April 02, 2012
The Strategic Logic of Resource Nationalism
The Robert S. Strauss Center for International Security and Law welcomed Jennifer Lind, Assistant Professor of Government at Dartmouth College, on April 2, 2012. Strauss Center Director, Frank Gavin, introduced Lind.
Lind spoke about the costs and benefits of China’s policies of resource nationalism regarding oil. She began by outlining four basic policies associated with resource nationalism and defining the debate between resource nationalism and free market policy. According to Lind, China’s policies are based off of the theory that it is best to own oil in the ground so no matter what happens in the market, China is able to import oil back to their country. On the other hand, supporters of free market theory argue that it does not matter who owns the oil because importers who are willing to pay the highest price will always have access to oil.
Lind explored four environments that could affect China’s access to oil and whether resource nationalism could help under each situation. Under “normal” conditions when there is a high supply of oil and price determines the distribution of the supply, resource nationalism only marginally helps China. If there is a global shock in supply of oil, due to a natural disaster or war, China’s policies of controlling their own supply, and maintaining relationships with oil suppliers are beneficial. The third situation Lind discussed was an embargo, which by definition is when oil is not distributed according to price. China’s strategy of having its own oil companies prevents the possibility of a successful embargo against them. The final scenario Lind addressed was a blockade. China’s policies of building influence with oil-rich countries, directly controlling transportation and forming strong relationships with industry companies mitigate the threat of a blockade for China.
Lind concluded that resource nationalism can help oil importers access supplies, especially in crisis conditions. Specifically, resource nationalism can help insulate China from supply shocks, embargos and blockades.
Lind took questions from the audience on how technology is factored into resource nationalism, what effects the natural gas revolution has on Lind’s arguments, the South China Sea, and if China plans to reduce its reliance on coal.
Watch the full presentation below: