American leaders have good reason to worry about the price
of oil. Oil price shocks can play a decisive role in ending
a presidency, as in the cases of Presidents Jimmy Carter and
George H. W. Bush. The Nov. 2 election may well hinge on the
cooling of the economic recovery caused by sustained high
levels of oil prices. But that's not really what the next
president should be so concerned about. The real oil shocks
- much more damaging and sustained than ever before - will
come a bit later, but much sooner than anyone had expected,
from a part of the world not even discussed seriously in the
current campaign: China.
With 1.3 billion people, a phenomenal rate of economic growth,
and an insatiable consumer demand for cars, China will soon
come into direct conflict with the United States over oil,
the world's most valuable and increasingly scarce industrial
commodity.
The pressure on supply will inevitably jack up prices to levels
that would make today's motorists and electricity customers
blanch.
The conflict is unavoidable. It could create geopolitical
tensions and cause dramatic shifts in U.S. foreign policy
that may overshadow today's preoccupation with global terrorism.
And there are no easy solutions to avert it, only regrets over
this nation's missed opportunities in decades past to develop
viable alternative energy sources to lessen U.S. dependence on
imported oil.
Any such program, initiated today, will take far too long to
bear fruit in time to avoid an economic and political clash with
China over oil.
Just a quick glimpse at the figures involved makes clear the
dimensions of the problem. China's economic growth has bubbled
along at a steamy pace of 8 to 10 percent a year for the past
decade.
With that growth, private auto sales in that vast nation have
skyrocketed from token levels 10 years ago - only 220,000 were
sold as recently as 1999 - to nearly 2 million this year. Last
year alone, China's automobile sales increased by a staggering
69 percent.
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