Page 364 - Sustainable Cities and Communities Design Handbook

Energy Economics in China’s Policy-Making Plan Chapter j 17 337

presence in the regions is seen as one of the major geopolitical changes in the
aftermath of demise of the Soviet Union’s power and the consolidation of
China’s new power (Peyrouse, 2007). The two regions are now set to play a
major part in China’s energy policies and in the war against the separatists in
China’s northwestern region. The economic and political rise of the Chinese
has a great implication in the two regions in terms of the reinforcement of
China’s policy objectives and the reinforcement of the geopolitical alliance
embedded in the strategic calculation of energy security. Currently the Iran
nuclear issue is testing China’s foreign policy orientation in the context of its
energy security consideration. ChinaeIran partnership has grown out of
mutual need for products, ranging from arms and technology to consumer
goods and China’s soaring need for energy supplies (Dorraj and Currier, 2008,
p. 70). Thus it has been a painful foreign policy decision for China to lend
support to the US-led United Nations’ sanctions against Iran’s nuclear
program, fearing the grave consequence that this might lead to loss of one of
3
its major energy suppliers. China is being torn between the imperative need
for energy on the one hand and the US pressure on its role as “responsible
stakeholder” and “strategic reassurance.” 4
The enlarging discrepancy between the economics of energy demand and
domestic supply is driving China to reply on a number internal and external
policy choices to keep the planned growth rate, a tendency that makes it
politically vulnerable to economic setbacks. First, China has to provide huge
investments into discovering oil and natural gas resources in the Western
part of the country despite the burdens of massive capital investment, high
production costs, infrastructures, as well as environment and geological risks.
Second, China has to depend on the unstable Persian Gulf areas and other
crude oil suppliers in Africa and Central Asia where civil wars, geopolitical
risks, and sociopolitical conflicts are unavoidable. Even if the energy supply
sources are secure, the transportation issue is becoming another headache for
China. In the case of its neighbors, China can construct an oil and natural gas
overland pipeline from Central Asian and Russia. Cross-land pipeline options
were already put on the highest negotiation table between China, Russia, and
other Central Asian countries.
In connection with its rising energy import, the transport of energy
products has been the lifeline of China’s economic development. China’s
coastal line areas are the heart of its economic growth and the frontier of its
international trade. China’s growing maritime ambitions, which already

3. According to data released by the General Administration Agency, Iran supplied 11.3% of
China’s energy consumption in 2009 (adapted from People’s Daily Online, February 10, 2010).
4. “Strategic reassurance,” coined by James Steinberg, Deputy Secretary of State, in a conference
sponsored by the Center for a New American Security, states that “China must reassure the rest
of the world that its development and growing global role will not come at the expense of
security and well-being of others.”