The Hindu : China's strategic concerns

Online edition of India's National Newspaper
Wednesday, Jun 26, 2002

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China's strategic concerns

By Sonika Gupta

It is simplistic to conjecture that China's aggressiveness on Taiwan will also be extended to its energy concerns in the South China Sea.

THE RECENT discovery of a natural gas field in north China's Inner Mongolia Autonomous Region with massive proven reserves is welcome news for the Chinese Government. Its Ministry of Science and Technology announced that the gas field, some 602.5 billion cubic metres in size and estimated to be the country's largest, will provide sufficient energy support for a considerable time for Beijing and Tianjin municipalities, north, east and central China, Shaanxi and Gansu provinces and the Ningxia Hui Autonomous Region in the northwest. It will also reduce the dependence on coal thus improving the air quality, especially in Beijing. It is expected that the development of this gas field will greatly ease energy shortages in China's eastern areas.

China's impressive economic growth has been accompanied by a spiralling demand for energy. It is estimated to be the second largest consumer of energy in the world after the United States. Although its per capita consumption of energy is low, it is projected that by 2020 its consumption will equal that of all the OECD countries combined. If the present levels of economic growth are sustained, China's energy imports will be almost as high as its current production.

China has large reserves of coal and exports it. To keep pace with massive growth in domestic and international demand, it has almost doubled coal production since 1980 and by 2020 is expected to meet approximately 15 per cent of Asia's total coal import demands, including exports to Japan and South Korea.

In 1993, China became a net importer of oil. According to the latest figure quoted in the People's Daily, it imported 60 million tonnes of crude oil in 2001, which accounted for 30 per cent of the national demand. The fact that most of this oil came from the Middle East has caused concern among the country's economic experts who recently called for a national strategy on oil and gas. They wanted a two-pronged approach to diversify the source of energy imports and to reduce China's dependence on hydrocarbons to sustain its current levels of economic growth. In the late 1990s, China embarked on a strategy of buying overseas oilfields and shipping the crude back to the mainland, and now owns oilfields in Venezuela and Peru and has signed deals with Iraq and Kazakhstan to jointly develop their oilfields.

At present, coal and petroleum products remain the mainstay of the Chinese energy sector. According to International Energy Agency figures, in the mid-1990s coal accounted for about 62 per cent, and oil about 16 per cent of the primary energy supply. The share of natural gas in energy supply was only about two per cent. With the current focus on diversification of energy sources, the demand for gas is likely to increase. China's National Petroleum Corporation (CNPC) and the State Planning Commission are in the process of developing a national gas pipeline grid. The International Energy Agency and the U.S. Energy Information Administration have expressed reservations about an increase in the share of gas in China's primary energy mix. However, the discovery of the country's largest gas field warrants some rethinking on this account.

To ensure a smooth supply of energy to fuel rapid industrialisation and urbanisation is a major concern. The growing need for energy has made some foreign policy analysts apprehensive about the tactics China might adopt in ensuring energy security. This concern is regarding two main issues. First, China's policy towards disputed sites in the South China Sea including Taiwan, the Spratley Islands and Paracel Island. And, second, the security of the vital energy supply route through the South China Sea. Both these concerns are vital to the Asia-Pacific region's security. The modernisation of the Chinese navy is also looked at with concern both by the U.S. and other countries in the region.

The promotion of the "China Threat" theory by a section of the American academia and the U.S. Government links China's aggressive behaviour in solving inter-state disputes to its search for energy security, especially in the Asia-Pacific. China's rigid and aggressive stand towards Taiwan is quoted as an example of its willingness to use force in settling inter-state disputes. China maintains that Taiwan is a renegade province and that it retains the option to use force if the latter dares to declare independence.

However, a distinction needs to be made between China's inter-state dispute behaviour in cases where the question of national sovereignty is involved. The Chinese are very sensitive about the issue of national sovereignty and react strongly to any attempted or perceived infringement of it. This sensitiveness has increased after the U.S.-led NATO bombing of Kosovo in which the Chinese Embassy was bombed. China also sees growing U.S. unilateralism as a threat to the principle of national sovereignty and has appealed for a greater role for the United Nations in solving disputes across the globe.

It is simplistic to conjecture that China's aggressiveness on Taiwan will also be extended to its energy concerns in the South China Sea. First, China is not in a position to challenge the U.S. presence in the region. Rather, it stands to gain from it. A power vacuum created by a U.S. drawdown in the region will mean a competition between the various powers including China, Japan, Vietnam and South Korea for supremacy of the South China Sea. This is not a scenario that China can confidently hope to alter to its advantage. As long as U.S. naval presence in the region ensures the smooth flow of shipping traffic to and from this region, Beijing does not have an urgent need to use force to change things to its advantage. This has a direct bearing on how China chooses to resolve the Spratley Islands and Paracel Island disputes. The Spratleys are estimated to have large oil and gas reserves that the powers in the region are vying for. Today, China is the dominant player in the region and has used it to its advantage through a creeping occupation of islands and reefs. However, whether it chooses to adopt a confrontationist policy or a cooperative one, depends to a large extent on it perception of the U.S. involvement in any such conflict.

Despite these constraints on its power, is China willing to use force to push its own territorial and resource agenda in the South China Sea? Its foreign policy has in the past few years moved steadily towards a softer approach to resolving territorial issues.

With the exception of the Sino-Indian border issue, Beijing has settled all its outstanding land border disputes through dialogue. The Sino-Indian boundary issue too is not in any risk of a confrontation. China's maritime disputes are more fractious owing to their impact on its power projection capabilities. However, with the Chinese Government focussed on economic development and stability in the region, a military confrontation does not appear to be high on its list of priorities. For the moment, the immediate goal of a smooth supply of energy from the Middle East and lately eastern Russia and Central Asia, seems to dominate the need to project its power in the South China Sea.

(The writer is Research Scholar, Centre for East Asian Studies, JNU.)

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