With the distinct possibility of China invading our ally Taiwan in the relatively near future, it may be prudent to review China's hold on this country. The current administration appears to have a "soft-on-China" policy. Why would this be possible? Are we compromised?
Since Republicans gained control of the House after the 2022 elections, they have been able to subpoena the bank records of several members of the President's own family. From the ongoing investigations they conclude that there may be evidence that Biden's family had Chinese income from influence-peddling when Biden was a senator or vice president. It remains to be seen if this is true, but recent actions give some credibility to this theory. If true, then it would explain why the Chinese spy balloon was allowed to surveil military sites from Alaska to the Carolinas before it was finally shot down in the Atlantic Ocean after completing its work.
Another fact that appears to support the theory is that the Chinese have been allowed to own 380,000 acres of US farmland, most of it in close proximity to defense installations. In the event of a Chinese invasion of Taiwan these "farm" sites could gather valuable information on whether and how our country would respond.
The United States has a large trade deficit with China. In 2020 US exports to China were $124 billion, whereas imports from China were a whopping $436 billion. In fact, 91% of Waymart's products are made in China. Walmart has a very large container ship that carries 15,000 containers and travels at 31 knots. It can make the journey from China to the west coast in five days-- four days faster than most other container vessels. Most of the containers return to China empty. These Chinese exports are possible because China pays poor wages to its workers, making their goods very inexpensive in our market.
Further evidence of the weak-on-China policy comes from the sales to China of US crude oil from our Strategic Petroleum Reserve (SPR). It may be helpful first, however, to give a brief review of the SPR.
The SPR was created in 1975 following the OPEC oil embargo to act as an emergency safety net. The oil reserve is contained in leached out salt domes in Louisiana and Texas. These underground storage caverns are leak proof and are ten times cheaper than above ground tankage. The total capacity of all the domes comprising the SPR is 174 million barrels (Mbbls.). At the outset, a group of petroleum consuming nations banded together to form the International Energy Agency (IEA). The requirement of that body was that each member would "maintain oil stocks of no less than 90 days of net imports" of oil.
Another US stipulation was that "in no case may the Reserve be drawn down...if there are fewer than 252,400,000 bbls of petroleum product (i.e. 35% of full capacity) stored in the reserve." In the United States the Department of Energy maintains our emergency stockpile. The SPR was at or near its full capacity during the period 2005--2020 but has been reduced to about half that amount since.
In the past the SPR has been used in several emergency situations. In 2005 hurricane Katrina shut down many oil rigs in the Gulf. 11 Mbbls were released to supply refineries that were affected. In 2011 the unrest in Libya threatened worldwide oil supplies. Consequently 30 Mbbls were released. There have been several smaller releases following local shipping channel blockages.
But in the last couple of years Congress has passed a bill allowing sales of SPR oil in the open market. These do not require emergency situations. Biden has sold more than 260 Mbbls in recent months.
The Institute for Energy Research says that about 6 Mbbls were sold to China (4 in Nov '21 and 1 in Apr '22), much at a discount from market prices. This infuriated some Senators at the time. John Kennedy from Louisiana said: "At a time of skyrocketing inflation and record high gas prices, and with SPR drained to its lowest level since 1986, it is reckless and inexplicable that President Biden would allow oil from the SPR to be exported to China." Kennedy and Ted Cruz of Texas introduced a bill that would prohibit sales of SPR oil to unfriendly countries. That 2022 bill, now reintroduced, is still awaiting passage. So, there you have it. The soft-on-China policy has allowed China to increase their reserves of oil, while ours have been drastically reduced.
One final example of favorable treatment for China is the Paris Climate Accord. China, along with India, is designated as a third world country, thereby gaining favorable breaks for many years from other regulations. It's time for that designation to end.
Should China invade Taiwan, and let's hope and pray that it doesn't, we have a lot to overcome. Many dominoes could fall if we came to Taiwan's aid.
Peter Gilderson, Madison.
