Hostname: page-component-cd9895bd7-fscjk Total loading time: 0 Render date: 2024-12-25T18:48:18.006Z Has data issue: false hasContentIssue false
  • English
  • Français

Has China's Foreign Energy Quest Enhanced Its Energy Security?

Published online by Cambridge University Press:  22 September 2011

Chen Shaofeng
Chen Shaofeng
Affiliation:
Peking University. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

In recent years China's national oil companies (NOCs) have proactively ventured abroad to look for more fossil fuel supply. Despite the divided views on their foreign energy quest, previous studies tend to consider the Chinese government and its NOCs to be a monolithic organism, and explicitly or implicitly presuppose that the Chinese NOCs' foreign energy quest could enhance China's energy security. This is, however, an untested hypothesis. To fill the gap, this article assesses the impact of Chinese NOCs' foreign energy quest on the country's energy security. Findings show that the Chinese NOCs have made some progress in their foreign energy quest, which contributes to their coffers and reserves, but that does not mean that China's energy security is greatly enhanced; in particular, the diversity and reliability of China's foreign oil sources are questionable.

Type
Articles
Information
The China Quarterly , Volume 207 , September 2011 , pp. 600 - 625
Copyright
Copyright © The China Quarterly 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Zheng, Bijian, “Zhongguo jueqi: ‘Sanda zhanlue’ yingdui ‘sanda tiaozhan’” (“Rise of China: ‘three strategies’ coping with ‘three challenges’”), Renmin ribao haiwaiban (People's Daily Overseas version), 22 June 2005, p. 1Google Scholar.

2 This was prescribed in the guidelines issued by People's Bank of China, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission, “Si bumen chutai jinrong fuwu zhichi changye tiaozheng zhengxing de zhidao yijian” (“Four departments issued guidelines on financial services to support industrial adjustment and reinvigoration”), Ying fa, No. 386 (23 December 2009), http://www.gov.cn/gzdt/2009-12/23/content_1494922.htm, accessed 6 May 2011.

3 Zhou, Ting, “Fagaiwei fuzhuren: guli qiye jiaqiang jingwai ziyuan kaifa” (“Vice-chairman of NDRC: encourage firms to speed up overseas resource development”), Zhongguo zhengquan bao (China Securities Journal), 6 January 2010Google Scholar.

4 For a diverse view, see e.g. Yining Zhao, “Zhongguo quanqiu zhao you beihou: bei hushi de guonei nengyuan gaige” (“Behind China's oil quest across the world: neglected domestic energy reform”), 21 shiji jingji baodao (21st Century Economic Report), 17 June 2006; “Zhongguo qiye zouchuqu zhi lu buneng fang zhengfu hua” (“Chinese enterprises' ‘going out’ cannot be arranged by the government”), Huangqiu caijing (Global Finance), 14 February 2005.

5 See e.g. China Development Institute, “Fulfilling China's energy security in the process of its peaceful rise,” Naoku kuaican (Reference from the Think Tank), No. 16 (2005)Google Scholar; Zhao, Zhengzhi and Yao, Wenjun, “Woguo shiyou gongye de guojihua jingying zhi lu” (“The road of international operations in China's petroleum industry”), Petroleum Education, No. 2 (2008), pp. 103–04Google Scholar; Yumin Zhao, “Zhongguo nengyuan anquan de loudong” (“Loopholes of China's energy security”), maoyi, Guoji (International Trade), No. 6 (2008), pp. 23–27Google Scholar.

6 “Zhongguo bannian nei shishi liuci haiwai binggou wei baozhang nengyuan anquan” (“China conducted six overseas M&As within half an year in order to protect energy security”), Chengdu shangbao (Chengdu Business Daily), 5 July 2009.

7 The four major NOCs engaging in oil and gas business include China National Petroleum Corporation (CNPC), China Petroleum & Chemical Corporation (Sinopec), China National Offshore Oil Corporation's (CNOOC) and Sinochem Group (Sinochem).

