Implications of Chinas Charm Offensive for the Sino-Venezuelan Relations - Research Paper Example

? The Sino-Venezuelan Energy Security Relations: Implications of China’s ‘Charm Offensive’ for the Sino-Venezuelan Relations and the World Powers’ Energy Security Name of Student Course Title Name of Professor Date of Submission Introduction Although the emphasis of China’s policies over the recent decades has been on national economic rebuilding and development, China’s foreign policy has fulfilled a considerably vital part in building and sustaining an international setting. China’s ‘charm offensive’ or peaceful and positive relations with other nations and its status in the global system are very beneficial for attaining its policy goals. China’s vision of global amity is both an objective in itself and a way to attain its goal of economic progress and nonviolent emergence as a world power. Without a largely harmonious and established global structure, China’s economic growth would have been impossible (Kurlantzick, 2007). Hence, China’s national economic rebuilding and foreign policy are strongly interwoven with each other. Basically, China’s foreign policy is obliged to serve its entire economic program, and its rising economic power has allowed China to become more involved and influential in the arena of international relations. However, China’s relationship with Venezuela and its security policy toward the oil-producing Latin American country are, according to numerous scholars and policymakers, a threat to the United States. China and Venezuela openly declare their ambition of curtailing U.S. hegemony, and has made steps to create a multipolar world where the global power of the United States would be weakened. This paper analyzes several interconnected issues: first, the Sino-Venezuelan relations, particularly China’s energy security policy toward Venezuela; second, China’s charm offensive and its role in the tension between U.S. and Venezuela; and third, the predicted transformation of China’s ‘soft power’ into a fierce global competitor for energy resources. The Sino-Venezuelan Relations: How Close is ‘Close’? Since the advent of the 21st century, as China emerges as a global force and Latin America acquires greater international reputation, Sino-Latin American relations have grew quickly and with important strategic influence on the changes occurring today in the international economic and political system (Hongyi, 2010). From a conservative geopolitical perspective, Latin America and China are isolated from each other and appear improbable allies. After the establishment of New China in 1949, Latin America and China largely engaged in people-to-people transactions without conducting formal diplomatic affairs. Then again, the 1970s is described by reconciliation in Sino-American relations and the re-admission of China into the United Nations, which witnessed China start building diplomatic relations with most nations in Latin America (Locatelli, 2011). Since 1978, China enforced a strategy of opening up and restructuring, which involved the country conducting major policy reforms toward Latin America and stressing trade and economic partnership with this region. In the recent years, the developing economy of China and fast growing power in the global arena has become ever more appealing to countries of Latin America, which view Beijing as a major site for the expansion of their foreign economic and political ties. The strategic features of China’s diplomatic relations with Latin America have involved building strategic ties with Peru, Argentina, Mexico, Brazil, and Venezuela (Locatelli, 2011). Latin America has a big market and rich resources, and the region has eventually evolved into a foundation for global development. Particularly, Latin American countries have turned out to be strategically vital to China, both in political and economic terms. China’s policy toward Latin America is rooted in the relative advantage theory—its objective is to gain access to natural resources or raw materials for domestic economic development, as well as outside political partnership for the diversification of the global system. Venezuela is at present the biggest sole receiver of the total investment of China in Latin America. By 2000, Sino-Venezuelan trade relations had already generated millions of dollars. During his visit to Latin America, Jiang Zemin discovered an eager partner in Chavez, who declared his respect for Mao, supported China’s hosting of the Olympics in 2008, and most especially, avowed to challenge a U.N. decision to denounce China for its human rights issues (Roett & Paz, 2008). As proclaimed by Chavez, “We don’t believe any country in the world has the right to condemn another… We are going to vote against the resolution” (Erikson, 2006, 83). The arrangements made during Jiang’s visit involved a 60 million investment and several agreements in taxation, agricultural, mining, and energy sectors. Chavez also disclosed that both Venezuela and China talked about the cooperative production of Chinese military equipment in Venezuela (Amineh & Yang, 2012). Chavez went back to Beijing in May 2001, wherein Jiang commented that China had “a positive attitude towards formulating a 10-year plan of cooperation between the two countries” (Erikson, 2006, 83-84). An agreement between the two countries was made permitting China to purchase Venezuelan oil as a compensation to an important loan to the agricultural sector of Venezuela. Both countries also agreed to a Strategic Energy Plan, which allows Venezuela to boost oil trade with China while at the same time enhancing its agricultural efficiency (Jilberto & Hogenboom, 2007). A Chinese announcement given during the visit of