China Set To Go For Central Asia’s Resource Development Plans
Warren Buffet and China’s Chairman Xi Jinping share at least two common interests:
- They both want BYD to be the an electric vehicle (EV) champion
- They both want more oil and gas
A Reuters report published on Friday claimed that “China’s Xi unveils grand development plan for Central Asia”. This was in response to the China-Central Asia Summit held in Xian, Shaanxi Province of Northwest China from 18 May to 19 May 2023.
This so-called grand development plan is part of the Belt and Road Initiative (BRI) which seeks to open up new trade and transport opportunities from China to Europe through Central Asia.
An event that was followed closely by the international media, the heads-of-state (HOA) meeting between China’s Chairman Xi Jinping and Saudi Arabia’s Crown Prince Mohammed bin Salman (MBS) was held at the Chinese-Arab summit on 6 December 2022 in Riyadh, Saudi Arabia.
What this means for oil production on international markets has yet to be clarified, but it could mean that OPEC seeks to keep prices stable on energy markets as China recovers from its Covid-19 pandemic lockdowns, hurting the country’s GDP growth and industrial production in unprecendented ways since China’s rise in the global economy.
This moment signals a change in the thinking on Saudi Arabia’s control over oil production, and how they wish to court China as a major oil importers. Increasing military and defense ties would be a big step, though I don’t think that’s the overall concern here.
A bigger concern is how and to what extent China is going to roll out its Belt and Road Initiative (BRI), where the Middle East and North Africa (MENA) is poised to play a pivotal role in linking up supply chains and transport routes throughout the European, African and Asian continents.
This is relevant to global oil supplies in a number of ways. Let me just say that the countries with increased leverage over oil markets are more likely to use this advantage to achieve political ends. A successful roll out of the BRI in MENA would be benefical to OPEC oil supplies and exports. China would need ALOT MORE oil, and the supply chains would improve the prospects of getting more oil moved around North Africa, set to become one of the world’s next industrial and energy hubs.
Read the full story: The Long-Game of Oil & Coal Production Could Force the Momentum in Carbon Reduction Strategies.
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