A Chinese state-owned energy company’s bid to buy a U.S. oil firm threatens American security and exposes the flaws in a 5-year-old law. Rep. Joe Barton, Texas Republican, promises to hold an energy and commerce committee hearing this month on the proposal by Chinese National Offshore Oil Co. to buy Unocal. Others in Congress have asked President Bush to “investigate the economic and national security implications of this potential acquisition.”
These concerns are appropriate, but we must look beyond the sale of an oil company and consider China’s track record since the passage of legislation granting them Permanent Normal Trade Relations.
Advocates promised PNTR would create American jobs, reduce our trade deficits, improve access to China’s financial and agricultural sectors, provide greater access to technologically skilled workers, improve human rights, make China less threatening and adhere to World Trade Organization standards. These advocates were not only naive, they were wrong.
Mr. Barton’s committee includes Rep. Sue Myrick, North Carolina Republican, who supported the favorable trade status despite warnings. She voted with the majority for the bill because of “economic pressure” back home.
On May 23, 2000, Wei Jingsheng and I warned Mrs. Myrick against PNTR. During an office visit, Mr. Wei, a former Chinese prisoner and political dissident, warned Mrs. Myrick if U.S. doesn’t fight the world’s largest tyranny politically, it will have to fight it economically and, eventually, militarily. I warned the congresswoman that granting PNTR would fuel the already serious security Chinese threat to U.S. interests.
China is the world’s third-largest trading economy with a combined $1,154 billion in imports and exports in 2004. PNTR cost America manufacturing jobs and created a huge trade deficit — $162 billion in 2004. Cheap Chinese imports and China’s policy of pegging its currency (the yuan) to the U.S. dollar make American exports to China unfairly expensive.
China joined the WTO in 2001 and agreed to significantly reduce a variety of tariff and nontariff barriers. In 2004, the U.S. Trade Representative issued a WTO compliance report indicating China’s efforts have remained “far from complete and have not always been satisfactory.”
PNTR increased American access to high-tech workers but that came with a high security price. China has created a robust human spy network in the U.S.: seven diplomatic establishments; 2,750 commercial officers and 150,000 students reside here. More than 27,000 delegates visit the United States annually; and firms employ hundreds of thousands of guest “high-tech” workers. The U.S. bleeds technology with the return home of every Chinese citizen.
PNTR has not improved China’s human rights record. The State Department’s 2004 Annual Report on Human Rights classified China’s record as poor. China continues arresting and detaining activists, defense lawyers advocating on behalf of dissidents, intellectuals expressing political views, persons attending house churches and workers protesting for their rights.
PNTR has helped China’s defense budget balloon to $80 billion, third-largest in the world.
Taiwan independence is also in peril. In March, China enacted an “anti-secession law” targeting Taiwan’s independence movement. The new law is backed by a phalanx of new weapon acquisitions. Since 2000, China has increased short-range missiles aimed across the straits to 725. It has launched 13 new submarines and built 23 amphibious ships.
China now has an airborne warning and control system for off-shore operations. The Chinese AWACS will control a new fighter, the J-10, which is on par with the US F-16, and it will receive real-time intelligence from the Israeli built “Harpy,” an anti-radar drone.
China’s military buildup may serve a grander strategy. “China is becoming a significant power in the region,” said U.S. Navy Adm. William Fallon. “I believe they are beginning to look outward, and they haven’t done so for decades.”
Adm. Fallon cautions China has acquired “a lot of high-tech equipment that doesn’t … seem defensive to me.”
PNTR has played an indisputable role in China’s economic and military growth. A reliable and growing energy supply is crucial to sustain that growth. China imports 3.2 million barrels of oil daily. By 2020, its energy requirements may increase fivefold.
China’s energy needs compel it to aggressively build alliances to win oil and gas agreements. In oil-rich Nigeria, it has built a railroad network to bolster an alliance. In the terror state of Sudan, it has developed an oil pipeline.
One of the largest importers of Iranian energy, China also has deals with Syria. Recently, Chinese National Overseas Oil Exploration Co. officials met on oil ventures with the Kuwait Foreign Petroleum Exploration Co.
China’s global quest for oil poses a threat to U.S. security if it buys so many foreign oil fields and companies that it has more energy than it needs. The excess could be used to leverage an enemy. This is the crux of the current concern about China’s proposal to buy major U.S. oil firm Unocal.
The bid to purchase UNOCAL, the buildup of the Chinese military and China’s refusal to conform to PNTR expectations demands a new foreign relations perspective. The context is provided by insider Chen Yonglin, until recently a senior Chinese consulate political officer in Australia. “The United States is considered by the Chinese Communist Party as the largest enemy, the major strategic rival,” Mr. Chen explained.
Congress must reassess U.S.-China policy. We can only hope that, during the reassessment, members such as Mrs. Myrick won’t be blinded by the counterfeit Chinese dollar signs waived by naive and giddy businessmen.
Robert Maginnis is a retired U.S. Army officer, a national security and foreign affairs analyst for television and radio networks and a senior systems analyst with BCP International Ltd. in Alexandria, Va.