Arnie Saiki, Decolonize Accounting.
There has been an abundance of information around China’s oil strategy of recent, some of it sensible, most of it unremarkably a part of the western led China-bashing package, and as a whole, the glut of analysis has all been quite confusing.
That confusion should not be surprising considering our political climate. China is responding to an international economic system experiencing the United State’s own existential instability. Washington has increasingly treated tariffs, sanctions, financial restrictions, and executive orders as instruments of economic statecraft. Markets move according to abrupt policy reversals that seem to often reflect Trump’s domestic political calculations rather than any kind of long-term economic planning. Global asset managers, commodity traders, and financial institutions operate within this volatility, all profiting from uncertainty while governments and populations absorb the disruptions.
Most commentary therefore, continually asks the wrong questions. It asks why China accumulated strategic reserves, reduced oil imports, settled transactions outside the dollar, and absorbed part of a global supply shock. As a historicist, I ask a different question. What institutional conditions made these policies necessary, and what long-term project do they serve?
The answer begins with the changing political economy that emerged after the 2008 financial crisis and became institutionalized through the 2014 Fortaleza Declaration. China’s oil policy is best understood as one component of a broader transition toward a more multipolar financial and trading system rather than as an isolated response to either WW3 or a temporary energy disruption.
Tipping my hat to BRICS+ is the million dollar question
In a nutshell, market observers are puzzled over how and why the world’s biggest oil importer achieved a 40% oil reduction while maintaining energy stability.
“It’s the million-dollar question,” said Michal Meidan, head of China Energy Research at the Oxford Institute for Energy Studies. “There’s a massive level of uncertainty because we don’t fully understand what has happened.”
China’s decision to reduce oil imports during the US-Israel war provoking disruption of global energy supplies has been explained through several familiar Western theories. Some analysts describe it as protection against higher prices. Others call it a soft-power, western hawks wax war over Taiwan, leverage against Washington, or an attempt to control the global price of oil.
As addressed quite succinctly in this Max Fisher video, price explanation does not withstand the evidence presented in these analysis. China continued drawing from its reserves after market prices fell below the estimated replacement cost of those reserves. Had price protection been the objective, China could have resumed purchases at a profit. It did not. The soft-power theory also fails because China did not publicize its action and restricted exports of refined fuels to neighboring countries.
The Taiwan explanation reflects the habits of Western strategic analysis. It begins with the assumption that China’s economic planning must ultimately serve an anticipated invasion. This reverses the material sequence of any kind of rational timeline. Also, China has literally spent decades reducing exposure to maritime blockades, coercion, international kangaroo court decisions at the PCA, dollar sanctions, supply interruptions, and external control over essential commodities. China has taken well conceived measures to protect itself during peace as much as during war. Also, since the financial crisis in 2008, China has also protected the wider global trading system from a crisis produced by the very same states that claimed to guarantee it.
The more important development was China’s use of reserves, domestic production, alternative transport, electrification, coal conversion, trade with US sanctioned producers, and renminbi settlement to absorb part of a global oil disruption.
Most importantly, the financial architecture built under BRICS and later BRICS+ created an alternative system that prepared against a hegemon of manipulations and conceits, exacerbated by the tempestuous rantings of a lunatic disrupting global markets in alignment with the threnody of a collapsing neoliberal international order, caused by a generation of bipartisan US policy that largely upheld Israel’s Palestinian genocide and Zionist programs; fraternized with the predatory network surrounding Jeffrey Epstein, whose documented relationships with political, financial, and cultural elites exposed systems of impunity and institutional failure; and the backdoor promotion of global asset management schemes creating conditions like ICE detentions, financial enclosure, and the privatization of public assets.
Against this backdrop, BRICS+, particularly China, Russia, and Iran, expanded the use of renminbi-denominated trade and financial settlement to bypass the dollar-clearing system through which Washington exercises its sanctions regime and much of its extraterritorial financial influence. By settling transactions outside the U.S. banking system, these states reduced their exposure to asset seizures, payment restrictions, and secondary sanctions while demonstrating that international trade could continue without relying exclusively upon this predatory system.
The renminbi’s growing role rests not only on political willingness but also on economic reality. It is accepted because it can be used to purchase goods from the world’s largest manufacturing economy, making it a practical settlement currency for countries seeking to diversify trade while reducing dependence upon an imploding Western financial infrastructure.
What this demonstrates is that international trade can continue when predatory economic hitmen no longer controls the currency, banking, shipping routes, insurance contracts, and the political and moral leadership required to lead a global economy.
That is the material significance of China’s action, and it belongs to the institutional history of BRICS.
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