Ground Report

Don’t look now, but the geopolitical structure of Asia is about to get very interesting.

 

As is often the case, it all comes down to crude oil. The South China Sea appears to have a decent amount of it — probably no game-changers, but more than enough to add to the wealth of companies and nations.

 

And, perhaps, enough to be strategically important.

 

At least, it appears China thinks so. China has unilaterally declared all of the South China Sea its property, and has sold lots for development that are up to three times as far from the Chinese coast as, say, Vietnam’s.

 

Both Vietnam and the Philippines dispute those claims, and have been selling lots of their own — in some cases, identical to the ones China has sold.

 

There’s no doubt that China has the stronger military — and it’s been using military boats to harass surveyors and others operating in cooperation with other countries.

 

There is also little doubt that China doesn’t have a legal leg to stand on — and the other nations are taking the matter before the UN next year. In all, Vietnam, the Philippines, Taiwan, Malaysia, Brunei and Indonesia have overlapping claims on waters in the South China Sea — and all that lays below the surface.

 

China has long been acting to secure as much additional oil as it can. Not only has it worked out numerous agreements with Arab nations… and African nations… and South American nations… it has sometimes traded favors for oil rights (like its blind eye turned toward Sudan).

 

What’s more, China’s crude oil reserves have shrunk nearly 40% just since 2001. With its appetite only growing stronger, China is in a dangerous position.

 

That’s why the South China Sea may wind up being a very contentious place, very soon.

 

Suppose the UN finds in favor of the smaller nations surrounding the South China Sea. Will China back down? Will it continue to use its military to bully the others?

 

And if it does — what will America do? Recently, Secretary of State Clinton spoke out on sovereign rights and maritime rights while in Vietnam, emboldening the smaller nations to begin asserting their claims.

 

Will America, long the naval power in the Pacific, push back against Chinese aggression? Not only principle, but crude oil is at stake.

 

We’re still many steps away from military skirmishes — though there has already been plenty of saber-rattling. Not only from China — the Philippines has flown military aircraft to scare off Chinese naval vessels.

 

Still, nothing beyond posturing has yet occurred. And it’s likely that nothing more will occur — that China and its neighbors will sit down at the negotiating table, and come up with some split of revenue and resources that all will find suitable.

 

But that’s no guarantee. And, as the finite amount of oil in the world continues to be slurped up, it’s only a matter of time before one of these disagreements blows up into something much larger.

 

Let’s just hope it doesn’t occur in the South China Sea, next year.

Now, the South China Sea isn’t the only location China has targeted for its crude oil. Workers are going around the clock to put the finishing touches on a massive — and secret — source of emergency oil that’s thousands of miles from Beijing.