China's Energy Security and Geo-Economic Interests in Central Asia
Liyan Hu and Ter-Shing Cheng
Energy security, a relatively new term in international relations jargon, implies states (or other political communities) securing adequate and reliable energy supplies at stable prices. Currently, this involves securing so-called primary energy supplies which include, coal, petroleum, natural gas, hydro-electricity as well as a variety of other, alternative resources. A large proportion of primary energy is converted into electricity and indeed, the more advanced an economy, the larger the proportion electricity represents of final energy consumption.
At a growth rate consistently hovering around 9 %, the rapid and somewhat gluttonous economic development in China has produced negative echo effects such as environmental degradation, economic disparities and, recently, an energy crisis. As a state develops economically, especially at the rate China has, its level of energy consumption rises as well. As long as China’s population growth and economic boom continue at rapid pace, its energy consumption will continue to climb sharply as well.
Recently, China became the second highest energy consumer in the world, surpassing Japan though still significantly trailing after the US. The constant and safe importation of oil has thus become a crucial issue in China’s energy sector (Yang, 2001). In addition to the Middle East – China’s main import conduit – most other Chinese energy investments are made in its western, Central Asian neighbors, particularly Kazakhstan.
Investments to the Central Asian republics usually gravitate around constructing or repairing infrastructure that may be used for energy importation such as road works and railroad networks. Central Asia is a significant raw materials and market place for China. Historically, China has done little to influence Central Asia, partly due to its own instability along its periphery, and internal problems in the Chinese heartland.
The emerging arena of China’s new posture is Central Asia, where, with Russia, it co-dominates the Shanghai Cooperation Organization (SCO), a nascent multilateral venture. China has gone to great lengths to foster warm relations with each of the newly independent Central Asia states. However, economic competition in Central Asia will intensify in the coming years and it is worried that more powerful competitors such as the US and Russia may become more assertive in the quest to secure regional oil supplies.
Similarly, other powers such as Japan, the EU, Iran and Turkey, will also assert their influence in the region. How can we make sense the views of China regarding energy security in Central Asia and the ensuing economic benefits such energy security will likely induce? This article examines Chinese engagement in the energy sector of Central Asia by asking the question: how geo-economic factors affect China’s energy strategy in Central Asia and correspond to China’s economic development and social transformation.
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Volume 2 / Issue 2 / November 2008
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