H-Diplo Article Review 941 on Minami. “Oil for the Lamps of America? Sino-American Oil Diplomacy, 1973-1979.”

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H-Diplo Article Review 941

3 April 2020

Kazushi Minami.  “Oil for the Lamps of America?  Sino-American Oil Diplomacy, 1973-1979.”  Diplomatic History 41:5 (November 2017):  959-984.

https://hdiplo.org/to/AR941
Editors: Diane Labrosse | Commissioning Editor: Thomas Maddux | Production Editor: George Fujii

Review by Chris Tudda, Office of the Historian, Department of State.[1]

While I was reading Kazushi Minami’s important and timely article on American oil diplomacy in the 1970s (full disclosure, Kazushi was a brilliant student of mine when he was an undergraduate at The George Washington University), I could not help but be reminded of Paul Varg’s seminal 1968 article “The Myth of the China Market, 1890-1914.”[2] This article, which I first read as an undergraduate student, is an important analysis of the gulf between American economic expansionist rhetoric vis-a-vis China and the results of American business and government efforts to exploit that market. It has also influenced much of my thinking, not only about Sino-U.S. relations, but about the relationship between how American business and policymakers discussed foreign trade and subsequently tried to make that discussion a reality. Minami shows, as Varg did, how the Nixon, Ford, and Carter administrations’ attempts to tap a new oil supply floundered when they were confronted with the reality that the People’s Republic of China’s (PRC) had far less reserves than initially believed. The twin desperation to wean the United States from its dependence on Organization of Petroleum Exporting Countries (OPEC) oil supplies during the first Energy Crisis of the 1970s and the ongoing rapprochement process between the U.S. and the PRC seemed to have created diplomatic serendipity, but this happy coincidence, like Varg’s mythical China market, proved illusory. At the same time, however, Minami reveals that the two former adversaries recognized that each could benefit from sales of oil exploration equipment, which served the economic and strategic policy interests of both nations.

As Minami notes, the increasingly voluminous historiography of Sino-U.S. relations has focused on the general rapprochement process that occurred during the 1970s rather than on the economic relationship the two countries attempted to develop during that time period.[3] Meanwhile, close analysis of the significance of oil in either Sino-U.S. relations or broader U.S. Cold War strategy is only a recent phenomenon.[4] In “Oil for Lamps,” Minami neatly synthesizes both, uses U.S. and Chinese archives to provide a bilateral perspective on the diplomacy of oil, and contends, quite convincingly, that despite the devastation that the OPEC oil embargo and subsequent energy crisis caused the United States, it also offered an opportunity for Washington and Beijing to use oil “as a symbol of their strategic partnership against the expansion of Soviet influence in the resource-rich developing world” (961-962).

Business interests in the United States were “fascinated” by the potential of the Chinese oil market (961). Despite any demonstrable evidence about Chinese oil riches, one American businessman nevertheless stated “I think China is another Middle East, but it’s going to take awhile” (963). American politicians such as Ronald Reagan publicly extolled the PRC’s oil market during his 1976 presidential run. Others in the private sector who favored Sino-U.S. rapprochement and, ultimately, normalization, also hyped China as a new oil market that could ameliorate the worldwide petroleum supply crisis. The Ford administration, however, privately expressed skepticism about the China oil market. Although it expected American businesses to profit from sales of petroleum equipment to China––while the private sector established the Petroleum Equipment Committee within its National Council on U.S.-China Trade (NCUSCT)––the documents Minami found in the Ford Library tell a different story. The President’s national security team instead wanted to use China’s potential oil market as ‘leverage’ against other traditional oil exporters while it tried to convince OPEC members to increase oil production. OPEC had refused to increase its production after the 1973 War because its profits had skyrocketed. The Ford administration and private business interests figured that China’s willingness to sell its allegedly vast oil reserves to the West would create a powerful alternative to the cartel.

