Let’s Make a Deal: US Natural Gas May Be on Chinese Regime’s Shopping List

Annie Wu
By Annie Wu
November 9, 2017USshare
Let’s Make a Deal: US Natural Gas May Be on Chinese Regime’s Shopping List
US President Donald Trump (L) sits with Chinese President Xi Jinping (R) during a bilateral meeting at the Mar-a-Lago estate in West Palm Beach, Florida, on April 6, 2017. (JIM WATSON/AFP/Getty Images)

Trade is top of the agenda during U.S. President Donald Trump’s visit to China.

Trump wants to tackle the enormous trade deficit with China—totaling $347 billion last year, according to the U.S. Department of Commerce—but will Beijing concede?

Judging from an article that has been republished by the state mouthpiece Xinhua, it appears the Chinese could be interested in buying up American natural gas.

The article was originally published in National Business Daily, a Chinese publication, but appeared online on Xinhua’s website, which communicates the Chinese regime’s official viewpoint.

Quoting a research expert from China’s Ministry of Commerce, the article notes that about half of China’s energy resources come from imports.

“The U.S. needs a big international market for its energy exports, and China is an ideal choice,” said Bai Ming, deputy head of the Ministry’s research institute tasked with studying international markets.

Natural gas is flared off at a plant outside the town of Cuero, Texas. (Spencer Platt/Getty Images)

Currently, China’s main source of energy comes from coal, which makes up 64 percent of the country’s total energy production—compared to 31 percent in the United States. Natural gas makes up less than 6 percent of the nation’s energy production, according to official data from China’s National Energy Administration.

In the article, another research expert, at the state-affiliated think tank Chinese Academy of Social Sciences called a potential natural gas sales deal with the U.S. “advantageous,” noting too that America’s desire for Sinopec, the Chinese state-run oil company, to invest in American petroleum, would be a favorable outcome for China.

The two countries are currently negotiating a $7-billion investment plan with U.S. firms and Sinopec to build a pipeline in Texas and expand an existing oil storage facility in the U.S. Virgin Islands.

Indeed, many of the 29 business executives who are accompanying Trump in Beijing are big players in the U.S. energy sector. Alaska Gov. Bill Walker is also tagging along; the state is home to large deposits of natural gas.

Meanwhile, the article remarked that Chinese experts believed the United States should loosen restrictions on U.S. high tech exports if the United States wanted more headway on the trade deficit issue.

The United States probably won’t budge on this, though, as the Chinese regime has consistently made doing business in China difficult for foreign high-tech firms.

China recently adopted intellectual property rules that would force foreign firms to enter partnerships with local companies in order to gain more access to the Chinese market, while the regime has banned products by companies like Microsoft, Apple, and Cisco from being used in government offices, giving local brands a competitive edge.

In August, Trump signed a memorandum to investigate whether China’s trade policies encourage the theft and forced transfer of American intellectual property.

A taxi passes by an Uber station outside a shopping mall in Beijing on August 1, 2016. (STR/AFP/Getty Images)

When Uber tried to launch in China, for example, it lost against domestic rivals like Didi Chuxing (“Beep Beep Travel” in English). Uber lost roughly US$2 billion in China in two years. In August 2016, Uber sold its China business to Didi in exchange for a 17.7 percent, or US$7 billion, share.

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