What 50 cents can tell you about the State of the World
I filled up my pick up with gas two days ago. It cost me $1.74 a gallon. That would be unremarkable except it would have cost me about $.50 less three years ago. While the effects of necessary, US military action in the Middle East may have been a contributing factor, there is a novel danger halfway around the world that is also causing a these annoyingly high gas prices. But the deeper causes should inspire more than just annoyance.

China is Growing Quickly
According to a recent story in the Wall Street Journal by Mark Helprin, the economy of China has been growing at an astounding rate of just under 10%/year since 1980. This amazing growth requires energy. Says Helprin,

“Major crude oil importation, begun only recently, is already one-quarter the volume of U.S. crude imports, leading China to compete for petroleum not only in the Middle East but in South America and at least six countries in Africa.”

Already, China consumes 25% as much as the US. And it’s going to continue to grow. Says Bill Gertz, quoting a recently disclosed report from the Department of Defense:

“Energy demand, particularly for oil, will increase sharply in the next 20 years — from 75 million barrels per day last year to 120 million barrels in 2025 — with Asia consuming 80 percent of the added 45 million barrels.”

This growth in energy demand, says Helprin, “has already begun what it itself might at one time have called imperial expansion, driven not by ideology but the need for markets and raw materials.” Could he be suggesting that within our lifetimes, the US will have to fight an old fashioned war of territorial conquest?

China's Neighborhood Antagonisms
A November 26, 2004 story on Stratfor.com (subscription required) claims that the Chinese placed an oil-drilling platform in the Paracel Islands in the South China Sea on November 19, 2004. The island group contains fertile fishing grounds and potentially large oil reserves. Not surprisingly, it is claimed by Vietnam, China and Taiwan. According to Stratfor, China and Vietnam have skirmished over the Paracels and the nearby Spratly Islands in recent years, with both sides ponying up for expensive and complex Russian military hardware to stake their claim to these tiny islands. It seems that $50/barrel oil and rapidly growing demand (China’s oil consumption in 2004 was 7 times what it was in 2001!) are driving regional powers to desperate ends.

The desperation is especially acute for China. Says Gertz:

“Beijing's leaders see access to oil and gas resources as vital to economic growth and fear that stalled economic growth could cause instability and ultimately the collapse of their nation of 1.3 billion people.”

The stakes are high for Beijing. And they feel vulnerable. Again, according to Gertz:

“Eighty percent of China's oil currently passes through the Strait of Malacca [near Burma], and the report states that China believes the sea area is ‘controlled by the U.S. Navy.’ Chinese President Hu Jintao recently stated that China faces a "Malacca Dilemma" — the vulnerability of its oil supply lines from the Middle East and Africa to disruption.”

Furthermore, China’s longstanding anxiety over Taiwan adds another twist to China’s territorial ambitions. Beijing regards Taiwan as a breakaway province. As the International Herald Tribune recently pointed out, China is preparing a special remedy for those perennial, anxiety-producing Taiwanese: expanding the number of submarines in their navy, the kind of weapon that is particularly effective for blockades.

The Chinese Communists are in deep fear of economic problems. They perceive their energy supply is vulnerable. The US Navy is unhappily positioned as a potential gatekeeper. Taiwan continues in stubborn defiance. Therefore, it is reasonable to expect that the Chinese military is going to pursue a more aggressive strategy of modernization, re-armament, and regional power projection. And in the Asia Pacific region, that means a strong navy.

China's Military Modernization
Captain Brad Kaplan, the U.S. Naval Attaché to China, recently posted an amazingly detailed assessment of Chinese naval capabilities that is a must read for anyone interested in Asia-Pacific political, economic, or military affairs. The gist of this article is that “the PLAN’s (People’s Liberation Army Navy) maritime mission has evolved from a role of static coastal defense to one of "active offshore defense."

Capt. Kaplan says that China’s method to increase its “active offshore defense” is to

• Decommission many of its outdated surface ships, submarines and aircraft
• Improve officer and enlisted training
• Aggressively seek advanced Western technology to improve its war fighting capabilities

That last bullet should give us a special caution. Says Capt. Kaplan, “it is quite possible that the PLAN will, within two decades, develop a Navy with regional capabilities second only to Japan's.” Over this same twenty years, China’s oil consumption will increase by up to 80%! Beijing’s anxieties will only increase, as greater economic growth will bring a greater expectation of prosperity and security by 1.3 billion people. Thus, their likelihood of seeking new weapons for regional aggressiveness grows as well. The Chinese Communists cannot be expected to let energy availability, a key building block of their power, be left to the good will of their neighbors.

So here is our dilemma, according to Helprin:

“This century will be not just the century of terrorism: terrorism will fade. It will be a naval century, with the Pacific its center, and challenges in the remotest places of the world offered not by dervishes and crazy-men but by a great power that is at last and at least America's equal.”

Do you see how high gas prices are more than family budget quandary? The prices are being driven my increased demand by a large country ruled by questionable characters, with designs for military modernization and conquest where the US has a large presence.

The War on Terror will be won. The War for the South Pacific may be next for us and our children.

Our Response
So what should we do in the face of this disquieting state of affairs? Perhaps we should consider Captain Kaplan’s counsel:

“The degree to which these developments constitute "storm clouds on the horizon" will depend as much on U.S. diplomacy in the coming years as on the ability of the United States and its Pacific allies to maintain a strong regional-defense posture.”

Those of us in the American hinterland are not powerless in the face of this growing threat. We can get informed and insist that our elected leaders take future national security challenges seriously and fund the military to meet those challenges. The US Navy should garner special attention. For the US to help maintain the peace, we must have a well-equipped navy to maintain a “strong regional-defense posture” to help deter unpleasant foreign escapades. In other words, these moves are required now, before China builds up its military to the point where it can take more aggressive action. If we tarry, our penalty will be much more severe.

This may mean decreased involvement in other areas of the world. This may mean dramatic cut backs in entitlement and social services spending. This may mean a radical overhaul of the economically backward Medicare prescription drug plan. This may mean the American people will have to do without many goodies from the federal cookie jar.

But without these sacrifices now, the costs may be a whole lot more than an extra $.50 a gallon at the pump.