8 Yimin Zhao, “Loopholes of China's energy security,” pp. 23–27.

9 Fontanella-Khan, James, “Oil groups urge Indian wealth fund,” Financial Times, 17 March 2010Google Scholar.

10 Cai, Kevin G., “Outward foreign direct investment: a novel dimension of China's integration into the regional and global economy,” The China Quarterly, No. 160 (1999), pp. 856–80CrossRefGoogle Scholar.

11 Liu, Xiaohui, Buck, Trevor and Shu, Chang, “Chinese economic development, the next stage: outward FDI?” International Business Review, No. 14 (2005), pp. 97–115CrossRefGoogle Scholar.

12 Realist views can be seen from: Klare, Michael T., Resource Wars: The New Landscape of Global Conflict (New York: Henry Holt, 2001)Google Scholar; Dupont, Alan, The Environment and Security in Pacific Asia (New York: Oxford University Press, 1998)Google Scholar; Myers, Jaffe Amy and Lewis, Steven W., “Beijing's oil diplomacy,” Survival, Vol. 44, No. 1 (2002), pp. 115–34Google Scholar; Gal Luft, “US, China are on collision course over oil,” Los Angeles Times, 2 February 2004; Banaszak, Sara et al. , Promoting Energy Security in APEC through Improved International Fuel Market Operations (Hawaii: East-West Center, 1999), p. 13Google Scholar.

13 Strares, Paul B., Rethinking Energy Security in East Asia (Tokyo: Japan Center for International Exchange, 2000), p. 20Google Scholar.

14 Downs, Erica S., “China's quest for overseas oil,” Far Eastern Economic Review, Vol. 170, No. 7 (2007), pp. 52–56Google Scholar.

15 See Yergin, Daniel, Eklof, Dennis and Edwards, Jefferson, “Fueling Asia's recovery,” Foreign Affairs, Vol. 77, No. 2 (1998), pp. 34–50CrossRefGoogle Scholar; Daniel Yergin, “Asian energy needs and security implications,” paper for the International Institute for Strategic Studies, September 1997; Houser, Trevor, “The roots of Chinese oil investment abroad,” Asia Policy, No. 5 (2008), pp. 141–66CrossRefGoogle Scholar; Dannreuther, Roland, “Asian security and China's energy needs,” International Relations of the Asia-Pacific, No. 3 (2003), pp. 197–219CrossRefGoogle Scholar; Banaszak et al, Promoting Energy Security in APEC; Andrews-Speed, Philip et al. , The Strategic Implications of China's Energy Policy (New York: Oxford University Press, 2002)Google Scholar.

16 He, Wei and Lyles, Majorie A., “China's outward foreign direct investment,” Business Horizons, No. 51 (2008), pp. 485–91CrossRefGoogle Scholar.

17 Cornelius, Peter and Story, Jonathan, “China and global energy markets,” Orbis, Vol. 51, No. 1 (2007), pp. 5–20CrossRefGoogle Scholar.

18 Xu, Yi-Chong, “The competition for oil and gas in Africa,” Energy & Environment, Vol. 19, No. 8 (2008)CrossRefGoogle Scholar.

19 Wong, John and Chan, Sarah, “China's outward direct investment: expanding worldwide,” China: An International Journal, Vol. 1, No. 2 (2003), pp. 273–301Google Scholar; Yaolin, Mark Wang, “The motivations behind China's government-initiated industrial investment overseas,” Pacific Affairs, Vol. 75, No. 2 (2002)Google Scholar.

20 Wu, J.R., “Google in China is like China in Africa?” Wall Street Journal, 17 January 2010Google Scholar.

21 Taylor, R., “Globalization strategies of Chinese companies: current developments and future prospects,” Asian Business and Management, Vol. 1, No. 2 (2002), pp. 209–25CrossRefGoogle Scholar; Deng, Ping, “Outward investment by Chinese MNCs: motivations and implications,” Business Horizons, Vol. 47, No. 3 (2004), pp. 8–16CrossRefGoogle Scholar; Wong and Chan, “China's outward direct investment,” pp. 273–301; Wu, Hsiu-Ling and Chen, Chien-Hsun, “An assessment of outward foreign direct investment from China's transitional economy,” Europe-Asia Studies, Vol. 53, No. 8 (2001), pp. 1235–54CrossRefGoogle Scholar.

