This is a guest lecture by Sun Xia, a research associate at the Institute of International Relations at Shanghai Academy of Social Sciences, Shanghai, China, on energy crisis.
Over the last four decades, China’s economy has been growing by leaps and bounds. In the late 80s and 90s, China’s gross domestic product (GDP) annual growth rate had been in the double digits. Even though recently, China’s economy has started to cool down with its GDP annual growth rate hovering around six percent, China now has the second largest economy. Over the same period of time, China’s demand for foreign oil has been increasing from 30 percent in 2000 to approximately 57 percent in 2014, reached 69 percent by the end of 2016 and is expected to reach 80 percent by 2040.
The U.S., on the other hand, reached its height for demands of foreign oil around 2005, and it has been declining ever since. In the Middle East, oil-producing countries see their markets moving away from the west towards the east.
The world is in a rare situation where the second largest economy is quickly approaching and will eventually overtake the first largest economy. The question that has to be asked is can China and the United States sidestep the “Thucydides Trap” and the “Kindleberger Trap,” and jointly chart bilateral ties based on a long-term perspective through energy cooperation?