The dispute between China and the US escalated this weekend, after China said the US probe into Chinese subsidies for alternative energy companies was little more than political posturing.
China’s top energy official, Zhang Guobao, said:
Does America want to get fair trade or a genuine dialogue, or get transparent information? I think not – it seems America’s main reason is to get votes.
Chinese subsidies to new energies companies are very small, but the United States subsidised new energy enterprises with $4.6bn in cash in the first nine months of 2010.
China is putting down roots in the backyard of Petrobras, newly-crowned share issue king of world stock markets, with the announcement of a $7.1bn oil alliance in Brazil between Sinopec and Repsol.
In the latest step in China’s global hunt for oil – and one of the more expensive – Sinopec, a state-owned oil and gas company, is to take a stake in the Spanish energy group’s Brazilian subsidiary in order to exploit its oil deposits in the country.
Sinopec will pay $7.1bn for 40 per cent of Repsol Brasil, with the remaining 60 per cent staying in the hands of Repsol, according to a statement from Madrid on Friday.
Dmitry Medvedev, the president of Russia, is in China this week for talks aimed at cementing a new partnership between the world’s biggest energy producer and consumer.
But China, despite its hunger for new oil and gas supplies, is playing hard to get.
“Russia is ready to meet China’s full demand for gas,” Igor Sechin, the powerful Russian deputy prime minister, told reporters in Beijing on Monday.
China is rich in coal-bed methane, a gas that can be used for fuel. But production has not proved easy. This year output of the gas will be less than a quarter of the official target.
Transport is a key obstacle. China’s pipeline network is dominated by oil giants CNPC and Sinopec, making it difficult for gas suppliers to get access. Now one company, Green Dragon Gas, has found a way to skirt the issue – by selling its coal-bed methane directly to customers.
China’s aggressive efforts to secure natural resources around the world have sometimes made it an opponent of other importing nations, most recently South Korea. But a shared hunger for commodities can bring countries closer to together too.
Take Tuesday’s deal between Mitsui, one of Japan’s biggest trading houses, and Shenhua, the Chinese state-owned energy and mining company. The two groups agreed to work together to develop coal deposits in Mongolia, and perhaps in other countries in the future.Most of the coal is likely to be sold to Chinese power plants, but some will also find its way to Japan, according to Mitsui. The Japanese group will take a share of the profits regardless, making its investment a partial bet on further growth in Chinese demand.