ESSAY

Will China Dominate The 21st Century?

Will China Dominate The 21st Century?

Introduction

China's economic reform policy led to strong economic growth of the country. However, the positive effects of the enormous growth have also resulted in an extreme increase in China's consumption of energy. Certainly, China is an enormous energy producer; however, it needs the whole of its extracted energy for its own requirements. To the fact is that China's rising energy production can hardly keep up with the rising consumption. In this essay, I will discuss the major issues that could decide whether China will dominate the 21st century or not. The main factor that will dictate dominance is energy, therefore, I will mainly focus on the energy sector of China that will serve as a marker of global dominance.

Especially in the country's ever increasing oil demand, China consumes more then it extracts. To date, China's energy import dependency already amounts 50% of its total consumed energy, according to some sources, even 60% or higher. This leads to the thesis that China's rising crude oil demand forces China to enter new import alliances with alternative regions respectively spheres of influence. How far this goes and in what reactions these relations result by industrial countries is described in the present work.

This work describes China's economic reform and analyzes the rising needs of its energy demand. At the core of the work is the examination of China's future strategy to guaranty its required energy reserves.

The theoretical border, therefore, is the so-called Limits of Growth theory (Simmons, 2000). When this theory is applied to China's increasing energy demands two conclusions can be drawn. First, since crude oil as well as other fossil fuels is not an unlimited raw material, old established economic powers on the global market have already divided the world's supply of oil and fossil fuels amongst themselves. However, economic growth is restricted by resource energy. To secure its future energy resources China must, as a young economic power, follow alternative strategies and come to new arrangements on the global market.

Second, on account of increasing resource shortages and simultaneous economic growth, an exponential increase of competition of resource access is to be expected. This spiral of ever-increasing competition in the energy market arises on account of the rising demand and diminishing supply. China in this connection is not only the country with the world-wide highest number of inhabitants, but also with the fastest economic growth and the largest increase of energy consumption. China thus strongly affects the world-wide oil market, more specifically the contest around resources and price formation.

This document analyzes China's economic growth on the basis of the classical free trade theory, and describes its energy demand growth, as well as its energy system. It also discusses the energy resources issue in combination with the limits of growth theory and, based on this background, looks at China's international energy security strategy.

Energy Consumption

Energy supplies have had a decisive significance for economical activities. The ample availability of cost-effective fossil fuels influenced substantial rapid growth ...