Pakistan. Gary Milhollin of the Wisconsin Project thinks that the Pakistani bomb would not have come about
without Chinese help which sounds plausible in view of the evidence publicly available. But all sorts of
things like reactors, heavy water, uranium have been sold to Iran, Iraq, Argentina, Brazil, India, North Korea
and South Africa and technicians have been trained as well. It is unlikely that China is trying to set up some
kind of a zone of influence hostile to American interests - in Pakistan, for instance, there is a durable
convergence of American and Chinese interests. Its concern may be with retaining an edge of superiority in
the region and also earn some hard cash in the bargain. The issue is not Chinese hegemony, but
proliferation in areas that are potentially and actually volatile, especially in the zone of tension that
stretches outwards from Israel. Already Pakistan is being congratulated for having finally manufactured an
Islamic bomb that can be used to counter Israel. The Americans may think that Indians and Pakistanis are
willing to blow each other to extinction, but a more likely candidate for a quick atomic resolution of conflict
is the Middle East, regimes there are more interested in nuclear militarisation than in any other part of the
world, primarily because the war mentality is more deeply rooted, both psychologically and historically. The
Americans need to take a serious look at the Chinese nuclear cafeteria.

I: IRANIAN SANCTIONS AND RELATIONS
The US and Iran are a zero sum game for China, either they can side with Iranian
Sanctions or not.
Globalsecurity.org Daniel Shearf 1/17/08 “US Diplomat to Push Beijing for New Iran Sanctions”
http://www.globalsecurity.org/wmd/library/news/iran/2008/iran-080117-voa01.htm
The United States' number-two diplomat says he will urge the Chinese authorities this week to support further
United Nations sanctions against Iran. But Iran has sent one of its own top officials to Beijing, presumably to
counter the U.S. arguments. Daniel Schearf reports from the Chinese capital.
U.S. Deputy Secretary of State John Negroponte has two days of meetings with Chinese officials scheduled
this week, and he told journalists in Beijing Thursday he will seek Chinese support for new sanctions against
Iran.
Negroponte will not have the Chinese to himself, however. Iran's chief nuclear negotiator, Saeed Jalili, arrived
in Beijing Thursday to give the Chinese Tehran's side of the argument.
Negroponte acknowledged a recent U.S. intelligence report that said Iran had suspended its nuclear warhead
design program. But he says it is possible Tehran might have restarted that program.
Either way, he says, Iran continues to produce nuclear material and missiles that could one day be used to
make a nuclear weapon.
"We think it's important that there be an additional Security Council resolution because Iran is out of
compliance with previously passed resolutions. And that is the argument that will be presented," he said.
Iran has refused to halt its program of uranium enrichment, despite prolonged negotiations with the European
Union on the topic, two U.N. resolutions condemning the program, and economic sanctions imposed against
it.
Iran says it is within its rights to develop nuclear energy for peacetime purposes, and insists it has no plans to
build nuclear weapons, contrary to what Western nations have suggested.
Top diplomats from the five permanent member nations of the Security Council, plus Germany, are to meet in
Berlin next week to discuss possible new sanctions against Iran.
The United States has been pushing for a third round of tougher sanctions, but China and Russia, both
permanent members with veto power in the Security Council, have been reluctant to lend their support.
China's Foreign Ministry spokeswoman, Jiang Yu, repeated Beijing's position Thursday.
Jiang says China hopes Iran abides by the U.N. Security Council resolutions, continues with a flexible attitude,
and cooperates with the international community.
Negroponte is in China for semi-annual meetings with Chinese officials on a range of international issues.
These will include Taiwan's planned March referendum on seeking U.N. membership, which China and the U.S.
have warned could increase tensions in the region.
Taiwan lost its seat in the U.N. in 1971 and the People's Republic of China was installed in its place. Taiwan's
independence-leaning president wants to regain U.N. membership.
Beijing considers Taiwan a breakaway province that must one day reunite with the mainland, and opposes
any action that would recognize Taiwan as independent from China.

S: COOPERATION POSSIBLE
A Chinese shift to alternative sources of energy is inevitable, the only question is

who gets there business.
The Wall Street Journal Asia 18 April 2007 Trying to sell clean energy in Asia --- U.S. companies hope to
drum up business during trade mission
Hong Kong -- AS INDIA AND CHINA pledge to spend billions of dollars on renewable energy, the U.S.
government is hoping to help American companies cash in on the cleanup of Asia's smoggy skies.
Representatives of more than a dozen U.S. companies, including General Electric Co. and DuPont Co., will
touch down today in the southern Indian city of Chennai to kick off a one-week trade mission to India and
China aimed at drumming up new business for America's burgeoning clean-energy industry. The companies
are selling technologies including solar power, energy-efficient building materials, clean coal, wind power as
well as more experimental power sources. One of these is a gasification technology developed by Utah-based
Emery Energy Co. that creates fuel from the organic matter in trash. The demand for energy alternatives in
Asia is creating a substantial business opportunity. The trade mission aims to capitalize on India's and China's
growing commitment to renewable energy, as the region's dependence on coal-fired power plants fuels
concern about global warming and air pollution. The Chinese government recently pledged to spend $200
billion on renewable energy and to make renewable energy account for 15% of the country's total supply by
2020 -- though such allotments are subject to change. The Indian government has made fewer concrete
commitments, but the market for renewable energy in India is estimated at $500 million a year and is
growing by 15% annually. The government already provides substantial tax breaks for wind energy, and a
wave of proposed state legislation would encourage other "clean tech" industries to make inroads there.
"Either we have a complete environmental collapse, or we have to quickly evolve the entire global economy
to a much more energy-efficient, resource-efficient and environmentally conservative model," says Andrew
Pidden, who co-manages a $42 million investment fund focused on the Asian clean-tech sector for CLSA Asia
Pacific Markets. The U.S. Commerce Department mission aims to address some of the roadblocks that have made it
difficult for U.S. clean-energy companies to crack markets in Asia, including concern over intellectual-property rights.
Some American clean-energy companies are reluctant to deploy their most cutting-edge technologies in Asia, from solar
panels to coal scrubbers, for fear their know-how will be copied. "It's a concern for anybody trying to export advanced and
novel technology to markets where they don't have strong regulatory systems around patent issues," says Benjamin
Phillips, president of Emery Energy, the Salt Lake City start-up that is marketing a proprietary system that can create a
biofuel from the organic waste in municipal garbage. The company aims to help cities in the developing world tackle
waste disposal and polluting power sources. Intellectual-property issues have become a growing source of friction
between China and the U.S., which last week said it was filing a complaint with the World Trade Organization over China's
level of copyright enforcement. "We need to make people understand that this is an environmental issue, too," says David
Bohigian, assistant U.S. commerce secretary, who is meeting with officials in Beijing during the week-long mission. "It's
affecting China's ability to clean up coal plants, because . . . U.S. companies don't want to export their best technology
there." Companies participating in the mission also hope to gauge the depth of the Indian and Chinese governments'
commitments to renewable resources to make sure promised support for clean energy materializes. "Renewable energies
tend to prosper in markets where the government provides strong support," says Martin Wenzel, senior vice president of
sales and marketing for Miasole, a Santa Clara, California, solar-power company. "If India and China want to turn these
programs on, they've got to make commitments in terms of resources and money." The participating companies reflect a
wide range of industries. DuPont will be showcasing technologies ranging from cellulosic ethanol, which is made from
nonfood sources, to Tyvek building wrap, a synthetic textile that can improve the energy efficiency of buildings. The clean-
energy mission is part of a wave of initiatives developed by the U.S. government that seek to harness the forces of the
free market to address Asia's environmental problems, creating business opportunities while dealing with global pollution
problems. The projects are part of the Asia-Pacific Partnership on Clean Development and Climate, an agreement among
six countries -- the U.S., China, India, Japan, Australia and South Korea -- that was organized as an alternative to the Kyoto
Protocol. Under the Kyoto pact, most developed nations agreed to limit their output of "greenhouse gases," such as
carbon dioxide, that trap heat in the Earth's atmosphere as if in a greenhouse. The U.S. declined to sign on to the protocol
because the pact placed no obligations on the developing world. The partnership calls for voluntary efforts to reduce
greenhouse-gas emissions. Commerce Department officials are promoting some novel financing structures to encourage
faster adoption of the technologies. Department officials in Hong Kong, for example, have developed a program dubbed
P2E2, short for Pollution Prevention and Energy Efficiency, to be fully rolled out later this year. P2E2 aims to help
companies in Hong Kong turn profits while cleaning up heavily polluting factories in China. It will ultimately be backed by
$1 billion in funding from the Asian Development Bank and other sources that will grease the wheels by eliminating
capital costs for the companies involved. The basic idea is to match environmental-service companies based in Hong
Kong with individual factories in China's Pearl River Delta region, one of the most heavily industrialized -- and most
intensely polluting -- places on the planet. The service companies will conduct environmental audits at the factories and
then install new energy-efficient technology and machinery to cut both costs and pollution at the factories. In effect, the
Chinese factories will outsource their cleanup to the Hong Kong environmental-service companies. The trick is that neither
party will face any upfront costs or capital investment. The Hong Kong companies will finance their work with loans from
the Asian Development Bank and other sources. The factories get the technology free and later pay the environmental-
service companies a cut of the cost savings generated by the new technology over a period of years. The Hong Kong
companies then pay off the loans and pocket the remaainder as profits. The Commerce Department officials in Hong Kong
hope the program will help generate new markets for U.S. clean-tech companies in China. "We can't fund enough
regulators or prosecutors to solve Asia's environmental crisis," says Stewart Ballard, chief commercial consul for the U.S.
Commercial Service at the American Consulate General Hong Kong and Macau. "We need to start looking at the
environment as business opportunity."

S: COOPERATION GOOD
The US and china have no reason to be rivals over oil but should cooperate
Financial Times DANIEL YERGIN 21 May 2007 China and America need not be energy rivals
Energy is markedly different from the other controversial matters that will be at the top of the US-Chinese
Strategic Economic Dialogue, edition two, meeting this week in Washington. Trade and currencies are the now
familiar issues at the centre of the economic tensions in the bilateral relationship. Energy, however, is about
competition and the risks of collision around the world. At a time of tight markets and high prices, those risks
can grow.
The dialogue is chaired by Henry Paulson, the US treasury secretary, who has the lead on China issues in the
US government, and Wu Yi, China's vice-premier. It is meant to provide a framework for defusing
controversies and reducing the stresses in the rapidly changing relationship. The need is certainly there when
it comes to energy - both to ensure that commercial competition does not turn into geostrategic rivalry, and
to respond to the major environmental challenges.
For some, it is too late. In their view, the rivalry risk is already here. They see a mercantilist China single-
mindedly moving to pre-empt world oil supplies. Some Chinese, for their part, fear their country being denied
access to supplies and worry about the vulnerability of its lengthening supply lines.
The reality is more complex. China's demand, while less than 10 per cent of the world total, is increasing
quickly because of rapid economic growth. Its oil market is now the second largest in the world - 40 per cent
larger than Japan's - and it has gone in less than 15 years from self sufficiency to importing half its total
supply.
Thus, it is not surprising that China - with a strong domestic industry on which to base a "go out" strategy -
would seek to acquire and develop production assets around the world. It would be more surprising were it
not to do so. For consumers in North America and Europe, it is actually much better, at a time of growing
demand, that China is investing to bring additional barrels to market than not.
But perspective is required on two key points. The first is scale. For all the discussion about China's activities,
its total production outside its borders is a fraction of that of just one of the supermajors. The second is to
understand the significance - and urgency - of energy security for the Chinese. For Beijing, it means ensuring
that there is sufficient energy to fuel the economic growth needed for social stability and for absorbing almost
20m migrants a year into urban areas.
The real risks are not from competition in the global marketplace. Rather they would arise when oil and gas
development gets caught up in larger foreign policy issues, of which those involving Iran and Sudan are
currently the most obvious. What the dialogue can do is emphasise the very large common interests the two
countries share as the world's two largest petroleum consumers. The US imports 60 per cent of its oil; China
50 per cent. Between them, they account for almost 35 per cent of world consumption. Both benefit from
stable markets, open to trade and investment. Here, the dialogue can help build China's confidence in the
reliability of the global market and the institutions maintaining its security. Of course, this is more challenging
when anxiety about supplies and prices is so high.
China is just beginning to fill its new strategic petroleum reserve. One key question now is to develop some
congruence on the purpose and management of such a reserve - and on how to co-ordinate during a major
disruption.
Coal is another common interest for the US and China. They are, respectively, holders of the largest and
second-largest coal reserves in the world. Half of America's electricity is generated from coal, and three-
quarters of China's. This inevitably means that clean coal and carbon sequestration loom large on any
bilateral energy agenda.
One of the most fruitful subjects is on the demand side. The emphasis around the world on energy efficiency
has not been seen for decades - indeed, if ever before. It now has strong support across the US political
spectrum. For its part, Beijing, contemplating a fourfold growth in its economy by 2020, has put conservation
among its top priorities and is trying to shift to less energy-intensive expansion. It is not easy to do so in an
economy that is swelling so fast that it has to add one or two new power plants a week. On a global basis,
climate change is the new driving force for energy efficiency - as less energy usage is the biggest near-term
mechanism for reducing emissions. That imperative will grow stronger. For China, there is also the immediate
imperative - the all-too-evident local and regional air pollution, with direct impacts on health.
One specific "deliverable" that could emerge from the dialogue would be the removal of tariffs and barriers on
trade in technology and equipment for energy efficiency and renewables. That could also become part of a
broader dialogue on the knowhow for reducing energy intensity and implementing such efficiency quickly.
With the way that policies and public opinion are going, that could mean building a permanent agenda out of
a twice-yearly dialogue. The benefits would accrue to both countries and, at the same time, would be shared
worldwide.
The writer is chairman of Cambridge Energy Research Associates, an IHS company, and the author of The
Prize: the Epic Quest for Oil, Money & Power and of The Commanding Heights. He is writing a new book on
energy and geopolitics

