Chairman Bartholomew, it is a great pleasure to appear before you, my former commission colleagues and the members newly named this year. The commission's past work and, I am sure, your work this year perform a unique function for Congress; there is no other body which considers the totality of U.S.-China relations as does the commission. If the commission did not exist, we should want to invent it.

You have asked me to testify today to suggest policies our government might adopt based upon the strategic consequences of China's rising energy consumption. While I am aware that the Commission heard a panel's worth of testimony yesterday on what those strategic  consequences are, please permit me a brief digression to summarize my views on the matter. It may help place the subsequent policy recommendations in a more complete perspective. And, because I intend to try to adhere to the seven-minute rule I will offer a broad approach, a way of thinking about an American response, rather than a compendium of particular policies.

In a nutshell, China's rising energy consumption already has had a number of strategic effects. The most obvious is the effect on the price of energy resources themselves; to modern, industrial economies the price of energy is itself a semi-strategic matter. Demand for energy, especially that generated from the fossil fuels of the Middle East, is accelerating faster than the ability to discover and develop it. If the theory of market economics were purely true, the People's Republic would share with the United States a similar, possibly even a more enthusiastic, commitment to ensuring cheap and plentiful energy supplies. The economic dimensions of this question I will leave to professional economists--as I will leave the quasi-strategic dimensions of environmental concerns to my fellow panelists--but it does lead me to a consideration of the geopolitical effects of Chinese energy policies. These, I think, are the most immediate and compelling issues that ought to shape any American policy response. As things now stand, the effects of rising Chinese energy consumption is simply a reflection of the
larger effects of China's rise as a global great power. . . .

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Thomas Donnelly is a resident fellow at AEI.