Low Profile No More? Resource (In) Security and Chinese World Views Shaun Breslin - University of Warwick.

Low Profile No More? Resource (In) Security and

Chinese World Views

Shaun Breslin - University of Warwick

韬光养晦 Hide brightness and nourish obscurity

Hide capabilities, bide our time and accomplish some things

Xiong Guangkai – deliberately mis-translated by people with a Cold War mentality

Countering or reinforcing the “China Threat Thesis”?

Who Speaks for China?

Yang Jiechi on the China Dream

“Comrade Xi Jinping's comprehensive, profound and exquisite description of the Chinese dream”

“Developing a G2 relationship without abandoning the rest of the world”

equality, justice and mutual benefit

“The Great renewal of the Chinese nation”

“a continuation and development of the important thinking of China's peaceful development”

“attempts by certain international forces at distorting and smearing the Chinese dream”

2005 China National Offshore Oil Corporation and Unocal

2008 Huawei and 3Com

2009 China Northwest Nonferrous International Investment Companyand Firstgold

2010 Anshan Iron and Steel Group and the Steel DevelopmentCompany

2012 Huawei again in Aistralia

Investment Projects blocked through security concerns

Development of overseas resource development plan in 2001

Around 180 projects in 37 different countries

State Owned National oil company is dominant actor

acquired UK, Russian and Canadian companies

including “hostile” take-overs

Export-Import bank acts as state credit agency to support overseas investments

Active energy diplomacy by the President – 11 MOUS with energy producing countries. Particularly keen to benefit from changed political situation in Iraq

Expansion into land leases and purchases

even leading to a coup in Madagascar in 2009

China, Resources and not quite yet the End of “The End of History”?

Barma and Ratner 2006“[China] could set scores of developing nations away from the path of liberal democracy, creating a community of countries that reject Western views of human rights and accepted standards of national governance”

•undermine the liberal West’s attempts to use sanctions to promote political change in “rogue states” like the Sudan, Burma and Zimbabwe•bolster authoritarian regimes that the West is trying to persuade to move towards more democratic political systems•undermine attempts to encourage the promotion of Human Rights and more tolerant political cultures in existing (imperfect) democracies•encourage existing democratic governments to move towards more authoritarian forms of politics•bolster socialist/proto-socialist democratic governments – some of whom are hostile to the interests of the West/US•undermine the promotion of (neo)liberal economic paradigms and reinforces the appeal of strong state

External Conceptions of China’s Global (Energy) Role

China and the price and distribution of global resourcesChina as new (and big) market playerChina as predatory market player

state companies and national objectives

China as system shaper?

China and the global liberal ordershoring up rogue statesalternative partner alternative model?

Changing patters of power and the global financial crisis

Sea lanes and communications and controlling global suppliesChina’s territorial claims in South China Seas and elswhere

Pak “oil (wars) in the pipleline?”

Sources of supplies ?

1993 – major suppliers were Oman, Indonesia, Yemen and Angola (c70%)

2003 – Saudi Arabia, Iran, Angola, Oman, Yemen and Sudan (c75%)

2011 - Saudi Arabia (20%), Angola (12), Iran (11), Oman (7), Russia (7), Sudan (5), Iraq (5), Venezuela (4), Kazakhstan (3.5), Kuwait (3)

Zha Daojiong - Self sufficiency and insecurity

Phase One – neither sufficient nor secure, 1949-63

Phase Two – sufficient but insecure, 1963-mid 1970s

Phase Three – declining self sufficiency, increasingly secure, mid-1970s-1993oil imports start from Oman, 1983net importer of oil, 1993 (petroleum, 1996)

Phase Four – not sufficient not insecure, but getting concerned1993-2000ishChanging conceptions of security

from geostrategic to geo-economic

Oil demand increases

Phase Five, not sufficient and growing concerns, 2000-

regime legitimacy and “dependence” on the capitalist global economy

Changing conceptions of energy securitysustainability of coal driven economy

economically and environmentally

1999-2000, Brent US$10.44 per barrel to US$25.10

1999-2000, Chinese net oil imports from US$3,876mn to US$12,733

“old” security concerns in Africa and Middle East

currency policy and the dollar “peg”

China as a late comer into an existing energy economy

Dominance of US and Western interests

Coal is still be far the most important source of energy

The Domestic Context

2009 – becomes net coal importer (but less than 10 per cent of total use)primarily due to quality and distribution bottlenecks

Efficiency and usageenergy per $ produced decreasing again after increasing as a

consequence of post-crisis stimulus(a) still high(ish) in international comparison(b) varies greatly between places and types of activity

Refining capacity and technical ability – need for “light and sweet” oilNuclear power and clean power account for 1% and 8% of China's total power generation respectively

the green agenda (and the decline of suntech)

The distribution of power within Chinacompetitive provincial growth strategies and “irrational” resource

utilisationexacerbated by response to the global crisis

But “Going Global” is clearly important

SOURCE: Center for American Progress at http://www.americanprogress.org/issues/2010/04/china_oil_map.html

A state led project to dominate global energy supplies?

BUT …..

New actors - local companies, private operators

Role of Competition BETWEEN Chinese SOEs in overseas marketsas well as increasingly at home

Downs, Brautigam and others – companies take the lead and have operational autonomy

Increased autonomy due to financial resources, globalised management, seeking advice and funds from global sources

Many energy related projects do not have direct energy provision consequences for China

commercial projects (often with state help) to make moneywith development consequences for the partner

eg: Upgrading electricity generation in Malawi

Mayer and Wubbeke overseas oil assets c.30% of net imports

Jiang and Sinton for International Energy Agencyc.36% in first half of 2010

But “most” (?) simply sold into global markets rather than going straight back to China

“almost all the equity production Chinese NOCs have in the Americas was sold locally instead of being shipped back to China (FACTS Global Energy, 2010). Considering geographical distances, it is more costly to ship that oil to China. Additionally, Venezuelan heavy crude is not compatible with existing Chinese refining capacities.”

Some Conclusions(1) Important to separate out different actors, interests and voices

the geostrategic state project from other objectives

(2) Towards a liberal energy peace?

•US naval hegemony and stable oil supplies•the USA is the country with which China has launched the largest number of collaborative energy development programmes and projects•energy policy a key agenda item in bilateral dialogues – not just specific energy related fora (US-China Energy Policy Dialogue, the US-China Oil and Gas Industry Forum, the Peaceful Uses of Nuclear Technologies Agreement), but in broader areas of discussion as well (the US-China Economic Development and Reform Dialogue, the Joint Co-ordinating Committee on Science and Technology, and the US-China Strategic Economic Dialogue)•Need for imported oil (and oil that China can refined) requires a peaceful and stable international environment•China, economic interests, and intervention in Libya

(3) But easily become politicised

perceptions of insecurity remain strong

Why is the US surrounding China ?

East Asia as a bellwether for China as a global power

(4) Wei Zonglei and Fu Yu

China’s four different simultaneous identities

(5) Chinese world view

dissatisfied responsible great power