S: COOPERATION GOOD
It is in both countries interests for cooperation on energy to happen

South China Morning Post 21 May 2007 Energy co-operation in China and US interests
The prospect of regular and high-level discussions between Beijing and Washington on energy issues is a
highly encouraging development. Few other issues highlight the international challenges posed by China's
rise quite as sharply as energy; just 14 years ago the mainland did not need to import oil, now it is the world's
second-largest consumer and a key factor in soaring global oil prices. The ever-growing thirst for imports to
sustain its high growth is in part driving China's international diplomacy, sparking a flurry of deals from
Venezuela to Sudan.
The US is, of course, the world's largest oil consumer and its citizens are among the highest users per capita.
The two countries are the world's two largest oil importers. In that environment, the potential for tension and
conflict between the economic giants over dwindling energy resources is ever-present.
Beijing and Washington, as we report today, are exploring the possibility of a Sino-US energy summit and
cabinet-level consultations. The decision to move energy issues beyond the fledgling Strategic Economic
Dialogue was hatched in a recent telephone call between President Hu Jintao and his US counterpart George
W. Bush. The move shows a positive proactive approach by both capitals to potential problems in the Sino-US
relationship, further highlighting maturing and deepening ties unthinkable just a few years ago.
Significantly, the energy discussions will also cover related environmental issues as both capitals respond to
growing international concern over the pace and scope of global climate change. Here, too, both countries are
deeply linked. Both have different but questionable environmental records. And by 2009, the mainland will
overtake the US as the world's largest emitter of carbon dioxide, the main greenhouse gas linked to global
warming.
It is hoped that over time the environmental element of the talks will dominate as the two sides support each
other in a post-oil world. China could prove a key market for US advances in new safe energy technology - co-
operation that could have a global impact.

S: COOP POSSIBLE – NUCLEAR ENERGY
The US and China want to cooperate in the field of nuclear energy.

BBC News 6 March 2007 Algerian energy minister: US, China willing to cooperate on nuclear energy
Chakib Khelil [Algerian Minister of Energy and Mining] said that the French authorities had reservations over
the development of civilian nuclear energy in Algeria, adding that negotiations with Paris were not
encouraging if compared with those held within the framework of the IAEA with the United States, China and
Argentina.
The minister explained that whenever negotiations over nuclear cooperation were held between Algeria and
other countries, the French authorities would avoid the matter all together and would raise problems
irrelevant to the issue of [nuclear] cooperation. Chakib Khelil added that negotiations with the French
authorities were not at all encouraging compared with negotiations with other countries. He said: "We noticed
a difference in the negotiations. For example when we negotiate with a Chinese, he welcomes you and
suggests things to you. In the following week, he would follow up the suggestion with a detailed proposal. The
Frenchman, on the other hand, limits his discussion to other issues."
The minister offered the example of his meeting with the French industry minister and the French ambassador
in Algiers, where his ministry included the nuclear issue on the meeting's agenda, while the French ruled it
out. The French ambassador then discussed the matter with the [Algerian] minister for water resources. He
also said that Algeria received greater support from the US to develop civilian nuclear energy, and is in the
process of developing a partnership to build a test reactor. He added that the French had qualms about
developing this sector, despite them having no qualms about building [nuclear] partnership with other
countries. He said "The French were not interested in developing this sector." "They almost monopolise
worldwide uranium reserves, despite the Chinese beginning to supplant them in this market. The main aim of
the French is to maintain their monopoly on this resource. However, Algeria possesses uranium reserves and
will use these [as a bargaining chip] in negotiations. Whoever wants to use this uranium will need to offer
something in return".
Commenting on the French interior minister and presidential candidate Nicolas Sarkozy's suggestion to offer
civilian nuclear assistance to Algeria in exchange for natural gas, Chakib Khelil said that it was merely an
idea. He denied that he had received any such suggestion from the French authorities. The minister said that
Algeria was in the process of amending the laws governing this [nuclear energy] sector, the aim of which was
to "stop this sector ever becoming hostage to budgetary changes". He added that "Algeria has experience in
this field and is looking for a solution to continue research without the need for state funding. We are ready
for any cooperation in the field of nuclear energy, and we are looking for a long-term partnership within the
framework of the IAEA to exploit uranium deposits and use these within any such partnership. We will involve
Sonatarch and the [Algerian] Commission for Atomic Energy".

S: COOP GOOD – CLIMATE
As the Worlds biggest consumers, the US and China must cooperate to help stop
climate change
China Daily 5 January 2007 'China, US Must Work Together on Energy'
The transfer of energy technologies from the United States to China will help the world's two biggest energy
consumers reduce their impacts on the global environment, a Harvard professor in Beijing said yesterday.
Nuclear, wind and solar energy technologies are being transferred, and US enterprises are playing a major
role in the process, but worries about intellectual property rights are hindering their actions, Richard Vietor
the senior associate dean of Harvard Business School (HBS) told China Daily in an exclusive interview
yesterday.
He was in Beijing as part of the HBS' China Immersion Experience program at Tsinghua University's School of
Economics and Management.
The professor of environmental management noted that the US-based Westinghouse Electric Company had
recently signed a deal to help China build five nuclear reactors. Other US companies, like General Electric and
Chevron, have also had commercial success in transferring solar and wind power and also coal gasification
technologies to China.
In the future, hydrogen technologies, which the US is researching, could also be transferred, he said.
In the energy sector, the US Government bars only the transfer of defense-related technologies to China, he
said.
"I can't think of an area where we (the two countries) compete more than we cooperate," he said in reference
to energy technology.
The two countries must cooperate because they are the world's largest energy consumers and importers, and
also pump the most carbon dioxide into the air, he said.
The biggest problem to emerge for the American side has been intellectual property rights, he said.
"I have talked with a lot of American companies that are not willing to invest here because they are afraid
that their technologies will be stolen.
"I have also talked with firms here that are organizing their production so that their core technology is only
accessible to a non-Chinese employee," he said. "It shouldn't have happened, but just imagine how terrible
things can be if you have some great technology and it shows up at another company two blocks away."
The greatest fear of US companies has been the possibility that senior Chinese employees who understand
the core technology could take their knowledge over to a competitor, he said.

S: CHINA WANTS COOPERATION
CHINA WANTS TO COOPERATE WITH THE US IN THE AREA OF ENERGY

BBC 11 December 2007 China eyes closer cooperation energy cooperation with US
Beijing, Dec. 11 (Xinhua) - China and the United States might see more opportunities for trade by boosting
joint energy development, Minister of China's National Development and Reform Commission (NDRC) Ma Kai
said Tuesday.
"There could be great potential and fat opportunities for both countries in improving coal efficiency and
promoting clean energy," Ma said ahead of the high-profile China-US Strategic Economic Dialogue, which
opens Wednesday.
Ma urged two sides to find new ways for joint energy development, saying the United States had advanced
technologies and experience to improve coal efficiency and develop clean energy, which were valuable to
China.
The Chinese government had been promoting the use of a variety of cleaner energy sources to reduce its
reliance on coal, as well improving its energy efficiency and pollutant control.
His remarks also came as the two countries signed a slew of agreements, including pacts on energy
cooperation, at the 18th China-US Joint Commission on Commerce and Trade (JCCT) Tuesday.
One of the 14 documents was a memorandum of understanding on cooperation of biofuel development

signed by the NDRC and the US departments of agriculture and energy.
"As two of the world's largest consumers of oil, this document may help reduce each country's dependence
on imported oil, benefiting both US and Chinese consumers," the US Department of Agriculture said in a
statement released at the JCCT.
Ma said earlier Tuesday that the Chinese side would work out executive plans, and wished to start work soon.
China is promoting development of biofuels with financial support, as the country saw biofuels as
environmental-friendly energy sources.
Ma hoped both countries would also launch initiatives "as soon as possible" to implement a memorandum of
understanding signed in September, which outlines cooperation in upgrading industrial energy efficiency.
Tuesday's JCCT also saw US firm Peabody Energy become an equity partner in China's "GreenGen" project, the
country's first near-zero emissions coal-fuelled power plant with carbon capture and storage.
Ma said the NDRC had drawn up a guideline with dozens of suggestions on cooperation in power generation,
coal, petroleum and natural gas, renewable energy, as well as energy conservation and environmental
protection, in a bid to boost joint energy development.
"Joint energy development between the two countries would be mutually beneficial," he said, adding it would
not only help China improve energy consumption structure, reduce greenhouse emissions and cut pollutant
discharges, but could also bring commercial benefits to the US side.
The commission said China would lift the proportion of renewable energy consumption to about 10 per cent
by 2010, and to 20 per cent by 2020.
China would focus on development of hydropower, bio-mass energy, wind power and solar power in the
future, according to a medium and long-term plan for renewable energy published by the NDRC in September.
Almost 70 per cent of China's energy use came from coal in 2006, with other forms of energy each accounting
for a tiny proportion.
S: CHINA WANTS COOPERATION
China includes cooperation with the US in their plans of energy policies

Hong Kong Commercial Daily News 13 September 2007 China strategic oil policy includes Sino-American
cooperation
Chen De Ming, Vice Chairman of National Development and Reform Commission (NDRC), stated that the oil
storage of China is expected to increase to 12 million tons before 2010 at Sino-American Oil Forum on 11th
September 2007.
The present strategic oil reserve of China is around 2 million to 3 million tons. China will gradually increase
the crude oil storage in the coming few years.
Concerning the potential of China and America's oil industry, Chen emphasized that the two parties should
grasp the chance for cooperation. He urged America's main crude oil enterprises to invite China's enterprises
to participate in foreign investments. This will further strengthen all-round Sino-American cooperation.
Chen also suggested that America needs to establish a set of regulations concerning whether China can
acquire America's oil assets. It will be quite inconvenient to seek government permission after rounds of
negotiations are completed.

