Far Eastern Economic Review

China's Quest for Overseas Oil

In recent years it has been in vogue for some American policy makers and pundits to criticize the overseas expansion of China’s national oil companies (NOCS) as mercantilist. Even the Bush administration has joined the chorus, taking the Chinese government to task for attempting to “follow a mercantilism borrowed from a discredited era” through its efforts to “somehow ‘lock up’ energy supplies around the world.”

This rhetoric conjures up an image of a zero-sum competition for oil among the world’s major powers—ranging from a New Great Game in Central Asia to a New Scramble for Africa—in which one country’s gain is another’s loss. But it mischaracterizes the Chinese NOCS' global search for oil and their impact on the world oil market, exaggerates the differences between Chinese and American oil policies and runs the risk of heightening Sino- American tensions over oil.