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Kenneth Lieberthal
  Kenneth Lieberthal

A "Sober" U.S. Policy on China is Needed to Strengthen Cooperation

7/5/2006 --

The United States and China both will benefit if they can develop a collaborative relationship on energy issues.

ANN ARBOR, Mich.—China's rapid emergence as a major force in both world energy markets and global energy geopolitics is creating new challenges for U.S.-China relations, says a Stephen M. Ross School of Business professor.

Thus far, the U.S. response to China's energy rise has been relatively ad-hoc, reactive and counterproductive, compounded by China's own lack of transparency and America's poor understanding of China on many levels says Kenneth Lieberthal, the William Davidson Professor of Business Administration at the Ross School and University of Michigan professor of political science.

Lieberthal and colleague Mikkal Herberg of the National Bureau of Asian Research say it is time to take a more constructive, cooperative approach to the global-energy situation. Writing in a recent issue of NBR Analysis, they contend that both the United States and China will benefit if the two countries can develop a collaborative relationship on energy issues—as opposed to the current trajectory characterized by growing mistrust, suspicion and competition. In their essay, they propose a "sober" U.S. policy that will enhance trust and strengthen multilateral, regional and bilateral cooperation on energy issues.

"In reality, the fundamental global energy interests of China and the United States largely converge," said Lieberthal, who also is director for China at the William Davidson Institute. "China's new energy security challenges mirror the United States' own long-standing energy security challenges.

"Both countries share an interest in avoiding global-supply disruption, maintaining stability in the Persian Gulf, accelerating the development of new oil and gas resources, expanding the use of clean-coal technologies, increasing global energy-supply diversification and other energy-related objectives."

Given these similarities, Lieberthal and Herberg argue that the United States and China would be well-advised to reduce their existing mistrust, which is exacerbated by broader strategic tensions, and to devise prudent, serious ways to begin working together to achieve mutual interests in energy. In fact, the two experts note, energy cooperation actually could contribute to building the trust required for potentially broader international cooperation between the two countries.

"Without a more sophisticated policy response in both Washington and Beijing, the risk is that energy issues are becoming not a source of constructive cooperation but rather a deepening source of competition, misperceptions and excuses for obstructing one anotherís interests," Lieberthal said.

Lieberthal and Herberg propose specific U.S.-policy initiatives to help achieve mutually beneficial U.S.-China energy-sector goals. First, they say, the United States should seek creative ways to integrate China into two influential multilateral organizations, the International Energy Agency (IEA) and the Group of Eight (G-8).

"By helping to give Beijing a seat at the table, the United States can increase the chances that China will become a stakeholder in the major efforts of these institutions to deal with energy-supply issues," Herberg said.

Second, they recommend that the United States take steps to promote the development of a Northeast Asia Security Community composed of the United States, Japan, the Republic of Korea, China and Russia. This Security Community would be designed to enhance trust, improve mutual understanding, increase cooperation and expand certain technical capabilities so as to reduce the likelihood of misunderstanding and conflict among its members. Over time, this group also could address regional energy issues.

Finally, they urge Washington to re-invigorate bilateral energy talks with Beijing and to pursue such goals as elevating energy-related dialog to the policy-making level and avoiding rhetoric or policies that needlessly aggravate China's sense of energy vulnerability. Other objectives of U.S.-China talks should be to discourage mercantilist competition for oil supplies in China and neighboring Asian countries and to encourage energy efficiency, the spread of energy-saving technologies and energy-market reform in China.

"In the view of either Beijing or Washington, none of these issues can easily or comfortably be resolved," Lieberthal said. "However, the problems and potential approaches warrant focused attention at the highest policy levels in order to move the trajectory in the vital energy sector in a more fruitful direction for both countries."

Written by Claudia Capos

For more information, contact:
Bernie DeGroat
Phone: (734) 936-1015 or 647-1847