S: US WANTS COOPERATION
The US has already made offers to china in search of cooperation with them
By Gomati Jagadeesan 5 April 2007 Dow Jones Energy Service U.S Launches Clean Energy Mission To India,
China
SINGAPORE (Dow Jones)--A group of 15 companies including industry heavy weights GE Energy (GPS.XX), and
DuPont is expected to participate in the first-ever U.S. clean energy trade mission to India and China, but any
substantial foreign investment will depend on these countries adopting more free market policies, a top U.S.
Commerce Department official said.
The mission, which is scheduled to visit India and China between Apr. 18-25, will focus on transfer of clean
energy technologies including clean coal and renewables as well as accelerated deployment of such
technologies, David Bohigian, Assistant Secretary for Market Access and Compliance, International Trade
Administration at the U.S. Dept. of Commerce, told Dow Jones Newswires.
"There is a great stable of companies participating including GE Energy, DuPont, Applied Materials and some
venture capitalists. Roughly 15 companies per country are likely to be part of the trade mission," Bohigian
said adding that "the goal of the mission was to expose these companies to investment opportunities in these
countries and facilitate export of U.S. technologies."
But Bohigian added that any foreign investment will happen only when both countries adopt more free
market policies to allow investments.
The trade mission is part of the broader Asia-Pacific Partnership on Clean Development and Climate, where
member-countries cooperate on deploying cleaner technologies to reduce emissions and enhance energy
security.
India and China are members of the partnership.
The Bush administration has refused to ratify the Kyoto Protocol and instead sees adopting cleaner
technology as a way to mitigate greenhouse gasemissions. The trade mission also comes at a time when the
U.S. Senate is mulling legislation to tackle climate change by curbing greenhouse gas, or GHG, emissions.
But the view on Capitol Hill is that any meaningful legislation should be conditional upon India and China
adopting similar laws.
Bohigian added that though it was still early to put a dollar figure to the level of investments that could be
made as a result of this mission, he predicted increased foreign investments.
"Hopefully these companies will have a business plan, and we'll see demonstrable results soon," he said.
The market in India for renewables is estimated to be worth $500 million, and is growing at the rate of 15%
annually, according to analysts.
China is also targeting the use of clean energy to expand the use of non-fossil fuels as energy demand in the
country expands. Its current 11th Five-year Plan emphasizes sectors including clean coal, wind and solar
power, and biomass energy.
But Bohigian warned that inadequate market access, lack of transparency and rule of law still posed
significant risks to foreign direct investments in these countries.
"There are certainly investment problems. Market access, barriers to trade, hinder investments. Intellectual
property protection is a big issue, especially in China, and they certainly have ways to go," Bohigian said.
Bohigian added that improving rule of law and transparency only serves to expand benefits to these
countries.
"Every company makes business decisions based on certain facts and the ability to have contracts enforced is
important," he said. India, China Key To Any U.S. Climate Change Law Bohigian added that the trade mission
was timely as the U.S. Senate is looking to draft a climate change bill, which could be introduced as early as
this summer.
The Senate Committee on Energy and Natural Resources has held a series of hearings on climate change,
where industry groups as well environmentalists have testified.
While environmentalists maintain that the U.S. should have a mandatory climate change regime, those in the
manufacturing and energy industry have urged carbon control laws to be adopted by developing countries as
well.
Even law makers are divided, with the energy committee ranking member and Republican senator, Pete
Domenici saying any U.S. climate change compliance should be contingent upon India and China adopting
similar policies.
In a letter to President Bush late last month, Domenici also urged the White House to engage China to
address the challenges of energy security and global climate change.
"By all indications, China will soon become the world's largest emitter of greenhouse gases. Therefore, any
meaningful, effective policy on climate change would have to involve China at the outset," the letter states.
"This trade mission is an important piece of that puzzle. Technology is key to solving the climate issue. We'll
see how that legislative debate shapes up," Bohigian said.

AT: IMPACTS INEVITABLE
Impacts not inevitable, relations solve the root causes.

Roy ’03 Dennis; Senior Research Fellow, Asia-Pacific Center for Security Studies; “Rising China and US
Interest: Inevitable vs. Contingent Hazards,” Orbis; Winter 2003)
Although the dangers are sometimes exaggerated, the contingent hazards represent worrisome uncertainties,
and
this warrants avoiding an unnecessarily adversarial relationship with China. Jf relations between China and
the
United States were friendly, the harm done by a rising China to American international standing would be
limited. Washington would have to accept more consultation, compromise, and shared leadership with Beijing
and might face tougher competition in some sectors of the global marketplace. Increased Chinese demand for
some American products and services and a greater Chinese contribution towards shouldering the burden of
maintaining regional security would help offset these disadvantages. By contrast, an adversarial US.-China
relationship would find Beijing using its growing strength in a purposeful and Systematic assault on US.
interests in Asia and elsewhere, as the PRC would tend to view U.S. interests as barriers to the achievement
of
Chinese goals. Unlike the first scenario, the second would constitute a serious challenge to US interests with
the potential to develop into a new Cold War.

AT: CHINA HURTS US HEG
A strong China is good for US security

Daniel H. Rosen (ABC News) 2007-05-15 10:29file:///E:/content_872864.htm
America has a choice to make, between taking comfort in China's poverty reduction -- the greatest in human
history, largely achieved using our economic model -- or wishing it back to the failed state it was before the
boom began.
Do we honestly want to deal with a stagnating country of 1.3 billion people with nuclear weapons? To grieve
over China's growth is to stick our heads in quicksand. The only responsible position is to be glad that China is
becoming more fit to look after its people, take responsibility for its environmental impact and meet its
responsibilities as a Great Power.
China does and will present challenges to US interests, some of them even would be considered "threats."
This does not mean China is a future enemy: Some of these are the same problems we manage with allies
and friends from Canada to Japan to Europe, and China has many of the same geopolitical goals as the United
States, so we may well need to be partners in global affairs.
How the United States reacts to China will have a significant influence on its future, and we are much better
off with the challenges of a strengthening China than a collapsing or stagnant one.
A positive attitude toward one another's successes is a necessary starting point for the
United States and China -- the world's strongest incumbent and strongest aspirant -- to
work together on problems. Global warming, energy security, Islamic extremism and a host
of real challenges await our cooperation, and cannot be dealt with one without the other.
We have the competitive strength and endowments needed to win from China's growth,
just as Japan -- despite simmering political -- has done with two decades of steady trade
surpluses.
1. U.S. Hegemony no longer exists as such. In a world of globalization China is shaping the
worlds destiny.
New York Times 1-26-08 (Nationally Syndicated news source) Waving Goodbye to Hegemony
http://www.nytimes.com/2008/01/27/magazine/27world-t.html?pagewanted=8&_r=1&sq&st=nyt&scp=20
Karl Marx and Max Weber both chastised Far Eastern cultures for being despotic, agrarian and feudal, lacking
the ingredients for organizational success. Oswald Spengler saw it differently, arguing that mankind both
lives and thinks in unique cultural systems, with Western ideals neither transferable nor relevant. Today
the Asian landscape still features ancient civilizations but also by far the most people and, by certain
measures, the most money of any region in the world. With or without America, Asia is shaping the world’s
destiny — and exposing the flaws of the grand narrative of Western civilization in the process. The rise of
China in the East and of the European Union within the West has fundamentally altered a globe that recently
appeared to have only an American gravity — pro or anti. As Europe’s and China’s spirits rise with every
move into new domains of influence, America’s spirit is weakened. The E.U. may uphold the principles of the
United Nations that America once dominated, but how much longer will it do so as its own social standards
rise far above this lowest common denominator? And why should China or other Asian countries become
“responsible stakeholders,” in former Deputy Secretary of State Robert Zoellick’s words, in an American-led
international order when they had no seat at the table when the rules were drafted? Even as America
stumbles back toward multilateralism, others are walking away from the American game and playing by their
own rules. The self-deluding universalism of the American imperium — that the world inherently
needs a single leader and that American liberal ideology must be accepted as the basis of global
order — has paradoxically resulted in America quickly becoming an ever-lonelier superpower. Just
as there is a geopolitical marketplace, there is a marketplace of models of success for the second world to
emulate, not least the Chinese model of economic growth without political liberalization (itself an affront to
Western modernization theory). As the historian Arnold Toynbee observed half a century ago, Western
imperialism united the globe, but it did not assure that the West would dominate forever — materially or
morally. Despite the “mirage of immortality” that afflicts global empires, the only reliable rule of
history is its cycles of imperial rise and decline, and as Toynbee also pithily noted, the only direction to
go from the apogee of power is down.

AT: CHINA HURTS US HEGE
2. Arguments about weather U.S. hege is good or bad are irrelevant. We are entering a world
without superpowers we need co-operation.
New York Times 1-26-08 (Nationally Syndicated news source) Waving Goodbye to Hegemony
http://www.nytimes.com/2008/01/27/magazine/27world-t.html?pagewanted=8&_r=1&sq&st=nyt&scp=20
Would the world not be more stable if America could be reaccepted as its organizing
principle and leader? It’s very much too late to be asking, because the answer is unfolding
before our eyes. Neither China nor the E.U. will replace the U.S. as the world’s sole leader;
rather all three will constantly struggle to gain influence on their own and balance one
another. Europe will promote its supranational integration model as a path to resolving Mideast disputes and organizing Africa, while
China will push a Beijing consensus based on respect for sovereignty and mutual economic benefit. America must make itself irresistible
to stay in the game.
I believe that a complex, multicultural landscape filled with transnational challenges from terrorism to global
warming is completely unmanageable by a single authority, whether the United States or the United Nations.
Globalization resists centralization of almost any kind. Instead, what we see gradually happening in climate-
change negotiations (as in Bali in December) — and need to see more of in the areas of preventing nuclear
proliferation and rebuilding failed states — is a far greater sense of a division of labor among the Big Three, a concrete burden-sharing
among them by which they are judged not by their rhetoric but the responsibilities they fulfill. The arbitrarily composed Security Council
is not the place to hash out such a division of labor. Neither are any of the other multilateral bodies bogged down with weighted voting
and cacophonously irrelevant voices. The big issues are for the Big Three to sort out among themselves.
3. The US must reform all policies before it can regain any kind of hegemony
(Edward C. Luck, Professor of International and public affairs, Columbia University, 2001, Multilateralism and
US Foreign Policy, pages 68-69) [Bapodra]
Fifth, the evidence cited in this chapter strongly suggests that a disabling flaw of much of
the practice and theory of multilateralism has been its insistence on looking at
internationals interactions and processes through the wrong end of the telescope. The
search for the sources of legitimacy should begin with an understanding of national values,
interests, and political cultures, not with an examination of global treaties, institutions, and
processes. For instance, reliance on domestic models of law and order in theories of
international legitimacy has led to exaggerated notions of its power over national publics.
Surely, if the legitimacy of U.S. policies toward international institutions mattered greatly to
the American people beyond affirmative and superficial poll responses, then one of the
candidates would have raised U.S. arrears in payments to the U.N. at some point during the
2000 presidential campaign.

AT: CHINA BAD
China’s recent law reform agenda ensures its protection of human rights
Pitman B. Potter is the director of the Institute of Asian Research at the University of British
Columbia and a professor of law at UBC Faculty of Law. June 26, 2002
<http://www.hrichina.org/public/contents/article?revision%5fid=2056&item%5fid=2055>
China’s commitment to join the WTO and to abide by its requirements concerning transparency, national treatment,
non-discrimination and other disciplines has been seen as supporting general
policies of economic reform and opening up and advancing ongoing efforts at
legal reform. The WTO’s transparency requirements may well encourage improvements in China’s administrative law system
and the general processes and procedures for market regulation, as laws and regulations are made public and as the subjects of
regulation gain greater access to the rule-making process.
National treatment requirements have the
potential to promote approaches to policymaking and regulation that eliminate
double standards for foreign and domestic businesses. Similarly, the WTO’s non-discrimination
provisions may encourage removal of political considerations from legal and regulatory enforcement.
Issues of complementarity will also determine the impact of China’s WTO
accession on human rights protection. As WTO disciplines of transparency drive reforms in the area of market
regulation, the beneficiaries will be concentrated in the local economy. WTO-driven legal reforms will also benefit
foreign actors, as norms of national treatment and non-discrimination gradually
diminish the unequal treatment that has characterized foreign economic
relations with China previously. Individual employees with sufficient technical skills to avoid inclusion in the
undifferentiated mass of unskilled workers who currently staff China’s factories and farms may also benefit, as expanding business
opportunities create more demands for their knowledge, and as increased labor mobility strengthens their bargaining position with
potential employers.
China has taken deliberate steps to create better human rights policies
Wu Miaofa Updated: 2007-12-24 “ China playing a key role as UN member” The author is a researcher with
China Institute of International Studies <http://www.chinadaily.com.cn/opinion/2007-
12/24/content_6342920.htm>
In human rights, the country has made undeniable progress in more than one
aspect, such as writing human rights into the Constitution, and continuously
enriching the concept of human rights for the betterment of people. China has
fully participated in all activities of the UN Human Rights Council, including the
formulation of the council's framework and accepting its annual inspection of
human rights conditions in all UN member states (be it developed or developing), in the spirit of pragmatism and
constructiveness. And on the issue of climate change, China has introduced strong measures to reduce greenhouse gas emissions.