Chavez emphasized the willingness of both countries to try to build a ‘multi-polar’ global system. Jiang was cited as claiming that “the process of multi-polarization will be a tortuous and long one, but it is an irreversible historical trend” (Jilberto & Hogenboom, 2007, 473); he further stated that “it is important for the Chinese and Venezuelan people to carry out cooperation in the economic and trade, science and technological areas in a down-to-earth and step by step manner” (Erikson, 2006, 84). From then on China called Venezuela a “strategic partner”; Venezuela responded by awarding the sought-after ‘market economy’ rank to China (Guo & Blanchard, 2010, 119). China’s Vice President Zeng Qinghong approved nineteen partnership agreements with Venezuela in 2005. Escorting Zeng were businesspeople and government officials. China is obviously pursuing continuing opportunities in Venezuelan oil fields (Ellner, 2010). Rafael Ramirez, the energy minister of Venezuela, responded in 2005 to pacify U.S. apprehensions about Chinese growing involvement in Venezuelan oil: “The United States should not be concerned. This expansion in no way means that we will be withdrawing from the North American market for political reasons” (Ellner, 2010, 82). But the PDVSA—the state-owned oil company in Venezuela—established a representative agency in China in 2005, and the Sinopec or China Petroleum and Chemical Corporation entered into two agreements with PDVSA for oil and crude (Locatelli, 2011). Importations of Venezuelan oil are continuously increasing. Venezuela has established an objective of trading 300,000 barrels of petroleum to China daily. Venezuela is also fortifying its oil transportation infrastructure for trade to Asian nations, specifically China (Zhu, 2013). These developments have heightened suspicions among several scholars that Venezuela and China could be collaborating to sever oil trades to the U.S., thus wreaking havoc to the U.S. economy already worried about continuously increasing oil costs (Barash, 2013). In addition, China is trying to enhance its capacity to process Venezuelan sour oil. China’s processing plants have started mixing sour with mildly sweet crude manufactured locally to create a feasible mixture. The country has also gradually enhanced its capacity to refine conventional sour oil. Capacity had dramatically increased by 2004 (Lafargue, 2006). Such moves indicate that Venezuela and China could be advancing toward stronger partnership on energy concerns. Nevertheless, the evidence for this assumption is never definite or unquestionable. Should the United States be alarmed about China’s Energy Security Relations with Venezuela? As regards energy concerns, there are intense predictions that after China gained full access to the market of Latin America, it will contest the current investment flows and oil trade systems governed by American corporations. In fact, a fierce debate about partnership between China and Latin America has developed among academics and legislators all over the Western region. The arguments may be grouped into three major perspectives (Amineh & Yang, 2012, 214): (1) Some scholars claim that China is a potential geopolitical threat to U.S. energy security, an analysis made according to the logic of zero-game theory. That is to say, that the more crude oil China buys from Latin America, the less the US will import; (2) comparing China’s rise with that of Western colonial empires in history, other scholars refer to Chinese activities both in Latin America and Africa as a new colonialism: a ‘scramble’ for oil and other strategic resources; (3) several scholars hold a different viewpoint from the above and argue that China has very limited participation in the Latin American energy sector and its influence should not be exaggerated. Venezuela has a special standing among China’s allies in Latin America. Sino-Venezuelan relations suddenly grew rapidly since the Hugo Chavez rose to power in 1999. Pressured to protect national energy security, Chinese leaders began pursuing Venezuelan oil recently. Consequently, this has become the chief motive pushing bilateral relations with the Chavez government (Jilberto & Hogenboom, 2007). Contrary to other countries in Latin America, the partnership between China and Venezuela can be viewed as a somewhat developed framework. The Sino-Venezuelan framework emerged during a volatile political stage, when the relationship of Chavez with the U.S. had severely worsened.  Continuously growing Sino-Venezuelan relations brought about heavy apprehensions in the U.S., especially among those legislators and scholars that embraced Cold War philosophy about China’s entry into Latin America and evaluated China’s impact on the wellbeing of the United States from economic, security, political, and ideological points of view. Without a doubt, Venezuela is of massive value for the energy security of the U.S. (Kay, 2012). As reported by the U.S. Energy Information Administration (EIA), Venezuela is the world’s 8th biggest exporter of oil and the biggest in the Western hemisphere. The Venezuelan government is very much willing to build strong ties with China so that he can neutralize U.S. control. On the contrary, China has adopted a practical strategy, pursuing non-ideological, commercial relations. Even though China’s policy toward Venezuela is pragmatic, some remain convinced the China’s strategy is extremely opportunistic (Eberling, 2011). This belief disregards the fact that rising power blocs, like China, are in serious need of stable access to major raw materials, awarding marginal nations with rich natural resources a stronger position in the international stage by fuelling their resource autonomy. In fact, the relationship