ABSTRACT
Energy cooperation between China and Southeast Asia since its initiation in the late 1970s has been viewed as an important part of overall China-Southeast Asia relations. After the global financial crisis in 2008, China expanded its trade, foreign direct investment (FDI) and official development assistance (ODA) to Southeast Asia. As a result, energy cooperation developed to a new level, extending from project-based exploration to large-scale infrastructure construction and production chain establishment. For Beijing, greater economic cooperation can strengthen China’s overall energy security. For Southeast Asia, oil and gas pipelines, joint energy projects, are likely to have a lasting impact in the region and carry greater incentives for economic integration (Ali, 2010). Despite the increasing pace of broad energy cooperation, several factors are
pushing some Southeast Asian countries towards ‘energy protectionism’ or ‘resource nationalism’. The increasing presence of Chinese state owned business in the region has been reminiscent of colonial history. Some observers are concerned that China will also replicate the sort of mercantilist strategy that Japan once adopted during its high-growth phase (Beeson, Soko & Wang, 2011). Cross-border pipelines and hydro-power projects have often generated conflicts and local resentments, ‘as parties with different interests and motivations are involved, and land use cannot be compensated properly’ (Stevens, 2010). Local communities’ and civil societies’ continuous plea for more sovereign control over natural resources can make it harder in future for Southeast Asian countries to work toward mutually acceptable contracts with Chinese companies. The past few years have witnessed mounting distrust and concerns in local communities in Southeast Asia (particularly in Myanmar, Vietnam and Indonesia) specifically targeting China-sponsored large infrastructure projects. Whether China is taking a state-centric energy security approach aiming to
secure energy supplies by gaining direct control of oil and gas fields and supply routes is heatedly debated among expert and policy advising circles. Those who believe China is adopting a mercantilist energy strategy have
pointed out that such an energy security approach could potentially destroy market order, erode confidence in fair access to future supplies, and aggravate strategic distrust between the investing and recipient countries (Collins & Erickson, 2014). They also argue that even though China’s loans to developing countries do not come with political conditions, it remains to be seen whether they can be used in the future as leverage to sway the policies of recipient countries in China’s favour. Others, however, have provided evidence for the corporate autonomy of Chinese energy firms and separation of governmental strategies and corporate performance (Jiang & Sinton, 2011; Zhao, 2015). Hence, the questions posed here are: In which direction will ChinaSoutheast Asia’s energy resource cooperation go? What is the impact of China’s energy investment on the local communities in Southeast Asia, and how do host governments react to local resentment due to China-sponsored projects? Is China’s behaviour merely mercantilist? What are the constraining factors of China’s energy quest in Southeast Asia? This chapter starts with an overview of China’s energy ties with Southeast
Asian countries since the 1970s and pays particular attention to resource diplomacy and energy investment. It then compares various Southeast Asian countries’ concerns about and, more importantly, responses to China’s quest of energy resource, followed by a discussion on whether China’s behaviour is mercantilist or not. Finally, this chapter concludes with the observation that the extent to which China can exploit Southeast Asian countries’ natural resources or national economy depends not merely on the China side but also on the regulatory frameworks and domestic politics of the recipient country. Even though there is an image of China’s insatiable energy appetite, the actual operation of Chinese energy firms is mostly guided by the rules of global markets rather than the administrative orders from Beijing.