AT: CHINA BAD
Chinese government gives top priority to human rights

Gov.cn, March 2003, "Progress in China's Human Rights Cause in 2003 (2004)"
<http://www.gov.cn/english/official/2005-07/28/content_17972.htm>
The year 2003 was an important and unusual year for China's development. It was also a year of great,
landmark significance for progress in human rights in the country. In 2003, the Chinese Government
did a good job in tackling the sudden outbreak of SARS and curbing its spread, as well as in tackling frequent natural disasters. Persisting
in taking economic construction as its central task, and striving for the coordinated development of material, political and spiritual
civilizations, it achieved new breakthroughs in its reform, opening-up and modernization efforts. China maintained political stability, and
further improvements were witnessed
achieved rapid economic growth and overall social progress. Moreover,
in the people's living standards and new progress was made in human rights
cause.
??The Chinese Government gives top priority to a person's life and health and
basic human rights. Adopting the attitude of holding itself accountable to the people, acting in their interests and accepting
their supervision, the Chinese Government has formulated the principles of government, that is, "governing the country for the people,"
and "using the power for the people, sharing the feelings of the people and working for the interests of the people." It has put forward
the scientific view of development characterized by putting people first and promoting the progress of society and overall development
of the people. It has established the concept of governing the country by guaranteeing the implementation of the Constitution,
In practice, it has adopted a
establishing a government under the rule of law and creating political civilization.
series of distinctively epochal measures for respecting and safeguarding human
rights. It has made great efforts to acquaint itself with the feelings of the people, to reflect such feelings, to reduce the people's
burdens and practice democracy. These efforts have markedly improved China's human rights
conditions and won universal acknowledgement from the international
community.

AT: US-SINO RELATIONS BAD
China US coop = peace

Wenzhong, PRC Ministry of Foreign Affairs, 2-7-2K4 (Zhou, “Vigorously Pushing Forward the Constructive and
Cooperative Relationship Between China and the United States,” http://china-
japan21.org/eng/zxxx/t64286.htm)
Both China and the US wield important influence in world affairs and shoulder major responsibility for peace
and development of mankind. A sound China-US relationship will not only benefit the two peoples but also
contribute to peace, stability and development around the world. Just as pointed out by Chinese leaders on
many occasions, China-US relations have never been purely bilateral and their implications have gone far
beyond the bilateral scope. Given such, when called upon to address bilateral ties, both sides must not limit
themselves to the specific issue itself but bear in mind the larger picture, taking into account not only their
bilateral ties but also possible implication or ramification to regional or global developments.

AT: ALT COOP CP
The US and China should cooperate on climate change—US official

Xinhua News Agency 13 June 2008 “U.S. official urges more cooperation with China on climate change”
BEIJING, June 13 (Xinhua) -- The United States and China have no choice but to cooperate closely on
combating global warming to work out long-term solutions that could be shared by the world, said a visiting
U.S. senior environmental official here on Friday.
"We share a lot in common in terms of challenges ... our two countries have no choice but to cooperate more
aggressively on clean energy technologies, because we face the same challenges and we need similar
solutions," said James Connaughton, chairman of the White House Council on Environmental Quality.
"Seventy percent of power generation in China is still based on coal, and in the United States it is fifty percent
... We have to work together on technologies for alternative fuels, biofuel and nuclear energy," he said.
Connaughton is on a China tour talking with officials on climate change issues ahead of a U.S.-sponsored
conference on energy and climate change that is to open in Seoul on June 22.
It will be attended by representatives from the world's major economies like the United States, the European
Union, France, Germany, India, Britain and China.
Describing the tone of the Chinese side as "very constructive," Connaughton said China has set very
aggressive goals especially in energy efficiency and has made significant strides like shutting down old power
plants and inefficient industrial plants.
Connaughton also hailed the Chinese government's efforts to reduce carbon emission and increase energy
efficiency.
"There has been very significant and positive direction in China in recognizing the urgency of fighting against
climate change and designing strategies that will help meaningful progress in China," said Connaughton,
adding that the U.S. government "welcomed that."
As the only developed nation outside the Kyoto Protocol, the United States initiated climate change talks
involving major economies in May 2007, when the United States was under growing pressure to contribute
more to solving the problem of greenhouse-gas emissions.
In their previous meeting in Paris in April, the major economies made progress in defining the building blocks
of a new UN deal to fight climate change but with splits about whether to set a goal of halving greenhouse
gas emissions by 2050.

AT: ALT COOP CP
The best area of cooperation lies in energy and the environment where it
provides a win-win situation.—Chinese official
Xinhua News Agency 17 June 2008 “China-U.S. energy cooperation would produce win-win results: Chinese
vice-premier”
Chinese Vice Premier Wang Qishan has called for stronger cooperation between China and the United States
in energy, the environment and other related areas, saying that bilateral cooperation in these areas would
lead to win-win results.
"The Chinese government gives high priority to energy and resources conservation and the protection of the
environment. It is committed to building a resource-conserving and environment-friendly society," Vice
Premier Wang wrote in an article published by The Financial Times on Monday in its North American edition.
"However, China is a big and populous developing country at a stage of accelerated industrialization and
urbanization. This has led to heavy consumption of energy and resources and made the task of protecting the
environment a daunting one," he said.
"So it is highly significant that the fourth China-U.S. Economic Dialogue, which will be held in the U.S. this
week, will promote long- term cooperation in energy, the environment and other related areas," said Wang,
who heads a Chinese delegation to take part in the fourth China-U.S. Strategic Economic Dialogue (SED),
scheduled to be held in Annapolis, Maryland, on Tuesday and Wednesday.
To meet the challenges brought about by the pressures of growing demand, Wang said China has endeavored
to achieve the following goals: intensifying energy and resource conservation, developing renewable energy,
and actively adapting to global climate change.
"There is a broad scope for cooperation between China and the U.S. in energy and environment," he wrote.
"Stronger cooperation between the two countries in energy and the environment will enable China to respond
better to energy and environmental issues and also bring about tremendous business opportunities and
handsome returns for American business."
According to the intent of the 10-year cooperation between China and the U.S. in energy and environmental
protection, Wang said the two countries should, on the basis of the principles of mutual complementarity and
win-win progress, focus their cooperation in energy, pollution reduction and protection of natural resources.
The Chinese vice-premier proposed three approaches to strengthen bilateral cooperation in these areas.
First, China and the United States should build joint laboratories or research and development centers for
energy and environmental protection technologies, and provide platforms to promote industrial applications
of such technologies.
Second, the two countries should jointly formulate and implement fiscal, taxation, financial and trade policies
to encourage innovation and cooperation in and transfer of energy-conserving and environment-friendly
technologies.
Third, the two sides should use existing multilateral and bilateral dialogue mechanism and exchange
platforms to enhance consultation and coordination, strengthen cooperation in training, exchanges of
technical personnel, and data-sharing.
Vice-Premier Wang hoped that through dialogue and cooperation in these areas, China and the United States
will promote all-round development of the constructive and cooperative relationship between the two
countries, to better serve the interests of their peoples.
The SED was launched jointly by Chinese President Hu Jintao and U. S. President George W. Bush in
September of 2006. The dialogue is held twice a year, alternating between the two countries. The previous
meeting was held in December in Beijing.
THE US AD CHINA SHOULD COOPERATE ON CLEAN ENERGY

XINHUA news agency 13 march 2008 U.S. Senator: Clean energy, a great opportunity for U.S.-China
cooperation
Maria Cantwell, Democrat Senator for the Washington State, on Tuesday said the clean energy technology will
provide new and great opportunity for the United States and China to cooperate. Cantwell made the remarks
at a press conference on Tuesday at the U.S. embassy to China, noting that such cooperation between the
United States and China, the current world's largest emitters of carbon dioxide, is of great significance and
will point to a clear path for the rest of the world in reducing greenhouse gas emissions. Cantwell, currently
serving as member of the U.S. Senate Finance Committee and the Senate Energy and National Resources

Committee, started her China visit on March 16 and will leave for the Republic of Korea on March 19. During
her stay in China, she mainly met with officials from the National Development and Reform Commission of
China and the two sides talked about the promotion of trade on clean energy technologies and the overall
U.S.-China trade balance issues.

AT: PALM OIL CP
1. Only cooperation with the US can solve for relations
2. China will look away from traditional palm oil because of prices
Financial Times 2/26/08 http://royaldutchshellplc.com/2008/02/26/financial-times-biodiesels-rise-and-
robust-china-demand-push-palm-oil-higher/ “Biodiesel’s rise and robust China demand push palm oil higher”
The price of palm oil jumped nearly 6 per cent yesterday to reach a record high on the Bursa Malaysia
derivatives exchange boosted by strong demand from China and India.
Prices have doubled in 12 months as persistently expensive crude oil stokes demand for palm oil, which is
increasingly made into biodiesel. The rise in palm oil prices is also linked to the surging cost of other
vegetable oils.
The benchmark May crude palm oil contract on the Bursa Malaysia derivatives exchange hit M$3,914 a tonne
in Kuala Lumpur yesterday, before closing 4.5 per cent higher at M$3,866. Palm oil has risen 27.5 per cent
since the start of the year.
The latest leg of the rally has been supported by Chinese buying, after the country’s rapeseed crop was last
month damaged by extreme weather and because of plans by Indonesia, the world’s largest palm oil
producer, to raise export taxes.
Analysts will present their views on the outlook for palm oil at the Bursa Malaysia pricing conference, the
largest gathering of the industry, which starts in Kuala Lumpur today.
Two of the analysts who were most accurate in their palm oil price predictions last year remain bullish.
Dorab Mistry, a director of Godrej International, the Indian chemicals group, said: “There’s a likelihood that
the market will continue to go higher.
“People have not been buying recently and now there is a buying frenzy going on. It’s not only from China -
it’s from all over the world.”
News that 9,000 hectares of forest and plantation have burnt down in Riau in Sumatra province in Indonesia
has “added fuel to the buying fire”, he said.
Chris de Lavigne, of Frost & Sullivan, forecasts that palm oil will reach M$4,000 a tonne within a couple of
months, instead of by the end of the year as he had predicted.
“We’ve gone through a lot of bad weather in China, Brazil and Argentina and so there’s been a tightening of
supply [of vegetable oil crops]. You’ve got so much happening at the same time that it’s pushing prices up.
“The agriculture bull run started only a year ago, while the metals bull run has been going for six to seven
years. So I think we are not going to see a big correction soon but are entering a different era. Palm oil is
taking centre stage in the vegetable oil business.”
Palm oil production, particularly in Indonesia, did not increase as much as was expected in 2007 and forecasts
for 2008 were also likely to be high, he said.
Franky Oesman Widjaja, chief executive of Singapore-listed Golden Agri-Resources, one of Indonesia’s biggest
palm oil producers, said yesterday that the commodity was looking expensive.
“It’s going to be sustainable, but not at this high level. This is a surprisingly high level,” he said.
Palm oil’s strength yesterday boosted the prices of other edible oil sources. At the Chicago Board of Trade,
soyabean futures for March delivery hit a record high of $14.47Â½ a bushel, double the price a year ago. In
Paris, rapeseed futures for May delivery hit a record high of â‚¬492 a tonne.,

