U.S. warns China on energy ties to Iran

Reuters:

China will be increasingly in conflict with the United States if it continues to pursue energy deals with countries like Iran and is unlikely to gain the energy security it seeks, a senior U.S. official said on Tuesday.

Deputy Secretary of State Robert Zoellick said he was not sure how much of Beijing's energy drive was propelled by new Chinese oil companies or by a government "strategic plan."

But he told a group of reporters it was unlikely that Beijing could guarantee its own energy security through contracts with countries which Washington and other states consider troublesome "because you can't lock up energy resources" in a global marketplace. READ MORE

Instead, the Bush administration was encouraging China to adopt a broader definition of energy that included cooperative efforts with Washington and others to develop energy sources beyond oil and gas, expanding sources of oil and gas and improving energy efficiency, he said.

Zoellick, in charge of what Washington calls a new U.S. strategic dialogue with Beijing, discussed key issues facing the two powers ahead of Chinese President Hu Jintao's attendance at the United Nations summit in New York next week.

Hu had been due to make his first official visit to the White House on Wednesday but it was canceled so President George W. Bush could focus on the Hurricane Katrina aftermath.

The two are still expected to meet on the fringes of the U.N. summit. Cooperation on trying to end the North Korean and Iranian nuclear programs will be on the U.S. agenda.

Zoellick launched the strategic dialogue on a trip to Beijing last month amid rising U.S. concern over China's growing economic and military clout. Washington aims to foster greater cooperation and avoid dangerous miscalculation by examining Sino-American relations in a larger framework.

Zoellick acknowledged "there are questions that are being asked not only in the U.S. but other parts of Asia and Europe about how China will use this growing power."

CHINA AS WORLD POWER

China became the world's third largest importer of oil in 2003. It sought energy and mineral deals with Iran, whom the United States and Europe accuse of pursuing nuclear weapons, with Sudan, accused of genocide in the Darfur region, and Venezuela, where the president has allied with Cuba, a U.S. adversary.

Zoellick said he told Chinese officials that from a U.S. perspective "it looked like Chinese companies had been unleashed to try to lock up energy resources."

This is an elusive goal because even when governments think they "own" the resources of another country, that country could nationalize the assets, he said.

He said Beijing's ties to what the United States considered troublesome states -- the list also included Burma and Zimbabwe -- were "going to have repercussions elsewhere" and the Chinese would have to decide if they wanted to pay the price.

China must choose whether to work with the United States to ameliorate problems posed by these states -- while still protecting Beijing's energy interests -- or whether it "want(ed) to be against us and perhaps others in the international system as well," Zoellick said.

The State Department's former chief China official, Randall Schriver, told Reuters last week he feared the two powers were on a "collision course" over the ties Beijing is forging in its search for energy to feed its growing economy.

Some U.S. experts worry Beijing is gobbling up energy assets to secure control over vital resources that would allow it eventually to supplant the United States as the world's dominant power. China this year made a bid for a U.S.-owned oil giant but withdrew after a torrent of criticism from the U.S. Congress.