NS4053 The Prospects of the U.S.-

Chinese Relations over Energy Issues

ROK Army Captain Lee, Hyun Haeng

Introduction

• The CCP legitimizes its rule through economic growth, so the energy resources are regarded as blood for its survival.

• China pursues a total directional energy strategy in Central Asia, Africa, and the Middle East.

• It tries to open the so-called ‘New Energy Silk Road’ of the 21st Century.

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1. Importance of Energy

• As the world’s second largest gas field was found in Turkmenistan, China engaged in successful resource diplomacy with Turkmenistan by building the 2,000-kilometer gas pipeline.

• By acting as a diplomatic supporter for Iran, Beijing could almost monopolize resource development rights in Iran.

• It allocated more than 45 % of its total loan to Africa, and Hu Jintao visited 19 African countries during his term.

2. China’ Energy Policy

Introduction

• The U.S. expresses significant concerns about China’s aggressive energy securement policy.

• China supports rogue states (Sudan, Iran, Myanmar, and Congo) and seeks neo-colonialism to ensure its energy security.

• The U.S.-Chinese competition for energy can lead to a serious political conflict, and in the worst case, to a broad military collision.

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3. The U.S. Response

• Both conflict and cooperation factors exist in the U.S.-Chinese energy competition.

• The characteristic of their relations is determined by the dominant factors which have greater influence in certain situation.

• Thus, their relations over energy issues will be able to be positive in the future.

4. Argument

Possibility of Conflict

• China’s rise can adversely affect the U.S. global positioning as well as its energy supply.

• The U.S. concern about China’s energy consumption emerged seriously in the Bush administration (9/11 attacks and Iraq war).

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1. Background

• The U.S. National Energy Policy in 2001, which pointed out the recent surge in the energy consumption of China and India, indirectly expressed the U.S. intention to check China while cooperating with India.

• At the hearings of 2005 about the expansion of China’s influence in Asia, the U.S. Congress worried that China could be a catalyst for Asian resource nationalism as well as monopolize or deplete world energy resources.

• As CNOOC made a cash offer for Unocal in 2005, the U.S. House of Representatives passed the resolution that said CNOOC’s takeover of Unocal could encroach the U.S. national interest.

• This made China more worried that it could be hard to meet its increasing energy needs due to the U.S. policy restricting China’s access to the international energy markets.

Possibility of Conflict

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2. Examples

Possibility of Conflict

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3. Summary• The U.S-Chinese relations over energy issues in the 21st century can

be summarized as the U.S. containment of China’s rise and China’s response against the pressure.

• China actively entered overseas energy markets to minimize the possibility of its sudden energy shortage by the U.S. energy blockade.

• To improve its energy diplomacy, Beijing expanded its oil trade with rogue states and supported their military dictatorships.

• In conclusion, China’s energy securement policy, which was against the U.S. global strategy, not only increased the probability of the U.S.-Chinese conflict over energy issues but also incited their power competition for regional hegemony.

Possibility of Cooperation

• The U.S. decides that its energy cooperation with China can be helpful to strengthen their relations, require China’s responsible behavior for environmental problem, and prevent the global spread of weapons.

• Their discussions about energy cooperation, which were initiated in the 1970s, focus on diverse issues including energy technologies, efficiency improvement, and environmental pollution.

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1. Background

• Their energy cooperation was activated successfully in the Obama administration.

• In Obama’s visit in Beijing in 2009, two leaders agreed to jointly invest 150 million dollars in the Clean Energy Research Center for and cooperate in global issues including climate change, energy shortage, and environmental problem.

• They have the U.S-China Energy Policy Dialogue and the U.S.-China Strategic and Economic Dialogue.

Possibility of Cooperation

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2. Examples

• The U.S. tries to involve China in multinational energy R&D to help China improve its energy efficiency and facilitate the U.S. access to the Chinese markets.

Possibility of Cooperation

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3. Summary

• They are sharing common strategic interests and continuing diverse discussions to seek practical energy cooperation.

• They can improve not only their energy security but also their overall political and diplomatic relations by reducing the U.S. trade deficit and providing China with sufficient foreign capital.

• If their mutual trust in energy field is improved, their hegemonic energy competition will not develop into an extreme form of conflict.

Conclusion

• In the short-term, it is obvious that there are structural limitations making their conflict over energy sources inevitably fierce.

• China’s rising energy consumption becomes the major cause stimulating their rivalry over the limited energy sources.

• The U.S. is strengthening its political and military influence in the world to keep its global energy hegemony.

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1. Short-Term Prospect

• Will this competition surely drive their relations to a zero-sum game?

• Their relations over energy issues have the possibility of both conflict and cooperation in reality.

• They are sharing several common interests (reasonable oil price, safer energy routes, and stable global politics and economy).

2. Opposite View

Conclusion

• To create this ideal situation, their transformation in the technical and normative aspects are required.

(1) China needs to modify its energy diplomacy so that it can abide by international norms.

China should be more careful in interacting with the countries defined as rogue states by the international society led by America.

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3. Necessary Conditions

Conclusion

(2) Western countries should try to avoid the radical confrontation with China over energy issues by maintaining cooperative relations and helping it enter the global economy.

They have to abstain from simply regarding China’s energy diplomacy as a strategic challenge.

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3. Necessary Conditions

(3) Once the new energy sources replacing existing fossil fuels appear, these two states’ energy competition can be eased significantly.

This is because the continuing imbalance between energy supply and demand will further increase the need for global cooperation in developing alternative energy resources.

Total U.S.-China Clean Energy Trade Flows (2011)