NEG: ALT CAUSE: SANCTIONS HURT RELATIONS
It is the US’ unflexible policy on Iranian sanctions that cause the strain in
relations.
The Associated Press 11 January 2007 China tells U.S. not to meddle in its business relations with Iran
BEIJING (AP) - China warned the United States on Thursday not to meddle in its trade relations with Iran after
Washington expressed concern about a Chinese oil company's planned investment in an Iranian gas field.
"We think this kind of cooperation and relationship is legitimate. Normal cooperation should not be interfered
(with)," said Chinese Foreign Ministry spokesman Liu Jianchao.
Asked if that meant Beijing believed the United States was interfering in its dealings with Iran, Liu said, "This
is our position."
The U.S. government expressed concern to Beijing last month about a planned investment by state-owned
Chinese oil company CNOOC Ltd. in Iran's Northern Pars gas field. Washington said major business dealings
with Tehran were inappropriate while Iran is defying U.N. resolutions on its nuclear program.
CNOOC spokesman Liu Junshan said Thursday the company was still in talks with the Iranian side to develop
the gas field and to help build liquefied natural gas facilities. He said no agreement had yet been signed, and
declined to estimate the project's value.
The Iranian Mehr news agency reported last month that the deal was worth $16 billion.
Liu's comments came as Israel's Prime Minister Ehud Olmert visited Beijing. Olmert is seeking a more
proactive Chinese role in pressuring Iran to abandon its nuclear program.
Iran's president has called for Israel to be wiped off the face of the earth, and Iran is widely believed to be
trying to manufacture atomic bombs -- a charge it denies.
In talks with Olmert Wednesday, Chinese Premier Wen Jiabao said Beijing was firmly against nuclear weapons
proliferation in Iran and wanted to see a diplomatic solution to the issue, Liu said at a press briefing.
But it is unlikely that Beijing will to bend to U.S. pressure to drop the gas deal, considering China's growing
thirst for oil and gas to fuel its economic boom.
China imported 980 million barrels of oil last year, making it the world's third-biggest consumer of foreign oil.
Its demand for natural gas is expected to rise 26 percent over the next five years.
China's two major oil companies -- China Petrochemical Corp. and China National Petroleum Corp. -- are both
either involved in gas projects in Iran or in talks to participate in developing gas resources.
Iran has seen the lure of its energy resources and other markets as a way to weaken the willl of U.N. Security
Council members to exact harsh punishment over its nuclear program, which Tehran claims is for generating
electricity.
The council, of which China is one of five permanent members, voted last month to impose sanctions on Iran
for refusing to abandon uranium enrichment -- a process that produces the material for either nuclear
reactors or bombs.

NEG: ALT CAUSE: SANCTIONS HURT RELATIONS
Iranian policies strain US China ties

The Wall Street Journal 12 January 2007 Moves to Stymie Iran Strain U.S.-China Ties
BEIJING -- China and the U.S. are at loggerheads over the widening American clampdown on Iran's
international business dealings, as Beijing told Washington not to interfere in a possible multibillion-dollar
natural-gas deal between Iran and China's biggest offshore oil company.
"We think this kind of cooperation and relationship is legitimate. Normal cooperation should not be interfered"
with, Chinese Foreign Ministry spokesman Liu Jianchao said at a news conference. He said China believes the
U.S. is interfering in Beijing's relationship with Iran.
The U.S. expressed its concerns last month after Iranian officials said China National Offshore Oil Corp., parent
of Cnooc Ltd., had sealed a deal to develop Iran's Northern Pars natural-gas field. Such a deal could
undermine U.S.-led efforts to isolate Iran for refusing to abandon its nuclear program. The United Nations
Security Council recently authorized tougher sanctions in a bid to persuade Iran to stop producing enriched
uranium, which can be used for nuclear-power reactors -- as Tehran insists is its goal -- or for bombs.
"We think this is a particularly bad time to be initiating major new commercial deals with Iran," said Susan
Stevenson, spokeswoman for the U.S. Embassy in Beijing.
The U.S. also is pushing on other fronts to isolate Iran's economy. Germany's Commerzbank AG said recently
it will stop handling U.S.-dollar transactions for Iran at the bank's New York branch by Jan. 31. The U.S.
Treasury Department this month named Iran's Bank Sepah and its subsidiaries as weapons proliferators and
barred banks operating in the U.S. from handling any transactions on their behalf.
Iran, meanwhile, is reaching out to Asian investors as the U.S. noose tightens. The Iranian government this
week announced that state energy giant National Iranian Oil Co. signed a $20 billion memorandum of
understanding with Malaysia's SKS Ventures on the development of the offshore Golshan and Ferdows gas
fields in the Persian Gulf.
Liu Junshan, a spokesman for China National Offshore Oil, said yesterday negotiations with Iran continue.
Iranian officials had put the value of a deal at $16 billion.
China's two other main state-owned energy companies, China National Petroleum Corp., parent of listed
PetroChina Corp., and China Petrochemical Corp. parent of listed Sinopec Corp., are also in talks to develop oil
or natural-gas fields in Iran.
Western oil companies including Anglo-Dutch Royal Dutch Shell PLC and France's Total SA have invested in
Iran's energy sector, but U.S. sanctions have stymied development of those projects.
China's soaring energy needs, coupled with stagnating domestic oil and gas production, have forced it to rely
on more imports. It is now the world's second-biggest consumer of oil, after the U.S.
But China's growing dependency on imported oil and gas frequently has put it at odds with U.S. foreign policy
in countries such as Sudan or Iran.
Iran, which has some of the world's largest gas reserves, has been unable to develop most of its fields -- or to
build terminals to ship liquefied natural gas -- because of diplomatic pressure on potential foreign partners
and because of differences with possible partners over pricing.

NEG: COOPERATION NOW – ENERGY
The US and China are already cooperating through annual meetings

China Daily September 15, 2006 “A winning dialogue between US and China”
The way China and the United States come together to tackle challenges and issues of common concern
helps build a healthy bilateral relationship.
Officials and experts from the two countries gathered in Hangzhou on Wednesday for the second meeting of
the China-US Energy Policy Dialogue. They put their heads together for the first time in Washington last year.
The two countries have a constructive relationship on a variety of matters, including energy security.
The dialogue offers a venue where Chinese and Americans can exchange notes and opinions on their energy
policies, development plans and strategic goals. It helps clear their minds of doubts and build trust and
understanding.
The deep discussions they had in Hangzhou drove home a point that the two countries will set their eyes on
improving energy efficiency and developing new energy sources in the long term.
There is a lot to be desired for more co-operation on energy between the two countries, which face a horde of
challenges as well.
The establishment of the energy policy dialogue helps the two countries find more areas for co-operation,
which has proven to be a win-win deal for their own energy security.
It is also of great significance to the sustainability of energy in the world. The channel is believed to enhance
co-operation to promote energy efficiency and expand the use of clean energy technologies.
The China-US Energy Policy Dialogue was initiated in recognition of the increased numbers of co-operative
agreements established between the two countries in recent years.
For the United States and China, the world's largest and second-largest oil consumers respectively, co-
operation will certainly be more mutually beneficial than becoming bitter rivals for energy resources.
Their joint work in promoting energy efficiency and supply diversification is particularly desirable at a time
when China is keen to make progress in this regard.
Exchanges on clean energy use and nuclear security are also very important as China strives for less
environmental impact from economic growth.
China is ready for, and open to, the co-operation.
The fact that the United States has invested US$5 billion in oil and natural gas projects in China testifies to
China's open policy.
Still another meaningful development was the announcement of the US Department of Energy's new Beijing
office on June 30, 2005, in conjunction with the first meeting of the China-US Energy Policy Dialogue in
Washington.0
The office is said to support the US Department of Energy's co-operative efforts with our country on energy
and nuclear security issues.
By opening their doors to dialogue, the two countries signal that they can and are willing to work with each
other on crucial issues such as energy and sustainability.
Better understanding, sincerity and fairness shall paint a brighter future for the world's two largest
powerhouses to work with each other.
NEG: COOPERATION NOW – ENERGY
The US and China are already sharing ideas in energy security

BBC News September 14, 2006 China, US extend agreements on energy, environment cooperation
Beijing, 14 September: China and the United States on Thursday [14 September] extended their energy
security and environmental protection agreements for a further five years.
Chinese Vice-Minister of Science and Technology Shang Yong and the US Assistant Secretary for Fossil Energy
Jeffery Jarrett signed the renewal of existing agreements on power systems, oil and gas technology and
energy and environmental pollution control technologies.
"Both China and the United States agreed to extend on-going agreements to support more joint projects on
energy and the environment," Shang said, adding that the two sides were satisfied with cooperation over the
past five years.
An existing agreement on clean fuels technology, which includes coal-to-liquids and hydrogen, was discussed
but did not need to be extended, according to the Chinese Ministry of Science and Technology.
"The United States and China are taking a clear leadership position in a worldwide effort to develop practical
and constructive solutions for energy security and to reduce greenhouse gas emissions," said Jarrett.
The agreements between China and the United States map out specific areas of activity aimed at improving
oil and gas supply, deploying cleaner, more efficient energy technologies for the nation's coal reserves, and
reducing greenhouse gas emissions through advanced pollution controls.

NEG: COOPERATION NOW – ALT ENERGY
The US and China already have shared stakes in areas of alternative energy
research
Inside Energy with Federal Lands, June 23, 2008 (NEWS IN BRIEF; Pg. 18)
The US and China completed high-level talks last week with a commitment to work closer together on
key topics such as clean and efficient vehicles, biofuels and new batteries.
As part of the Strategic Economic Dialogue, which was first established in 2006 and held last week in
Annapolis, Maryland, the US and China agreed to cooperate more on developments of clean and
renewable resources and share information and technology.
The US and China also agreed on a so-called "Framework Document" on energy, which at first will
analyze and share how the two countries create, deliver and use energy, followed by further cooperation
on clean vehicle technologies and the improvement of transportation infrastructure.
"We need to expand and diversify our energy alternatives move to sources and methods of production
and delivery ? including hydrocarbons ? that are more efficient, cleaner, sustainable and secure," acting
Deputy Energy Secretary Jeffrey Kupfer said in a statement at the close of the conference.
The agreement comes as China eclipsed the US as the world's largest emitter of carbon dioxide, the chief
culprit in global warming, according to a study released this month by the Netherlands Environmental
Assessment Agency. The Chinese increase accounted for two-thirds of the growth in the year's global
greenhouse gas emissions, the study found.
President Bush and President Hu Jintao established the SED in 2006 as a Cabinet-level forum to enhance
US-China cooperation on strategic economic issues of shared concern
The two nations also announced the initial selection of five priority areas, along with task forces, for
cooperation in the areas of clean, efficient and secure electricity production and transmission, clean air,
clean water, clean and efficient transportation; and conservation of forest and wetland ecosystems.
China and the US are already cooperating in biofuels

China Daily 4 June 2007 China, US to sign non-grain biofuel cooperation agreement
China and the US will soon sign a biofuel cooperation agreement involving non-grain raw material, a senior
government official said.
Ma Kai, director of the National Development and Reform Commission, said at a media briefing that vice
premier Wu Yi discussed the pact with US Secretary of Energy Samuel Bodman and other US officials during
the strategic economic dialogue last month.