between China and Venezuela cannot be fully appreciated without considering the evolution of the global order, and the possible effect this has on international relations. Due to the potential political repercussions of the economic relationship between China and Venezuela, their partnership framework could become an important model at the regional arena for examining the fundamental setting of global political shift. Indeed, it is quite premature to assume whether China’s growth could result in major political transformations in the regional domain. Nevertheless, according to Cheung and de Haan (2012), it looks obvious that the sped up tempo of Sino-Venezuelan relations is likely to reduce Venezuela’s reliance on the United States. In a politically based analysis of China’s policy toward the Western hemisphere is to be sidestepped, a thorough examination from both economic and political points of view is needed so as to analyze the underlying forces of China’s interests in Venezuelan energy sector. Primarily, the main objective of the Chinese government is to make the most of energy security by boosting its sources of oil import in Latin America; the objective of the oil corporations is to take full advantage of their profitability by widening their commercial operations (Hellinger, 2012). The major energy concerns of China in Latin America are investment and crude oil importation, and these can be achieved through the presence of Chinese oil corporations overseas. Moreover, the goals of corporations and governments do not constantly meet, as is proven by some energy cooperation attempts. Finally, rational players, like oil corporations, governments, and others engaged in the Sino-Venezuelan relations framework interrelate by taking on diverse policy approaches (Erikson, 2006). The most complicated feature of such is the economic and political ties between national oil corporations and governments. Hu Jintao, possibly wary of the increasing sensitivity of the United States to China’s advances in the Western hemisphere, decided not to make a trip to Venezuela during his Latin American visit in 2004 (Kong, 2009). However, Venezuela is still a key element in China’s strategy to strengthen its political and economic ties with Latin America. Venezuela views China as an important market for its products, not only for its gas or oil but also for coffee, aluminum, and steel. China has showed eagerness to fund infrastructure improvement to aid exports. In 2004, Chavez visited China for the third time, agreeing to oil and gas settlements that permitted Chinese corporations to invest in Venezuelan oil fields (Luft & Korin, 2009). Consequently, Venezuela attempted to obtain China’s locating system to enhance security at its border. This form of security partnership is certain to persist. How China’s Charm Offensive Works? The present-day ‘charm offensive’ of China is aimed at gaining allies overseas to attain a number of definite goals. Its main goal, after defending its land from outside invasion, is to cut off Taiwan and sooner or later attain the country’s political reunification with China. China depends on various diplomatic and economic attempts to cut off Taiwan (Kurlantzick, 2007). In Latin America and Africa, China offers the opportunities of foreign assistance, investment, and huge domestic market. Outside Taiwan, China’s foreign policy goals include a large-scale diplomatic and economic attempt to gain long-term access to natural resources such as oil for its growing economy. This ranges from establishing longstanding agreements with resource providers to openly investing in and acquiring these providers (Lai & Lu, 2012). The diplomatic aspect includes making friends with resource-abundant countries that the U.S. and other developed nations treat as outsiders. With its ‘non-interference’ strategy toward the national issues of other countries, China opposes attempts by the U.S. and other nations to cut off countries like Zimbabwe, Iran, and Sudan. Moreover, China builds alliances with countries like Venezuela that presently have unfavorable relationship with the U.S.; however, China is cautious not to look like it is trying to redirect the flow of oil from the U.S. market (Kurlantzick, 2007). Relationship with developing nations, as the modest strategy of China toward Venezuela shows, do not undermine the pressing needs of China to prevent military conflict and maintain access to the U.S. market. Another goal of the charm offensive is to slowly replace Japan and the U.S. as dominant powers around the borders of China. Joshua Kurlantzick (2006) openly emphasizes the significance of the Shanghai Cooperation Organization, by which China has considerably reinforced its relationship with the Central Asian nations that previously belonged to the Soviet Union. Nevertheless, his analysis of the influence of China in Burma could be an even more accurate case of the success of China in raising itself as the leading actor in its region. However, the reaction to China’s charm offensive goes beyond the Southeast Asian region (Kurlantzick, 2007). Today, the rise of China as a global force is being challenged by several developed nations, like the U.S. and Japan. Researchers found out that American and African peoples currently have more favorable outlooks about China than the United States. A 2005 survey of a British Broadcasting Corporation in 22 countries across the globe discovered that almost all thought that China serves a more favorable part in the world than the U.S. (Li, 2009). Moreover, China has successfully used its charm offensive to achieve its objectives. Countries like Venezuela have shown much interest in partnering with China. In essence, China’s charm offensive is designed