ABSTRACT
China’s two decades of rapid economic growth have fuelled a demand for energy that has outstripped domestic sources of supply. China became a net importer of oil in 1993 and it is projected that it will need to import some 60 per cent of its oil and at least 30 per cent of its natural gas by 2020. To appease its thirst for energy, Beijing is making intense efforts to ensure energy security that include investments in overseas oil exploration and development projects, discussions about the feasibility of several transnational oil and gas pipelines, plans to establish a strategic petroleum reserve, construction of refineries capable of handling crude oil from the Middle East, development of the natural gas industry, and the gradual opening of onshore areas to foreign companies for exploration and development. China’s energy security activities can be explained in terms of Beijing’s
long-standing fear of dependency on foreign energy as it regards oil imports as a strategic vulnerability that could be exploited by foreign powers seeking to influence China. As the United States is perceived by many Chinese as uncomfortable with China’s rising power, the government views the United States as the primary threat to China’s energy security and wishes to minimize the vulnerability of its oil supply to American power. They regard their country as being especially vulnerable to American power in a world in which the United States is the sole superpower. More explicitly, the Chinese government is uncomfortable with the fact that the US navy dominates the sea-lanes, stretching from the Persian Gulf to the South China Sea, through which the bulk of China’s oil imports must pass. There is a concern that if Sino-US relations sour, the United States could use its superior military power to disrupt China’s oil supply. Some even suggest that Washington has already implemented an ‘energy containment’ policy against China, the objective of which is to weaken China by gaining control of the energy resources in western China and blocking Beijing’s access to oil imports. Energy security, and particularly oil supply security, has become a major
concern for the Chinese government over the past several years. The focus of this anxiety is the vulnerability of seaborne energy imports. At present, China lacks the naval power necessary to protect its sea-lanes of communication (SLOCs). Beijing fears that during a national security crisis ships
carrying energy resources could be interdicted by hostile naval forces. Any disruption to the free flow of energy resources into China could derail the economic growth on which the Chinese government depends to shore up its legitimacy and pursue its great power ambitions. China’s heavy use of the Malacca and Lombok/Makassar straits in
Southeast Asia is emblematic of this concern. The Malacca Strait is a narrow and congested waterway separating Indonesia and Malaysia, with Singapore located at its southern tip. As the shortest route between the Indian and Pacific oceans, the strait is one of the world’s most important waterways. More than 60,000 vessels transit the strait each year, carrying 25 per cent of global trade. The Lombok/Makassar Strait passes through the Indonesian archipelago and is used mainly by very large crude carriers. In terms of volume of oil shipped, this route is of near-equivalent importance to the better-known Malacca Strait. For China, the strategic significance of these straits increases every year.
At present, approximately 60 per cent of China’s crude oil imports originate in the Middle East, and this figure is expected to rise to 75 per cent by 2015. Oil from the Persian Gulf and Africa is shipped to the People’s Republic of China (PRC) via the Malacca or Lombok/Makassar straits. Over the past few years Chinese leaders have come to view the straits, especially the Malacca Strait, as a strategic vulnerability. In November 2003 President Hu Jintao declared that ‘certain major powers’ were bent on controlling the strait, and called for the adoption of new strategies to mitigate the perceived vulnerability. Over the past 18 months the Malacca Strait has attracted the attention of
security analysts for reasons other than China’s oil supply security. During 2003-2004 the straits witnessed an upsurge in pirate attacks. Perceived lax security in the strait engendered concerns that transnational terrorist groups might link up with pirates to disrupt maritime traffic and hence global commerce. International criticism led the littoral states (Indonesia, Malaysia and Singapore) to step up strait security through the establishment of coordinated air and naval patrols. As a result of these and other initiatives, the number of pirate attacks in the area declined in 2005. Yet piracy and other transnational threats in the strait remain major concerns. Owing to sensitivities over sovereignty, Indonesia and Malaysia have firmly rejected the idea of external powers such as the United States, Japan or India permanently stationing military forces in the strait. They have welcomed help from external powers, however, in the form of capacity building, intelligence exchange and training. As a heavy user of the Malacca Strait, the PRC has a vested interest in the
elimination of transnational threats in the waterway. Yet Beijing remains uneasy at the prospect of a greater role for external powers in securing the strait. Chinese security analysts have accused the United States and Japan of using the threat of terrorism as a pretext to expand their naval presence in and around the strait. The PRC has also watched with concern India’s
enhanced presence in the area, especially the modernization of military facilities on the Andaman and Nicobar Islands, located near the northern entrance to the Malacca Strait. Nevertheless, China does not want to be left out and has offered the littoral states its assistance to improve security in the strait. At a meeting held in Jakarta in September 2005 to discuss strait security, Ju Chengzi, director general of China’s Ministry of Transportation, said the PRC government was willing to assist the littoral states with capacity building, technical support, training programmes, hydrographic surveys and navigation aids (Xinhua, September 7, 2005).1 More specific details have yet to be released. Meanwhile, China is pursuing a number of options to mitigate its depen-
dence on oil imports and reduce the country’s strategic vulnerabilities. In an effort to reduce import dependence, the PRC continues to rely on domestically produced coal for its energy needs. Beijing has also emphasized energy conservation and efficiency, the expansion of nuclear power generation, and the development of alternative and renewable energy supplies. In 2004 construction began on four strategic petroleum stockpile (SPS) facilities on China’s eastern seaboard capable of stockpiling 20-30 days’ supply of oil imports. Two more are likely to be built in Guangdong province and another on Hainan Island.