22 Liu, H. and Li, K., “Strategic implications of emerging Chinese multinationals: the Haier case study,” European Management Journal, Vol. 20, No. 6 (2002), pp. 699–706CrossRefGoogle Scholar; Warner, M. and Xu, X., “Late development experience and the evolution of transnational firms in the People's Republic of China,” Asia Pacific Business Review, Vol. 10, No. 3/4 (2004), pp. 324–45CrossRefGoogle Scholar; Biswatosii Saha, “Emerging MNCs from China: a case study,” Vol. 35, No. 48 (2000), pp. 4234–45.

23 Muller-Kraenner, Sascha, Energy Security: Re- Measuring the World (London: Earthscan Publications, 2008)Google Scholar.

24 Zhang, Lei, “Lun Zhongguo nengyuan anquan” (“On China's energy security”), Zhongguo shiyou jingji (International Petroleum Economics), Vol. 9, No. 3 (2001)Google Scholar; Zhao, Hongtu, “Huanjing baohu xia de nengyuan anquan” (“Energy security under environmental protection”), Zhongguo shiyou shihua (China Petroleum and Petrochemics), No. 10 (2002)Google Scholar; Wei, Yimin, Zhonguo nengyuan baogao: zhanlue yu zhengce yanjiu (China Energy Report: Studies on its Strategies and Policies) (Beijing: Kexue chubanshe, 2006)Google Scholar; Cui, Minxuan, Zhongguo nengyuan fazhan baogao (The Energy Development Report of China) (Beijing: Shehui kexue wenxian chubanshe, 2006)Google Scholar.

25 There is a plethora of writing on China's energy security. For the think tanks' views, see e.g. the speech made by Qingtai Chen, vice-president of the Development Research Centre of the State Council, in Chen, Qingtai, “Zhongguo guojia nengyuan zhanglue he zhengce” (“China national energy strategy and policy”), Zhejiang jieneng (Zhejiang Saving Energy), No. 3 (2004), pp. 7–10Google Scholar; National Economic Department, State Development and Planning Commission, “Zhongguo shiyou de jiben shexiang” (“Basic plans for China's oil reserve”), Jingji yanjiu cankao (Economic Research Reference), 9 January 2002.

26 Kong, Bo, “An anatomy of China's energy insecurity and its strategies,” Oil, Gas & Energy Law, No. 1 (2008)Google Scholar.

27 Downs, Erica S., “The Chinese energy security debate,” The China Quarterly, No. 177 (2004), pp. 22–23Google Scholar; Erica S. Downs, “China's energy security,” PhD dissertation, Princeton University, Publication Number AAT 3110228 (2004), p. 6; Andrews-Speed, Philip et al. , The Strategic Implications of China's Energy Policy (New York: Oxford University Press, 2002)Google Scholar; Lee, Pak K., “China's quest for oil security: oil (wars) in the pipeline?” The Pacific Review, Vol. 18, No. 2 (2005), pp. 265–301CrossRefGoogle Scholar; Zweig, David and Jianhai, Bi, “China's global hunt for energy,” Foreign Affairs, Vol. 84, No. 5 (2005)CrossRefGoogle Scholar; Kim, Phar and Li, Vic Y. W., “China's energy dependence on the Middle East: boon or bane for Asian security?” The China and Eurasia Forum Quarterly, Vol. 3, No. 3 (2005)Google Scholar; Jaffe, Amy Myers and Lewis, Steven W., “Beijing's oil diplomacy,” Survival, Vol. 44, No. 1 (2002)CrossRefGoogle Scholar.