to make the country the friend of all nations; Beijing would address the demands and needs of other countries, allegedly without expecting or seeking anything in return; China would abstain from intruding or meddling. Foreign countries could take advantage because China would refrain from making demands or pressuring other country’s political environment, governance, economic policies, and sovereignty. Moreover, China would not endanger, intimidate, or reprimand anybody—it would convince other nations that it harbors no hostile intentions. As proclaimed by Beijing, “To achieve peaceful development is a sincere hope and unremitting pursuit of the Chinese people” (Kurlantzick, 2007, 44). Also, Wen Jiabao announced in 2003 that China will “opt for dialogue in resolving disputes, step up cooperation in maintaining security, and bring about lasting peace and stability in Asia” (Kurlantzick, 2007, 44). This non-interference policy of China, which would aid in building a chain of partners such as Venezuela and Iran, overlaps with a period when the interventionist philosophy has become more important in the American foreign policy sector. As a result, U.S. foreign policy experts increasingly have challenged the balance the U.S. should build between valuing countries’ autonomy—an established realist standpoint—and demanding democratization or humanitarian intervention. On the contrary, Wen Jiabao proclaimed, “We believe that people in different regions in countries… have their right and ability to handle their own issues” (Lugg & Hong, 2010, 163). China’s policy also involves concentrating on developing countries whose bilateral ties with other world powers are crumbling. Usually, these nations are either totalitarian or countries whose leaders manifest several authoritarian qualities, and hence could approve China’s power; several also possess abundant energy reserves, although energy is not the sole motive of China in supporting these countries. China has vigorously sought the Venezuelan government as it intensified its resistance against the United States, elevating trade relations, and backing up Venezuela’s claim for a position at the UN Security Council (Stokes & Raphael, 2010). Although Chinese policymakers attempted to soften the anti-US sentiment of the Venezuelan President, Chavez referred to China’s strategy a ‘Great Wall’ against the global dominance of the United States and flaunted the Sino-Venezuelan relations as a ‘strategic’ partnership, while declaring that China and Venezuela were unified in resisting the United States (Kurlantzick, 2007, 53). However, some would evaluate the oil diplomacy of China and its pursuit of foreign energy resources as an unfavorable element to its ties with different nations. While China is fortifying its relations with oil-rich and exporting nations, embodying a huge rival for other countries that depend on oil importations, China is expected to weaken their energy security and break their policies toward oil-rich nations, like Venezuela (Mahnken & Maiolo, 2008). Nevertheless, it appears that China is implementing either a cautious energy diplomacy policy of dealing with the United States and would choose to prevent conflict. In particular, this is because the domestic energy use of China is still dependent mainly on its need for coal. Recently, China displayed efforts to lessen the consumption of coal and raise the use of oil and gas (Chan, 2012). As China has been progressing quickly over the recent years, oil has become a vital part of its economy; however, its energy security policy toward oil-rich countries, specifically Venezuela, should not be interpreted as intimidating or hostile. The United States and China concentrate on different energy sources. Primary energy sources of the U.S. are Mexico and Canada as they are nearby and constitute lesser costs and risks. As China is focused on its energy security and looks for means to expand its sources, China gets its oil supplies from Middle Eastern and Persian Gulf countries, among others (Cole, 2003). China knows about the issues in these geopolitical regions, and the intense oil competition with other oil-importing nations, such as Middle Eastern countries. This explains China’s effort to expand its energy sources trying not to be too much dependent on oil supplies from these regions. Hence, China pursues bilateral relations with various countries like Venezuela. And thus, China is not actually damaging the capacity of the U.S. to obtain oil from that area, and it is not disrupting the United States in Venezuela as it involves oil trade (Eisenman, Heginbotham, & Mitchell, 2007). In other words, as made known by the energy security policy of China and the U.S. toward other countries, the two world powers have different priorities and sources. Is the Sino-Venezuelan Relationship Really Harmless? Although Sino-Venezuelan relations are apparently getting stronger, there are very few evidences that Venezuela and China are truly collaborating to sever oil flows to the United States. Evidences about the potential threat of China are misleading. For instance, the oil imported by China in 2005 was only a small portion of its overall crude imports (Erikson, 2006, 86). Moreover, the growth in the refining capacity of China is not that threatening. The decision to mix sour with sweet crude will in no way lead to considerably higher capacity to process Venezuelan oil for only the coastal processing plants of China can refine sours with a sulfuric content of more than three percent (Lafargue, 2006). Hence, any mixing will essentially have a small quantity of sour. The newly built refineries will not be of much help as well. The earlier agreements of China with the Middle East impede any major