China’s race into the oil market is in trouble

Will the deadly riots and clashes erupted in China affect the stability of the world’s most populous country and the second largest oil consumer?

The growing unrest in China’s northwest Xinjiang region that prompted President Hu Jintao to leave the G8 summit has brought into startling new focus a deep ethnic divide that the Chinese government is eager to keep in check.

Deadly riots that erupted last month between Muslim Uighurs and Han Chinese civilians and police in Urumqi, Xinjiang’s capital city, are said to have been sparked by an Uighur demonstration against the government’s handling of a prior clash between Uighur and Han factory workers.

But in spite of Beijing’s assertion that it has helped the vast, sparsely populated, oil-rich Xinjiang province prosper economically, the Uighurs have long protested many forms of  discrimination and repression under Han Chinese rule. For now, the Chinese government has regarded the Uighur population with deep mistrust, often portraying them as militant separatists who rely on terrorist tactics.

One common source of Uighur discontent is related to demographics. Though the 10 million Turkic-speaking Uighurs make up Xinjiang’s ethnic majority, the Han have always governed the region under the Chinese Communist Party. Many Uighurs believe that the Han, China’s dominant ethnic group, are trying to tighten their grip by altering the area’s population balance.

The majority of Uighurs is Sunni Muslims while the secular China is particularly suspicious of Islam. The Han government in Xinjiang “permanently monitors all Koranic schools in fear of insurrection.

Many Uighurs are also angry about the Han government’s phasing out of Uighur-language instruction in schools.
Beijing contests these grievances, pointing to the rapid economic growth and improved living conditions Xinjiang has seen under Han policies. However, Uighurs said they have been excluded from the region’s economic development. And it is known that most Uighurs are “limited to second-class jobs, thus creating a feeling of social frustration.”

On the other hand, China insists that other causes are to blame for the tensions boiling over. Authorities have accused Rebiya Kadeer, a Uighur businesswoman and president of the World Uighur Congress who now lives in the US, of orchestrating the protests that set off the violence.

The death toll from the recent violence in the region had risen to 197. Besides, about 1,000 people, mostly Uighurs, have been detained in the resulting government crackdown.
In recent years, China has been undergoing a process of industrialization and is one of the fastest growing economies in the world. With real gross domestic product growing at a rate of 8-10 percent a year, China’s need for energy is projected to increase by 150 percent by 2020. In order to sustain its growth China requires increasing amounts of oil. Its oil consumption grows by 7.5 percent per year, seven times faster than the U.S. China’s ability to provide for its own needs is limited by the fact that its proven oil reserves are small in relation to its consumption.
A report by the International Energy Agency predicted that by 2030, Chinese oil imports would equal imports by the U.S today.

But despite its efforts to diversify its sources, China has become increasingly dependent on Middle East oil. Today, 58 percent of China’s oil imports come from the region. By 2015, the share of Middle East oil will stand on 70 percent. Though historically China has had no long-standing strategic interests in the Middle East, its relationship with the region from where most of its oil comes is becoming increasingly important.  Hence, will the relation of China with the Middle East and Islamic countries play a role in changing China’s policy with the Muslim Uighurs? Or everything will remain the same and the chaos will deteriorate the conditions in the second largest oil consumer, behind the U.S.


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