chapter  7
16 Pages

Integration, the West and international energy policy

The previous chapters have sought to identify the linkages between China’s domestic energy needs and its increasingly ambitious international energy policy, which is focused in particular on ensuring the secure supply of oil from international markets and from equity investments. As the previous chapter highlighted, Chinese oil companies have been major drivers of this ambitious international expansion, though they have also responded to the needs and interests of the host oil-producing countries. The Chinese government has taken a leading role in seeking to guide and support this international strategy. This goes back to the 1999 announcement by the Central Committee of the Communist Party of the ‘go out’ (zouchuqu) strategy, offering an array of investment incentives for Chinese companies to expand overseas, which was particularly directed at encouraging these companies to secure contracts with oil and gas producing countries.1 Government interest in the international energy sector only increased during the 2000s as prices rose and US intervention into Iraq and Afghanistan accentuated fears that China’s access to global energy sources was under threat. In early 2004, Li Junru, vicepresident of the CCP’s Central Party School, argued that it is the global competition for energy resources, rather than Taiwan, which was now the most important factor affecting China’s ‘peaceful rise’.2 Hu Jintao’s reported enunciation of the so-called ‘Malacca dilemma’ at around the same time, which is discussed further in Chapter 9, highlighted the real anxiety in Beijing about the potential threat of a US-imposed oil embargo on China.