Understanding China’s global energy strategy

Abstract

Purpose – As China’s economy has expanded, so has its need for energy. Consequently, China has increased its domestic energy capacities and developed import strategies for oil and gas. In its international energy activities, China has progressed through a series of stages. The purpose of this paper is to focus on China’s latest stage: creating an overland energy network, supplied primarily by Central Asia’s Kazakhstan, Turkmenistan and Uzbekistan, and becoming the energy hub of an integrated Asian market – China’s recent “Silk Road” proposal. This paper also examines the impact of Chinese energy investments on the prospects of Central Asian energy producers transitioning to emerging markets. Design/methodology/approach – The author delineate four stages of China’s international engagement and introduce the concept of the Chinese energy cooperation model: capital-intensive energy investments combined with the opening of local markets to Chinese goods. To assess the impact of this model on Central Asia, the author apply insights gained from analyzing the experience of resource-exporters in Latin America and Sub-Saharan Africa. Findings – The author findings are twofold: China has secured the energy resources of several Central Asian states for its “Silk Road” plan; and the Chinese energy cooperation model brings rapid growth, but has effects deleterious to the attainment of emerging market status. Originality/value – This paper contributes to the limited knowledge on China’s “Silk Road” plan and on China’s impact on resource-rich developing countries and is useful for researchers, academics and policymakers.