NEG: COOPERATION NOW – NUCLEAR TECH
China is already seeking a nuclear technology exchange with the US

The New York Times 18 December 2006 Blessed by a U.S. Official, China Will Buy 4 Nuclear Reactors
HONG KONG, Dec. 17 -- China will buy four Westinghouse nuclear reactors in a deal that shows the continued
attractiveness of American technology, but may also stir worries in Washington that the United States is
selling its competitive advantage one industry at a time.
Energy Secretary Samuel W. Bodman of the United States and Ma Kai, the minister of China's National
Development and Reform Commission, signed a memorandum of understanding for the reactors in Beijing on
Saturday. The deal calls for the state-owned China National Nuclear Corporation to buy the reactors from
Westinghouse Electric, which the Toshiba Corporation, based in Tokyo, bought earlier this year.
Neither side announced a value for the reactors. But outside analysts have suggested the total price tag may
be $5 billion to $8 billion.
Michael R. Wessel, a commissioner of the United States-China Economic and Security Review Commission,
which was created by Congress to review bilateral relations, expressed concern on Sunday that based on the
broad outlines of the deal, 'it appears they are doing what other companies have done, which is to transfer
the technology upfront.'
Such deals limit the long-term benefits to the United States, while clearly helping China, he said. Chinese
companies have been acquiring technology from Western companies in the last year for everything from
aircraft assembly to car design and engine manufacturing.
China's purchase of American nuclear technology could also stir security concerns in the United States,
particularly after objections in Congress last year to a bid by Cnooc, the Chinese-controlled oil and gas
company, for the United States oil company Unocal, and this year to DP World, of Dubai, taking control of
operations at American ports. Both bids ultimately failed.
But having a Bush cabinet official like Mr. Bodman announce the deal could limit objections to the transaction,
at least among Republicans on Capitol Hill, who have tended to be the most outspoken about technology
transfers to China. The deal also comes after Congress has adjourned for the year, which should mute
political reaction.
American politicians may also be cautious about publicly criticizing the deal right away because of the
possibility of an unspoken link between the nuclear technology deal and efforts by Treasury Secretary Henry
M. Paulson Jr. to persuade China to allow faster appreciation of its currency.
Stephen R. Tritch, the chief executive and president of Westinghouse, said in a statement that half the value
of the contract would be done in China, but that the work would nonetheless support 5,000 design,
engineering and manufacturing jobs in the United States. Mr. Tritch said that the deal would also make it
possible, however, for China to build future nuclear reactors with less help from overseas.
'Westinghouse, our U.S. supplier base and our consortium partners will continue to benefit much as we do
now in the Republic of Korea, where recent new plant awards from that country's maturing industry still
provide about $100 million per plant in U.S. scope,' he said.
Mr. Bodman said at the signing ceremony that 'the Chinese were very demanding.' But he did not elaborate
on whether he was referring to the extent of technology transfers, frequently a sticking point in the past, or to
other issues.
Vaughn Gilbert, a Westinghouse spokesman, said that the company had successfully licensed technology to
France for many years and believed that it could properly manage the transfer of technology to China.
Thomas Donnelly, another member of the United States-China commission, said that civilian nuclear reactors
had little military value for China, which has greater interest in miniaturizing its nuclear warheads and
improving missile technology.
Westinghouse prevailed in the bidding over Areva of France and AtomStroyExport of Russia. China excluded
General Electric because it makes boiling water reactors, instead of pressurized water reactors.
Ruth A. Shapiro, the executive director of the Asia Business Council, said that China was in an excellent
position to play multinationals against each other to obtain the most advantageous terms.
'We can be sure all of them offered great deals, given how competitive the supply side is and how thin the
demand is,' she said.
Westinghouse and its rivals still have a chance at further orders. The International Energy Agency predicted
last month that China's nuclear power generation capacity would increase by 9,000 megawatts by 2015, to
15,000 megawatts. The four reactors announced on Saturday, which are to be completed by 2013, will each
have a capacity of 1,100 megawatts.
The transaction is not big enough to make much of a difference in China's contribution to global warming or
air pollution, as China's reliance on coal will continue to dwarf its use of nuclear energy in the years ahead,
energy specialists said.
The International Energy Agency projects that China will add 331,000 megawatts of coal-fired generating
capacity by 2015, for a total of 638,000 megawatts. That is the main reason China is expected to move past
the United States in 2009 as the world's largest emitter of carbon dioxide, the main global warming gas.
Mr. Bodman announced separately in Beijing that the United States would work with China to find ways to
make coal-fired plants more efficient, and to capture and store the carbon dioxide that they release.

NEG: COOPERATION NOW – NUCLEAR TECH
American nuclear reactors were built in China in a show of cooperation

Agence France Presse 16 December 2006 China opts for US firm over French in nuclear energy deal
China has signed an agreement to buy four nuclear power plants from American firm Westinghouse,
scuppering a possible deal with French company Areva, a US official said Saturday.
"China has agreed to purchase four new nuclear reactors for the Westinghouse Electric Company," US Energy
Secretary Samuel W. Bodman said in a statement released by the US embassy in China.
"This represents a multi-billion dollar commitment by the Chinese that should create some 5,500 jobs in the
United States."
The American firm Westinghouse was taken over by Japanese company Toshiba at the beginning of the year.
The contract will lead to the construction of four reactors, divided between Sanmen, in Zhejiang province, and
Yangjiang, in Guangdong, and is part of the Chinese government's drive to increase its nuclear energy
production.
"This is an exciting day for the U.S. nuclear industry," Bodman was quoted as saying in the statement, after
signing a protocol agreement in the Chinese capital with Ma Kai, president of the National Commission for
Development and Reform, the major planning body in China.
Bodman, who had taken part in Friday and Saturday's "strategic economic dialogue" between China and the
US, said the agreement shows what can be achieved between the two countries.
"It is an example that if we work together we can advance not only our trade relations but also our common
goal of energy security," he added after having joining the energy ministers of China, India, Japan and South
Korea at a meeting in Beijing.
Reports early this year said Areva would not get the deal, something the company denied, insisting they were
"on course" to secure the contract.
France's nuclear industry has long been engaged in supplying reactors to China, with four of the nation's 11
nuclear reactors currently operating being French-made.
French President Jacques Chirac used an official visit to China in October to push the Areva deal, "faced with a
(Westinghouse) project that only exists on paper, from people who have not built anything for a long time."
Areva has been operating in China for the past 26 years.
Chirac said there was "a political dimension (in the case) and also a question of balanced trade on the foreign
side that is not in our favor," referring to a ballooning US trade deficit with China.
During trade talks Thursday and Friday, US Treasury Secretary Henry Paulson made a new appeal to his
Chinese partners for "tangible results" in settling their disputes, warning of a rising tide of protectionism in
the United States.
The US trade deficit with China hit a record hit a record 240 billion dollars this year.
In a statement Saturday, the US Commerce Secretary Carlas Guttierrez said the agreement was "an important
victory, both for Sino-American releations and Westinghosue workers."
"This agreement reinforces once again the economic relations the United States has with its second biggest
trade partner and shows China taking a big step in opening new markets to American services and products."

NEG: COOPERATION NOW – OIL
The US is already investing a lot of money into projects involving new oil
exploration
Xinhua News Agency September 11, 2006 U.S. companies invest 5 bln dollars in China's oil, gas
exploration projects: official
HANGZHOU, September 11 (CEIS) -- A senior Chinese official said here on September 11 that U.S. enterprises
have already invested 5 billion U.S. dollars in China's ongoing oil and gas exploration projects.
Deputy Director of the National Development and Reform Commission ( NDRC) Zhang Guobao told the 7th
Sino-U.S. Oil and Gas Industry Forum in Hangzhou that there were currently 20 Sino-U.S. joint oil and gas
exploration projects in China.
"China has a positive and open attitude toward U.S. enterprises involved in oil and gas exploration," said
Zhang. "This means a win- win situation for Chinese and U.S. companies who cooperate on oil and gas
projects based on the principle of mutual benefit, he noted.
NDRC data showed that the crude oil output of China's offshore oil projects, in which US oil companies are
taking part, reached 15. 53 million tons in 2005, accounting for 56 percent of the total output of China
National Offshore Oil Company (CNOOC), the country's offshore oil and gas giant.
Jeffery Jarrett, U.S. Assistant Secretary for Fossil Energy, who is here attending the two-day forum, urged
Chinese and U.S. oil companies to seek more cooperative opportunities to cope with the challenges created
by the global energy shortage problem.
International cooperation is the best solution to the problem, the U.S. official held.
Zhang said China would strengthen cooperation with multinational corporations, including those from the
United States, in global oil and gas exploration based on win-win and mutual benefit principles and
international conventions.
Meanwhile, he said China is striving to diversify oil supply sources and implement a strategic oil reserve plan
in order to ensure oil supply security.
The official did not elaborate on the subject, saying only that China consumed 317 million tons of oil in 2005.
The country's net oil imports stood at 136 million tons in 2005, down 5.3 percent from 2004.
Zhang predicted that China's oil imports will increase due to the rapid growth of the economy, which reached
11.3 percent in the second quarter of this year.
China is "actively" trying to develop new and replaceable energy resources and to optimize the energy
production and consumption structure. This will help reduce the country's dependence on foreign oil, which
hit 42.9 percent last year, he said.
The forum, which kicked off on September 11, is a public partnership which involves governments and
industry representatives from the United States and China.

NEG: COOPERATION NOW – OIL
The US and china already cooperate in the ways to use their oil reserves
The British Broadcasting Corporation 13 December 2007 China, US to cooperate on use of strategic oil
reserves
Beijing, Dec. 13 (Xinhua) - China and the United States, two of the world's largest consumers of oil, have
agreed to cooperate on the use of their strategic petroleum reserves as they wound up a high-level economic
dialogue on Thursday.
"The US and China agreed to strengthen cooperation on construction and management of strategic oil
stocks," said the statement from the US after the conclusion of the 3rd China-US Strategic Economic
Dialogue, which was held in Beijing.
"Coordinated use of strategic petroleum reserves increases energy security for net oil-importing countries
during times of significant supply disruption," the statement said.
The announcement came as world crude prices remained near recent highs. US crude-oil futures surged to 94
US dollars per barrel on Wednesday in New York, the highest level in about two weeks, after news of a fall in
US crude oil inventories.
Imports accounted for 66 per cent of US domestic petroleum consumption last year, while the figure for China
was 47 per cent, which became a net importer of oil during the 1990s as its economy took off.

NEG: COOPERATION NOW – NATURAL GAS
The US is cooperating in the development of natural gas in China

Xinhua News Agency 13 August 2007 CNPC, U.S.-based Chevron to cooperate developing gas field in
Sichuan
BEIJING, Aug. 13 (CEIS) -- The U.S.-based oil giant Chevron has won a bid last weekend to cooperate with
China's largest oil producer in developing natural gas in southwest China's Sichuan Province, business
insiders said.
The cooperation would cover the Luojiazhai gas field which has a high sulfur content, ranging from 7.13
percent to 10.49 percent.
Two serious accidents had happened at the gas field, one in December 2003 when the toxic gas blowout killed
243 people and the other in March last year when thousands were evacuated after gas leak.
The operator of the gas field - China National Petroleum Corporation (CNPC) was said to have begun last year
to seek foreign partners in developing the field, which boasts a gas reserve of 58.11 billion cubic meters.
CNPC, also the parent company of the New York- and Hong Kong- listed PetroChina, expanded the area
covered by the cooperation to four blocks in total this year, and the move would make it more attractive to
foreign partners as some insiders said.
The U.S. company has won the bid over rivals such as France's Total S.A., the Royal Dutch Shell and the
Statoil ASA of Norway, insiders said.
The two companies would have to sign a contract to fix how to split the total output from gas fields under
their cooperation, they said.
CNPC has made no official announcement on the news yet.
Luojiazhai would be the third natural gas development project for the CNPC with foreign partners.
The company signed a deal with Total last year to explore the Sulige gas field in the Erdos Basin of Inner
Mongolia.
CNPC is also jointly developing the Changbei gas field in the same region with Shell, and the two sides
announced in March they had started commercial production in the field.