28 Constantin argued that the supply-side view was problematic because it failed to allow for “the profound debate about future path for Chinese development.” See Constantin, Christian, “China's conception of energy security: sources and international impacts,” Working Paper of the Centre of International Relations, University of British Columbia, No. 43 (2005), p. 6Google Scholar.

29 National Bureau of Statistics of China, China Statistical Yearbook 2008.

30 International Energy Agency, World Energy Outlook (Paris: IEA, 2002), pp. 110 and 257Google Scholar.

31 Chen, Shaofeng, “Motivations behind China's foreign oil quest – a perspective from the Chinese government and the oil companies,” Journal of Chinese Political Science, Vol. 13, No. 1 (2008), pp. 79–103CrossRefGoogle Scholar.

32 Houser, “The roots of Chinese oil investment overseas,” pp. 141–66.

33 Chen, Shaofeng, “Marketisation and China's energy security,” Policy & Society, Vol. 27, No. 3 (2009), pp. 249–60CrossRefGoogle Scholar.

34 Erica Downs, “China's quest for overseas oil,” Far Eastern Economic Review, September 2007.

35 Dyer, Geoff and Tucker, Sundeep, “In search of illumination,” Financial Times, 4 December 2007, p. 13Google Scholar.

36 Winning, David, “China energy watch: equity oil behind CNPC refinery decision,” Dow Jones, 28 February 2007Google Scholar.

37 Downs, “China's quest for overseas oil,” p. 45.

38 Mitchell and Lahn, “Oil for Asia.”

39 Xiaoming Wang, “Zhongguo xiang E tigong 250 yi Meiyuan daikuan, huo 20 nian gong 3 yi dun shiyou” (“China provides US$25 billion loans to Russia in exchange for 300 Mt of oil over 20 years”), 21 shiji jingji baodao, 18 February 2009.

40 Based on Sudha Ramachandran, “China secures Myanmar energy route,” Asian Times, 3 April 2009.

41 National Bureau of Statistics of China, China Statistical Yearbook 2008.

42 Asia Pacific Energy Research Centre, Emergency Oil Stocks and Energy Security in the APEC Region (Tokyo: APERC, 2000)Google Scholar.

43 Leiby, P., Estimating the Energy Security Benefits of Reduced US Oil Imports (Oak Ridge: Oak Ridge National Laboratory, 23 July 2007)Google Scholar.

44 Yergin, “Asian energy needs and security implications.”

45 This paragraph is based on Philip Andrews-Speed, “China's national oil companies: risk management overseas,” the Centre for Energy, Petroleum and Mineral Law and Policy at the University of Dundee, Scotland (31 May 2007), http://www.dundee.ac.uk/cepmlp/gateway/index.php?news=29059, accessed 6 May 2011.

46 Howell, L.D., The Handbook of Country and Political Risk Analysis (3rd ed.) (East Syracuse, NY: The PRS Group, 2001), p. 4Google Scholar.

47 Campos, N.F. and Nugent, J.B., “Who is afraid of political instability?” Journal of Development Economics, Vol. 67, No. 1 (2002), pp. 157–72CrossRefGoogle Scholar.

48 “Zhongguo zaoyu ZhongYa ‘nengyuan bianlian’” (“China encountered ‘energy policy changes’ in Central Asia”), Guoji xuanqu daobao (International Herald Tribune), 15 April 2008.

49 Qian Li and Huaiyan Li, “‘Dongfang Duonaohe’ nan po ‘Maliujia pinjing’” (“The ‘Oriental Danube’ can hardly break the ‘Malacca bottleneck’”), Guoji xuanqu dao bao (International Herald Leader), 8 January 2007.

50 Downs, “China's quest for overseas oil.”

51 EU Working Document, “Commission staff working document: annex to the green paper,” Commission of the European Communities, 2006, p. 20; Matthew Gibson, “How sustainable is Russia's future as an energy superpower?” Carnegie Endowment for International Peace, 16 March 2006.

52 Kramer, Andrew E., “Russia gas dispute runs deeper than pipes, experts say,” The New York Times, 14 January 2009Google Scholar.

