China's increasingly prominent global energy role undoubtedly matters. One intriguing underlying question is whether it can reconcile its security and profitability goals.
Oystein Tunsjo, who has studied East Asian relations extensively, says that it can—by marrying government concern with commercial initiatives—in his new book, "Security and Profit in China's Energy Policy: Hedging Against Risk."
At a Dec. 3 discussion with other experts at the Brookings Institution, Tunsjo said, "Many countries have different views toward managing risk. China's reflect government concerns about supplies and companies' concerns with profits."
It's important to recognize distinctions between threats and risks, peacetime and wartime contingents, and pipeline and seaborne supply routes, Tunsjo said. Pipelines from Russia and Central Asia "are insurance for the government that also build trade relations with supply countries," he observed.
Building a state-owned tanker fleet, meanwhile, increases its naval strength, Tunsjo continued. "China has interests in protecting sea lanes," he said. "When we ask them to be responsible stakeholders, we're also letting them gain maritime experience for use in the East and South China Sea."
Bernard Cole, a retired US Navy captain who teaches at the National Defense University, said he prefers the term "coherence" to describe China's strategy.
"An affordable price hasn't been that important since China has often acted in irrational ways to secure energy resources," he said. "The government has increasingly assisted companies overseas because its domestic resources are waning." Coal and water issues' importance can't be overstated, he added.
Avoiding extremes
China's central leaders seem to be avoiding extremes, observed Robert Sutter, an international affairs professor at George Washington University. Extreme nationalist opinions about sovereignty and security complete with ideas that the country is part of an interdependent, international group, he said.
"Within this state-owned framework, the leadership has the flexibility to deal with questions about close international interactions," Sutter said. "Most important, there is no sense of crisis or defensiveness."
Erica S. Downs, a fellow in the John L. Thornton China Center at Brookings, noted, "The US and Canada have emerged as major destinations for Chinese oil investment. We don't hear as much now about their investments in Sudan and Iran, for example. Also, as major oil companies are selling their overseas interests to focus on North America, China is stepping forward. Canada—particularly the oil sands—and offshore Brazil have become investment destinations."
China also must protect its citizens by addressing environmental and other problems from its heavy reliance on coal, Tunsjo said. "Wind and solar are less than 1% of its energy mix," he noted. "I think there will be more nuclear and gas."