NEG: OTHER COOPERATION KEY
Due to China’s heavy use of coal, the best cooperation would be in clean coal
technology
State Department Press Releases And Documents (U.S.) September 18, 2006 U.S., China Public and
Private Sectors Cooperate on Clean Energy
Washington -- U.S. and Chinese leaders from the public and private sectors met September 12-13 in Shanxi
province -- an informal gathering of technology and policy experts -- to exchange views on using and
promoting clean coal technology.
The meeting was arranged by the Jackson Hole [Wyoming] Center for Global Affairs and the Peoples
Government of Shanxi Province in China, and sponsored by the Natural Resources Defense Council, an
environmental advocacy group, and other energy and environmental organizations.
The focus of the China Clean Coal Forum -- co-chaired by Yu Youjun, governor of Shanxi province, and Grant
Larson, president of the Wyoming state Senate -- was coal gasification, a growing alternative to coal
combustion that is a more efficient and more environmentally friendly way to produce electricity and other
energy products from coal.
"The collaboration between Shanxi province and the state of Wyoming," said Justin Swift, deputy assistant
secretary for international affairs in the Office of Fossil Energy at the U.S. Department of Energy (DOE), "is an
excellent example of state-to-state support."
At the meeting, Swift gave an overview of coal gasification technology, its worldwide capacity and growth,
and DOE's gasification research and development program.
The Clean Coal Forum is the fifth in a series of unofficial meetings held to develop and implement an agenda
for U.S.-China clean energy cooperation. The meetings arose from an alliance between the largest coal-
producing regions in the United States and China -- the state of Wyoming and the province of Shanxi.
STATE-TO-STATE COLLABORATION
Jackson Hole -- in the 1800s the term "hole" described a high mountain valley -- is a spectacular area in
northwest Wyoming, known for its proximity to three national parks, vast mountainscapes, abundant wildlife
and world-class skiing.
It is also home to the Jackson Hole Center for Global Affairs, whose forward-looking membership created the
U.S.-China Clean Energy Initiative.
The initiative began in 2003, when Jackson Hole resident John Turner, assistant secretary of the State
Department's Bureau of Oceans and International Environmental and Scientific Affairs from 2001 to 2005,
invited Shanxi officials to his hometown to discuss environmental issues important to both regions.
Three meetings took place in 2003 and 2004, in Shanxi and Jackson Hole, covering a range of energy topics
and involving experts and officials from both regions.
"The doors have opened up in the age of globalization," said David Wendt, president of the Jackson Hole
Center for Global Affairs, "to include so many different potential partners from so many sectors on common
issues."
The initiative is also a vehicle for involving the private sector, Wendt said, which has "the resources and
technology to make the necessary investments in clean energy priorities."
The collaborators in Wyoming and Shanxi, Wendt said, "identified a strong interest in integrated gasification
combined cycle, a coal gasification process, not coal combustion, that is by far the most energy-efficient

process, and efficient in terms of other resources -- water, for example -- in using coal for electric power
generation."

NEG: OTHER COOPERATION KEY
China wants the US to cooperate with them by helping develop oil fields. It is
the best solution for Chinese energy security
The Wall Street Journal September 12, 2006 Chinese Official Calls On U.S. To Jointly Develop Oil Fields
HANGZHOU, China -- A senior Chinese official for energy policy said China and the U.S. should jointly develop
oil fields to protect against the risks of supply disruptions and the rising costs of production both countries
face.
Zhang Guobao, vice chairman of the National Development and Reform Commission, said the U.S. and China,
the world's two biggest oil consumers, "need to oppose the cold war mentality" and work together to
guarantee stable world oil supplies and prices. His comments, at an industry forum yesterday in the eastern
Chinese city of Hangzhou, came days ahead of a planned meeting between top U.S. and Chinese energy-
policy makers.
Mr. Zhang's remarks appeared aimed at growing anxiety in the U.S. over China's energy ambitions. China's oil
demand has surged in recent years, far outstripping domestic supplies, as automobile purchases have
boomed and the economy has grown around 10% or more annually. That has prompted China's energy
companies to pursue more overseas oil deals, triggering concern in the U.S. Those worries last year forced
Cnooc Ltd., China's largest offshore oil producer, to drop a bid to buy California-based Unocal Corp.
U.S. and other foreign oil companies are already working alongside Chinese counterparts in developing some
Chinese oil fields. It isn't clear if Mr. Zhang's suggestion to increase cooperation will be backed up by any
concrete proposals when he meets tomorrow with his counterpart, Karen Harbert, U.S. assistant secretary of
energy for policy and international affairs.
China's overseas energy push is expected to be a central topic at that meeting, the second in what is called
the U.S.-China energy-policy dialogue, which will include Chen Deming, who is in line to succeed Mr. Zhang
when he retires this year.
China's big oil companies, all of which are government-controlled, are relatively minor international players.
But they have deep pockets, an ability to sweeten deals -- with perks like government loans or infrastructure
projects -- and a readiness to go into countries that the U.S. shuns such as Sudan or Iran. Those factors are
making them serious competitors. Some U.S. officials fear China's quest to own energy sources in places like
Africa and Latin America could keep out U.S. oil companies and undermine U.S. foreign-policy efforts.
U.S. energy firms also are concerned about China's policies governing its domestic market. U.S. oil producers
have quietly complained to U.S. officials about a windfall energy tax imposed last March on both domestic
and foreign companies without any advance warning. Oil companies are getting the bills, but they still aren't
certain exactly how the new tax -- which is assessed on a sliding scale on oil sold for more than $40 a barrel --
is being calculated. "The single biggest message that I have heard from U.S. [oil] industry here is the need for
better transparency when doing business in China," said Jeffrey Jarrett, assistant secretary of fossil energy at
the U.S. Energy Department. The new tax "snuck up on them," he said.
Separately, Mr. Zhang predicted yesterday that China would be able to reach its goal of increasing its energy
efficiency despite an early setback. "The saving room is great. We can reduce energy by using imported
technology," he said. "We have confidence we can reach this goal."

NEG: ENERGY COOPERATION HURTS RELATIONS
US cooperation will only intervene with projects that China is making to secure
its resources
BBC News June 23, 2006 US exerts pressure to hinder opening of China-Kazakhstan oil pipeline – paper
Urumqi, 20 June: Kazakhstan's crude oil, which arrived at Xinjiang's Alataw Shankou Port on the 25th of last
month, is still confined within Delivery Valve No 12105 of the Alataw Shankou Metering Station inside the
Chinese border, and there is still no exact timetable for the official oil delivery through the China-Kazakhstan
oil pipeline.
A staff member of the China National Petroleum Corporation [CNPC] told our Ta Kung Pao reporter that the
petroleum companies of China and Kazakhstan had reached agreement on measuring crude oil delivered
through the China-Kazakhstan oil pipeline and other technical details. As to why it is unable to open the sluice
and deliver the oil, the staff member refused to disclose the reasons, saying only, "I can only tell you that the
matters inside are very sensitive."
A knowledgeable source told this reporter: "The reason for the delay in opening the last valve of the China-
Kazakhstan oil pipeline, which makes it impossible for the pipeline to officially deliver oil, is that the United
States has exerted pressure."
This knowledgeable person said: After the official delivery of oil through the China-Kazakhstan oil pipeline, in
the near term, the US share of oil imported from the Central Asian region will decrease but, in the long term,
oil from the Caspian Sea, which keeps one-fifth of the world oil in reserve, will also be delivered to China
through this pipeline and the US share of oil imported from the Caspian Sea will also decrease considerably.
Therefore, the United States has no choice but to exert pressure on Kazakhstan to hinder the opening of the
China-Kazakhstan oil pipeline.
Moreover, the oil pipeline is also China's first major artery of overland energy delivery and, as it does not go
through a third country, it is very steady and safe. This will also help reduce China's present risk of relying on
the Strait of Malacca for 80 per cent of its crude oil delivery. For the United States, the opening of the China-
Kazakhstan oil pipeline has touched a sore spot on the US global security strategy.
In the view of this knowledgeable source, as China is Kazakhstan's close economic and trading partner,
Kazakhstan cannot afford to lose this trading partner. However, the United States is Kazakhstan's political
partner, and Kazakhstan's weapons and equipment are mostly supplied by the United States. If Kazakhstan
and the United States quarrel openly, the United States also will probably start a colour revolution in
Kazakhstan and, consequently, Kazakhstan cannot but take into account the serious consequences.
"Therefore, because Kazakhstan cannot afford to offend anyone, it can only follow a middle-of-the-line road,
which has resulted in the official delivery of oil through the China-Kazakhstan oil pipeline being delayed again
and again," said the knowledgeable source.
The construction of the China-Kazakhstan oil pipeline project started in September 2004. With a total length
of 962.2 km, a China-Kazakhstan joint investment of 700m US dollars, and a designed annual oil delivery
capability of 20m tonnes, the pipeline was completed in November 2005. Kazakhstan began to officially fill
crude oil into the pipeline in December 2005 of the same year.

NEG: AFRICA OIL SOLVES CHINA
China invests in Africa for oil and new export markets

The Associated Press, November 5, 2006. “China, Africa sign $1.9B in Trade Deals.”
http://www.cbc.ca/world/story/2006/11/05/china-africa.html
China and Africa ended an unprecedented summit Sunday by signing deals worth $1.9 billion US and pledging
to boost trade and development between the world's fastest-growing economy and its poorest continent.
Chinese President Hu Jintao already had pledged billions of dollars in aid and loans to Africa during the two-
day meeting in Beijing, part of the Chinese government's efforts to strengthen its ties to Africa amid its
search for new oil sources and export markets. In a declaration read at the end of the Forum on China-Africa
Co-operation, China and 48 African countries pledged a partnership based on "political equality and mutual
trust, economic win-win co-operation and cultural exchanges."

NEG: OIL COOPERATION SOLVES
Oil offers possibilities of strengthening the economic ties between the two
countries, increasing cooperation
Xinhua News Agency September 25, 2006 U.S. oil companies are active in exploring China's oil market
Deputy Director of the National Development and Reform Commission (NDRC) Zhang Guobao said at the
Seventh Sino-U.S. Oil and Gas Industry Forum held in Hangzhou recently that U.S. oil companies have already
invested US$5 billion in China's ongoing oil and gas exploration projects.
He said that currently there are 20 Sino-U.S. joint oil and gas exploration projects in China. For a certain past
period, the investment zeal of foreign oil companies over the country's oil/gas exploration had lessened. The
obvious example is that foreign oil majors withdrew from the W-E gas pipeline. The forum sends a signal that
U.S. oil companies have recovered their passion over oil/gas exploration in China.
'China has a positive and open attitude toward U.S. companies involved in oil and gas exploration and this
means a win-win situation for Chinese and U.S. companies who cooperate on oil and gas projects based on
the principle of mutual benefit', said Zhang.
According to NDRC, the crude oil output of China's offshore oil projects, in which U.S. oil companies are taking
part, reached 15.53 million tons in 2005, accounting for 56% of CNOOC's total crude output.
Jeffery Jarrett, U.S. Assistant Secretary for Fossil Energy urged at the forum Chinese and U.S. oil companies to
seek more cooperative opportunities to cope with the chal-lenges created by the global energy shortage
problem. International cooperation is the best solution to the problem, he said.
Zhang said that China would strengthen cooperation with multinational corporations, including those from the
U.S., in global oil and gas exploration based on win-win and mutual benefit principles and international
conventions.
Meanwhile, he said China is striving to diversify oil supply sources and implement a stra-tegic oil reserve plan
in order to ensure oil supply security.
According to Zhang, China consumed 317 million tons of oil in 2005. The country's net oil import stood at 136
million tons in the year, down 5.3% from 2004. He predicted that China's oil imports would increase due to
the rapid growth of the economy, which reached 11.3% in the second quarter of this year.
However, China will try to reduce its reliance on oil import by basing energy supply on coal and developing
new and renewable energies. Zhang said China is 'actively' trying to develop new and replaceable energy
resources and optimize energy production and consumption structure. In 2005, China's dependence on oil
import hit 42.9%.
According to statistics of NDRC, China's coal output reached 2.22 billion tons in 2005 and accounted for
68.7% of the national total consumption of non-renewable energies, while oil and natural gas accounted for
24%.
China is the second largest energy producer in the world and the top exporter of coal and coke. China oil
import accounted for only 6% of the world's total in 2005 and China plays a limited role in pushing up the oil
price, said Zhang.
As China reduced its oil import in 2005, the world's oil price still saw a rise of 36.8% over the previous year,
which shows that China's effect on the soaring international oil price has been seriously overplayed, said
Zhang.
According to Wang Nengquan, the chief-economist with Sinochem International Oil Co. Ltd., hedge funds and
other speculative funds are playing an important role in the current crude oil futures market. It is estimated

that hot money flowing into the crude oil futures market has been over US$1 trillion, which 'makes the oil
price far away from the real value'.

