China’s Search for Energy Security: Implications for U.S. Policy

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EXECUTIVE SUMMARY

This report examines China’s global search for energy security, draws implications for U.S. global energy and security interests, and recommends policies that will allow the United States to respond more effectively to China’s expanding global energy impact.

Main Argument:

China is rapidly emerging as a major force in both world energy markets and global energy geopolitics, and key aspects of China’s new global energy activities are creating new challenges for U.S.-China relations. As the world’s two largest energy consumers, however, the United States and China share key common interests in the energy sector. Both nations can benefit if improved cooperation replaces the current drift toward a competitive energy relationship. The issue of trust will inevitably weigh heavily in determining future levels of cooperation. This paper proposes a sober U.S. policy that will enhance trust and strengthen multilateral, regional, and bilateral cooperation on energy issues.

Policy Implications:

There are a number of ways to promote constructive relations between the United States and China

• The United States should seek creative ways to integrate China into the International Energy Agency (IEA) and the Group of Eight (G-8). By helping to give Beijing a “seat at the table,” the United States can increase the chances that China will become a “stakeholder” in the major efforts of these institutions to deal with energy supply issues.
• The United States should begin taking measures to promote the development of a Northeast Asia Security Community consisting of the United States, Japan, the Republic of Korea (ROK), China, and Russia. This group over time can take up regional energy issues. Washington needs to promote an invigorated bilateral energy dialogue with Beijing.
• The United States would benefit from a set of policies that focuses on achieving the following goals: raising the importance of energy in bilateral dialogue at a policymaking level, avoiding measures and rhetoric that needlessly aggravate China’s sense of energy vulnerability, discouraging mercantilist competition for oil supplies in China and elsewhere in Asia, and encouraging energy efficiency, diffusion of new energy-saving technologies, and energy market reform in China.