processing operations for Venezuelan sour oil to put the U.S. market out of place. Also doubtful is Venezuela’s effort to improve its shipping fleet to enhance trade to Asian countries. Geographic factors are the main hindrance to this goal. The three major shipping choices of Venezuela—transporting oil through Americas’ southern tip, Cape Horn; constructing a pipeline from Colombia to the Pacific Ocean; and transporting via the Panama Canal—are all very costly and unmanageable (Erikson, 2006, 86). With regard to dense crude oil, disadvantageous weight-to-value ratio implies that greater shipping costs do not support lengthy transport. Oil is a non-replaceable good in the global oil market, and Chinese industrialists are deeply concentrated on the result (Sabatini, 2013). If Venezuela totally wanted to sidestep the U.S. and transport its oil directly to China, Venezuela needs to shoulder the massive shipping costs. The temporary trade interruption may indicate that the Venezuelan government would have to shoulder an outrageous political cost as an outcome of the economic conflict. One more hindrance to any attempt of China and Venezuela to exploit oil as an instrument against the United States is the Venezuelan government’s mishandling of the oil sector and its inability to spend sufficiently in infrastructure. Venezuelan energy minister declared in 2006 goals to increase oil trade with China, but many experts do not believe that this growth rate is maintainable (Locatelli, 2011). Without a doubt, both the increasing energy requirements of China and the petroleum management of Venezuela have major repercussions for the energy security of the United States. However, the impact is more likely to be situated in the longstanding demand and supply for oil on the international economy, not in an unexpected blow to the energy security of the United States arising from an oil suspension by collaborating countries. For instance, oil consumers in the U.S. would have a chance to deal with any major change in the trading system and could buy oil from suppliers who had been dislocated by the Sino-Venezuelan arrangement. Furthermore, even though Venezuela and China tried to shock the oil markets of the U.S., which is a very theoretical situation, the perilous nature of the international oil trade would immediately smother any attempt to build a supportable oil conspiracy to cut off the U.S. (Kong, 2009). Leaving behind the fanciful ambitions of Hugo Chavez to wreak havoc to the United States thru his oil resources, under existing circumstances any interruption of oil trade with the U.S. would shatter the Venezuelan economy and possibly endanger Chavez’s administration (Sabatini, 2013). China, on the other hand, is very cautious about American assumptions that it embodies an evolving threat. China made serious attempts to prevent political conflicts with the Western hemisphere, rather concentrating on entirely economic goals (Currier & Dorraj, 2011). Ultimately, China is looking for long-term energy providers, and a small number of influential Chinese policymakers seem eager to depend much on an alliance with the unpredictable and possibly impulsive Venezuelan government. This kind of unpredictable attitude is not in any way encouraging for Chinese investors, particularly when there are other possible sources of oil, such as the Middle East. Should China’s Charm Offensive Appease the World Powers? The current Sino-Venezuelan relations may not be a reason for apprehensions, but this barely suggests that U.S. officials should be unworried. In fact, China could sooner or later try to build itself as a world power and a traditional regional competitor to the U.S. Although this has not happened yet, China is certain to keep on working toward its goal of securing the essential resources to fuel its economic development and provide for its huge and ever more impatient population (Hiro, 2008). Rivalry for Latin America’s oil reserves will certainly heighten at a period when numerous countries are pursuing stronger control over their energy resources. Venezuela has pursued and acquired major influence in leading oil projects owned by foreign corporations and the Bolivian administration has made an effort to nationalize its energy industry (Cirincione, 2007). The continuing prospect for American energy security will be enhanced if they can create an effective counter to the new realities formed by China’s rising influence and Venezuela’s growing nationalism. On the other hand, in competing for energy reserves, the United States and China as the leading power blocs aim to exercise their power on the geopolitical areas of the globe. For U.S. and China, Latin America is becoming another geopolitical area. The relationship of China with Latin American nations, especially Venezuela, has mostly focused on their economic ties as regards investments and trade (Andrews-Speed, 2004). In this way, China may be weakening U.S. prospect to invest in and trade with the region. Since the foreign military affairs of China would impact the United States, it could be viewed as an imminent risk to the national security of the United States. Even though China’s exercise of power and influence can mostly be regarded as ‘soft power’, China is still expanding security partnership with its foreign allies (Eberling, 2011). China argues that its military presence in these nations is a normal outcome of the need to safeguard its security from possible enemies. Conclusions At this point, even with China’s charm offensive policy, it is very difficult to determine whether or not the other world powers should be wary about China’s growth as an economic, political, and military power. 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