NEG: IRAN SANCTIONS SCENARIO NON-INHERENT
China approves of sanctions—voting record proves

Shirley A. Kan (specialist in Asian security affairs, foreign affairs, defense and trade divisions) CRS report for
Congress “China and the proliferation of weapons of mass destruction and missiles” December 13 2007
After Iran announced that it would respond on August 22, 2006, China voted on
July 31 with other members of the UNSC (except Qatar) for Resolution 1696,
demanding that Iran suspend nuclear enrichment; calling upon countries to prevent
technology transfers to Iran’s nuclear enrichment and missile programs; requesting
an IAEA report on Iran’s compliance by August 31; and warning of sanctions if Iran
does not comply. After negotiations over Russian and PRC objections to the first
U.S. and European draft resolution on sanctions, China voted with all other Security
Council members for Resolution 1737 on December 23, 2006, which invoked
Article 41 of Chapter VII to require Iran to suspend nuclear enrichment and
reprocessing activities, and heavy water-related projects. On January 5, 2007, in
Beijing, PRC President Hu Jintao stressed the “unanimous” adoption of 1737 to
visiting Iranian nuclear official Ali Larijani. After negotiations on additional
sanctions on Iran (during which China and Russia objected to a ban on Iran’s arms
imports and export credit guarantees for doing business in Iran),21 China voted with
all other members of the U.N. Security Council for Resolution 1747, adopted
unanimously on March 24, 2007. Citing Article 41 of Chapter VII, the resolution
included a ban on Iran’s arms exports.
However, the United States has raised the issue with China of its violation of
UNSC Resolutions 1737 and 1747. In particular, U.S. officials reportedly said in
July 2007 that earlier in the year, a PRC “entity” (probably one under U.S. sanctions)
tried to ship a large amount of chemicals used to make solid fuel for ballistic
missiles. Cooperating with U.S. intelligence, Singapore intercepted the container
from China on its way to the Shahid Bagheri Industrial Group in Iran.22 This Iranian
organization was listed in the Annex of UNSC Resolution 1737, but sanctions for
entities or people in the Annex involve restricting travel and freezing financial assets.
Still, Resolution 1737 decided that all States shall take the necessary measures to
prevent tranfers directly or indirectly from their territories that could contribute to
23 Karen DeYoung, “Iranian Defiance of U.N. Detailed,” Washington Post, May 24, 2007;
State Department, Daily Press Briefing, July 26, 2007.
Iran’s development of nuclear weapon delivery systems. Resolution 1747 called for
restraint in transfers related to arms and missiles to Iran.
After the IAEA reported on May 23, 2007, that Iran continued nuclear
enrichment activities, the Bush Administration has called for a third UNSC
resolution with tougher sanctions on Iran.23 The process has become protracted. On
September 28, China joined with the United States, France, Germany, Russia, and
United Kingdom in issuing a foreign ministers’ statement in support of negotiations,
the IAEA, as well as a third UNSC resolution with sanctions, pending reports by the
IAEA and the European Union in November. On October 17, China refused to
attend a meeting in Berlin on Iran’s nuclear program citing “technical” difficulties,
but U.S. officials say China showed displeasure over the award of the Congressional
Gold Medal to Tibet’s Dalai Lama. In addition to the three tracks supported by
China (involving diplomacy, the IAEA, and current sanctions), the United States and
European allies have discussed sanctions (separate from talks with China and Russia)
and possible use of force. (On U.S. policy towards Iran, see CRS Report RL32048,
Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.)

NEG: NO IMPACT TO ENERGY CONFLICTS
Chinese energy security poses no threat to the US and its energy security
Leon Hadar Washington Correspondent 24 May 2007 China's energy policy is no threat
Chinese efforts to lock up oil supplies with long-term contracts may even be advantageous to the US, analysts
suggest
THERE has been a lot of anxious talk in Congressional hearings and think-tank seminars in Washington these
days about the alleged threat to US 'energy security'. More specifically, foreign policy analysts point out that
China's soaring demand for oil, which is part of the broader surge in global energy consumption, is driving up
prices and imposes costs on the US economy.
They also argue that Beijing's energy policy is posing a direct threat to America, since China is negotiating a
preferential long-term purchase agreement that could deny Americans even the opportunity to bid for oil.
These experts are warning the administration, Congress and the public that China's strategy of 'locking up'
the world's remaining oil supplies through long-term purchase agreements and aggressive diplomacy could
lead Washington and Beijing into a struggle which is being described in the American media as the
'geopolitics of oil'.
And they recommend that the US focus its foreign policy against the Chinese strategy by, among other ways,
creating its own preferential agreements to secure US access to oil and perhaps, even exclude the Chinese.
But in a new policy paper titled Energy Alarmism: The Myths That Make Americans Worry About Oil, two
leading political economic analysts reject this alarmism over a Sino-American energy war, arguing that
Chinese efforts to lock up supplies with long-term contracts will, at worst, be economically neutral for the US
and may even be advantageous.
If anything, according to Eugene Gholz, professor of public affairs at the University of Texas, Austin, and Daryl
Press, who teaches government at Dartmouth University, the main danger stemming from China's energy
policy is that current US fears may become a self-fulfilling prophecy of Sino-US conflict.
The two analysts contend that fears about the implications of China's energy policy are greatly exaggerated.
Yes, China's soaring demand for energy and its implication for global oil prices could adversely affect the US
and other oil consumers. Indeed, many oil analysts believe that Chinese demand accounts for a substantial
part of the oil price increase since 2000.
But as Prof Gholz and Prof Press emphasise in their paper, China's efforts to reach long-term purchase
agreements merely change the patterns of global oil trade but not the overall level of global consumption,
and will therefore not have a major impact on oil prices. Moreover, Chinese investment in the oil exploration
and extraction business could possibly be advantageous for the US economy.
The energy alarmists in Washington paint a picture of a coherent Chinese national policy that locks up
sources of oil supplies, leaving less oil on the world market for the American economy which is based on free
market principles. They point out that the Chinese government encourages companies to sign long-term
contracts to buy large quantities of oil from producers around the world.
This allegedly establishes a 'preferential relationship', which supposedly gives decision-makers in Beijing
control over future oil supplies, and Chinese diplomats cultivate relationships with the governments of
countries with large oil reserves, as part of an effort to persuade them to sell to the Chinese in below-market
prices.
According to Prof Gholz and Prof Press, 'the Chinese arrangements may lock up supply, but they also sate a
substantial portion of world demand'. Hence, if China buys concessions from foreign governments to pump oil
from their wells or to prospect for new fields on their territory and then chooses to ship the crude to Chinese
customers rather than to sell it on the open market, the Chinese action will just free up oil pumped by other
companies so that they can sell it to non-Chinese consumers.
The two analysts suggest that even if one assumes that the Chinese government is willing to sacrifice
economic efficiency for non-economic goals and decides not to resell the oil pumped by Chinese companies,
despite the opportunity to make big profits, the end result would be the same thing as China deciding to pay
more for oil than other consumers.
'The point is that China's current activities, whether or not they are characterised as mercantilist efforts to
lock up oil supplies, make no difference for Americans' long-run ability to buy oil in the market,' Prof Gholz
and Prof Press write.
In fact, some Chinese oil policy initiatives are even good for American consumers. Chinese firms have spent
billions of dollars to purchase concessions and to drill for oil in some areas of the world that Western
companies wouldn't consider likely to have a high enough return on investment.
'If those prospects pay off, more oil will enter the oil market, driving down prices for all consumers; if the
prospects fail, Chinese rather than American shareholders will cover the losses,' Prof Gholz and Prof Press
conclude. The two authors caution US policymakers to recognise that because of the flexibility of the global
oil market, there is no reason for the US to copy China's energy policy; to try to block the developments of
China's oil industry, or, worst of all, to adopt policies to weaken the Chinese economy.
These are exactly the kind of policies that could end up driving up oil prices, threaten US 'energy security' and
hurt both the US and Chinese economies.

NEG: MALACCA CP SOLVENCY
The US should cooperate militarily through the security of the strait of Malacca.
It solves for both China’s energy security and for potential Taiwanese conflict
Commander Jim Cooney, US Navy “Chinese oil dependence, opportunities and challenges”
http://www.strategicstudiesinstitute.army.mil/pdffiles/ksil193.pdf
Three issues are key to Chinese foreign policy with respect to her dependence on foreign
oil. The first is the security of the Strait of Malacca, the next is China's view of the United States'
role in the Middle East and how China is attempting to gain influence. Finally there is the
possibility that China could take unilateral action to secure more domestic oil for herself. All
three issues require action on the part of the United States.
The security of the Strait of Malacca is where Chinese and United States interests
coincide. An accommodation by both parties on this can be leveraged to help defuse the two
issues that the United States and China disagree on with respect to oil supply security. Both the
United States and China benefit from the spread of a global system of free trade, and the safe
transit of shipping though the Strait of Malacca is critical. The United States, partnering with
Singapore, Indonesia, and Malaysia, should invite Chinese participation in regional maritime
security exercises. By demonstrating partnership, rather than a cold war capitalism-againstcommunism
framework, the Chinese will not feel threatened by the U.S. military in the region.
PLAN assets could be brought in to share the burden of security operations leading to a greater
understanding of security issues between the United States, China, and other South Asian
countries.
There are, potentially, two second order effects to this sort of military cooperation.
Regional military to military cooperation could help defuse the Spratly Island issue by promoting
closer relationships with the countries competing for the islands. Additionally, if the U.S. and
China take steps towards cooperating on the security of global free trade, a culture of military
cooperation instead of competition could be established which may reduce tensions in other
areas such as the perceived U.S. dominance in the Middle East, and in the long term, the
Taiwan issue.
relatively inexpensive oil to the world. Along with the indirect approach of cooperating on
Malacca Strait security, the United States must take up concerted and straightforward
negotiations with the Chinese with respect to dual use technology provided to Iran and any
other Middle Eastern state. A Middle East that is roughly balanced in economic and military
power between the various states in the region is the best way to remove the American
presence. By super-empowering one Middle Eastern state with nuclear weapons, China is
taking steps to de-stabilize the region and actually threatens the continued supply of cheap oil.
The forceful takeover of the Spratly Islands is the least probable scenario given the
current world situation. However, it has the greatest probability of destabilizing the entire South
Asia region as well as the global oil economy. The best way to prevent such an aggressive act
by China is for the United States to maintain a credible deterrent force in the Western Pacific,
even if the North Korean and Taiwan issues are peacefully resolved someday. A credible United
States naval presence will maintain regional stability and forestall any sort of Chinese
adventurism.

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Zarefsky Juniors 1/75

China Advantage Andrew Jones

“My evidence drinks your evidence’s milkshake”

COMPETITION FOR OIL MAKES CONFLICT WITH CHINA INEVITABLE.

“My evidence drinks your evidence’s milkshake”

THESE CONFLICTS ESCALATE TO WAR – ONLY STRENGTHENING ENERGY SECURITY

“My evidence drinks your evidence’s milkshake”

Conflicts escalates and causes nuclear war

And, It destroys civilization

“My evidence drinks your evidence’s milkshake”

The search for a sustainable source through alternative energy is an opportunity

And, it is a critical time to reengage china to solidify cooperation

Strong U.S. – Sino relations and cooperation prevents extinction. Cooperation is

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

China’s newfound heavy demand for oil Hurts US-Sino relations

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

U: CONFLICT NOW – CLIMATE

“My evidence drinks your evidence’s milkshake”

Chinas control over oil prices further strains US-China relations

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

US Sanctions on Chinese oil companies hurt the overall relationship

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

Perceived threats to Chinese oil resources will also result in war

“My evidence drinks your evidence’s milkshake”

How China's energy hunger safeguards Iran

“My evidence drinks your evidence’s milkshake”

Without sanctions on Iran, unchecked proliferation would spread through the

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

A Chinese shift to alternative sources of energy is inevitable, the only question is

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

It is in both countries interests for cooperation on energy to happen

“My evidence drinks your evidence’s milkshake”

The US and China want to cooperate in the field of nuclear energy.

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

CHINA WANTS TO COOPERATE WITH THE US IN THE AREA OF ENERGY

One of the 14 documents was a memorandum of understanding on cooperation of biofuel development

S: CHINA WANTS COOPERATION

China includes cooperation with the US in their plans of energy policies

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

AT: IMPACTS INEVITABLE

Impacts not inevitable, relations solve the root causes.

“My evidence drinks your evidence’s milkshake”

A strong China is good for US security

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

“My evidence drinks your evidence’s milkshake”

Chinese government gives top priority to human rights

“My evidence drinks your evidence’s milkshake”

China US coop = peace

“My evidence drinks your evidence’s milkshake”