NCPA - National Center for Policy Analysis

U.S. Energy Performance could lead to Position of Power

February 26, 2015

With China's economy in decline, the United States is poised to reassert influence in Asia, thanks to its energy boom.  With the influx of increased energy production, the United States could bolster its Asia policy, therefore reassuring its allies they have bounced back from past economic troubles.

China has an abundance of natural resources but lacks the structure to see meaningful energy gains. The State owns the land holding gas and oil and as a result, competition and innovation are barred. Despite this, China remains confident in its ability to stand alone as a geopolitical force.

In order for the United States to affirm its position of influence following economic gains from its thriving energy production, it could:

  • Highlight the fact that U.S. wealth is three times larger than China's;
  • Emphasize its abundance of natural resources, competitive industrial structure and well-defined property rights within a free market;
  • Increase its defense budget to support Asian allies strengthening their own defense against the Chinese;
  • And synchronize energy policy and national security policy to bring energy exports to allies such as Japan, South Korea and Taiwan.

While the United States is becoming more energy independent, China is moving in the opposite direction, yet they could reverse their recent decline by reforming property rights and implementing a privatized financial system. However, because China is unlikely to enact significant reforms, they will continue lagging behind the United States in terms of its policy influence in Asia.

United States lawmakers could leverage its energy performance to improve its relationship with China. By not doing so, China could form alliances with Russia or Iraq to compensate for its weakening international standing. This would pose new problems for the United States and their allies.

Source: Dan Blumenthal and Derek M. Scissors, "More energy, more power: A new opportunity to pivot in Asia," American Enterprise Institute, February 24, 2015.  

 

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