This desire was tempered, however, by the realities of Chinese oil (and economic) policy. Minami’s research in the available Chinese records reveals that Beijing, not surprisingly, viewed its oil industry “as a symbol of China’s new economic prowess” (967). This reflected Mao’s ‘Three Worlds Theory’––his attempt to steer a path between the United States and the Soviet Union, which he expected would preserve China’s independence to that of the Third World. So while it did not mind buying Western oil technology, Beijing balked at joint exploration, which it associated with the exploitation China had experienced for over a century before the Communist victory in 1949. When Hua Guofeng became leader of China in 1976, however, he adopted the “Western-led Leap Forward,” which Minami describes as a “determination for rapid industrialization and modernization with foreign inputs” (971).

Reflecting Hua’s change in policy, by 1978 China had purchased tens of millions of dollars of American petroleum equipment. Deng Xiaoping, who replaced Hua in December 1978, accelerated this policy.  These purchases coincided with President Jimmy Carter’s secret negotiations with the PRC, which resulted in his decision to formally recognize the PRC on January 1, 1979. Minami notes, correctly, that this decision resulted from the advice of Carter’s National Security Advisor Zbigniew Brzezinski, his Secretary of Defense, Harold Brown, and his Secretary of Energy, James Schlesinger (a Republican) that the U.S. take into account the strategic dimensions of Chinese recognition. One such area was oil, and Minami demonstrates that Beijing and Washington each agreed that they must minimize, if not eliminate, Moscow’s “threat to oil supplies to Western Europe, Japan, and the United States” (974).

Minami does a fine job of explaining the nexus between U.S. and Chinese oil policy. The only drawback of what is otherwise is an excellent piece is his reliance on U.S. documents. This, of course, remains a reality for those of us who have written about Sino-U.S. relations in the 1970s: Chinese records remain, for the most part, closed to Western researchers for this time period. He did examine the documents that are available from China, as well as articles from People’s Daily and other official publications that reflect the turn toward the West. He also skillfully uses documents from the Ford and Carter Libraries to reflect the bipartisan determination to take advantage of new trade opportunities with the PRC. The collections in the Ford Library are especially important, in particular those of the NCUSCT, and reflect the close cooperation between the U.S. government and business leaders.

In the end, although the ‘myth’ of the China market extended into the late 1970s, through his deft analysis of Sino-U.S. oil policy, Kazushi Minami shows how economic and strategic interests mutually propelled and complemented Sino-U.S. rapprochement and normalization. Only after Deng Xiaoping succeeded in reorienting China’s economy in the 1980s did that myth finally become a reality in the subsequent decades.

 

Chris Tudda is a Historian in the Declassification and Publishing Division in the Office of the Historian, Department of State, where he declassifies and compiles manuscripts for the Foreign Relations of the United States series.  He earned a B.A. from the University of Vermont in 1987 and a Ph.D. from American University in 2002. His latest book, Cold War Summits: A History, from Potsdam to Malta, was published in 2015 by Bloomsbury Academic.

 

Notes

[1] The views presented here are my own and do not necessarily reflect those of the U.S. Department of State or the United States Government.

[2] Paul A. Varg, “The Myth of the China Market, 1890-1914,” The American Historical Review 73:3 (February 1968): 742-758.

[3] See, for example, Margaret MacMillan, Nixon and Mao: The Week that Changed the World (New York: Random House, 2007); Evelyn Goh, Constructing the U.S. Rapprochement with China, 1961-1974: From “Red Menace” to “Tacit Ally (New York: Cambridge University Press, 2005); the essays in William Kirby, Robert S. Ross, and Gong Li, eds., Normalization of U.S.-China Relations: An International History (Cambridge: Harvard University Asia Center/Harvard University Press, 2005); the essays in Robert S. Ross and Jiang Changbin, eds., Re-examining the Cold War: U.S.-China Diplomacy, 1954-1973 (Cambridge: Harvard University Press, 2001); and Yafeng Xia, Negotiating with the Enemy: U.S.-China Talks during the Cold War, 1949-1972 (Bloomington: Indiana University Press, 2006), and Chris Tudda, A Cold War Turning Point: Nixon and China, 1969-1972 (Baton Rouge: Louisiana University Press, 2012).

[4] See, for example, David Painter, “Oil and the American Century,” Journal of American History 99.1 (2012), and Robert Lifset, ed., American Energy Policy in the 1970s (Norman: University of Oklahoma Press, 2014).