53 EIA, “Country reports – Kazakhstan,” EIA (July 2005), p. 6Google Scholar.

54 Ariel Cohen, “US interests and Central Asian energy security,” The Heritage Foundation: Backgrounder, No. 1984 (15 November 2006), p. 6.

55 Eurasia Group, “China's overseas investments in oil and gas production,” Report issued 16 October 2006, p. 9.

56 Guy Chazan, “Kazakh spat casts light on China deals,” The Wall Street Journal, 26 March 2010.

57 Eurasia Group, “China's overseas investments in oil and gas production,” p. 16.

58 Zijian Qi, “Zhongguo mianchu Feizhou 31 Guo daoqi zhaiwu 109 yi yuan” (“China exempted 31 African countries from 10.9 yuan due debts”), Xinhua News Agency (30 October 2006).

59 Wanguo Xu, “Zhongshihua zhulu Angela, quanyiyou cheng haiwai zhanlue touzi zhongdian” (“Sinopec competes in Angola, equity oil becoming the focus of its overseas strategic investment”), 21 shiji jingji baodao, 11 June 2006.

60 For the distinctions between the two schools, see Baldwin, David A., Neorealism and Neoliberalism: The Contemporary Debate (New York: Cambridge University Press, 1993)Google Scholar.

61 Downs, Erica S., “China's NOCs: lessons learned from adventures abroad,” Fundamentals of the Global Oil and Gas Industry (London: Petroleum Economist, 2008), pp. 27–31Google Scholar; and Eurasia Group, “China' overseas investments in oil and gas production.”

62 Wang, Jiashan and Ma, Shuang, “Jiejian guowai quanlijin, gaige youqi ziyuan shuifei” (“Reforming China's oil and gas tax and fees by reference to foreign royalties”), Ziyuan yu chanye (Resources & Industries), Vol. 9, No. 6 (2007)Google Scholar.

63 Chatham House Report, Trends in Asian National Oil Company Investment Abroad.

64 Shaofeng Chen, “Motivations behind China's foreign oil quest,” pp. 79–103.

65 Shaofeng Chen, “Marketisation and China's energy security,” pp. 249–60.

66 Gill, Bates and Reilly, James, “The tenuous hold of China Inc. in Africa,” The Washington Quarterly, Vol. 30, No. 3 (2007), pp. 37–52CrossRefGoogle Scholar.

67 Andrews-Speed, “China's national oil companies.”

68 MoC, MFA and SASAC, “Guanyu jiaqiang jingwai Zhong qiye jigo yu renyuan anquan baohu gongzuo de yijian” (“Suggestions for strengthening the human safety and protection of workers for Chinese enterprises and organizations overseas”), Guobangfa, No. 48 (2005), http://www.gov.cn/zwgk/2005-10/19/content_79807.htm, accessed 7 May 2011.

69 Wu, Kang and Han, S. L., “Chinese companies pursue overseas oil and gas assets,” Oil and Gas Journal, Vol. 103, No. 15 (2005)Google Scholar.

70 For a detailed analysis of the problem of “weak government and strong NOCs” and the NOCs' behaviour, see Shaofeng Chen, “‘China outward FDI and energy security,” Singapore: East Asian Institute Working Paper, No. 143 (20 November 2008).

71 Buckley, Peter J. et al. , “The determinants of Chinese outward foreign direct investment,” Journal of International Business Studies, Vol. 38 (2007), pp. 499–518CrossRefGoogle Scholar. For other works, see Shaofeng Chen, “Motivations behind China's foreign oil quest,” pp. 79–103; Deng, Ping, “Outward investment by Chinese MNCs: motivations and implications,” Business Horizons, Vol. 47, No. 3 (2004), pp. 8–16CrossRefGoogle Scholar; Child, John and Rodrigues, Suzana B., “The internationalization of Chinese firms: a case for theoretical extension?” Management and Organization Review, Vol. 1, No. 3 (2005), pp. 381–410CrossRefGoogle Scholar.