Magazine article Foreign Affairs

Green Giant: Renewable Energy and Chinese Power

Magazine article Foreign Affairs

Green Giant: Renewable Energy and Chinese Power

Article excerpt

In 1997, in need of increasing oil and gas imports to fuel its accelerating economy, China launched a new energy policy. Intent on replicating Washington's close relationships with large oilproducing countries, its diplomats toured oil-state capitals, offering investment and arms in exchange for guaranteed supplies. Of particular interest were governments that had been ostracized by Western powers-an opening, Beijing believed, that would allow it to level the energy playing field with the United States and have the added benefit of fueling conflicts that would distract the U.S. military just as it was trying to refocus on Asia.

Yet many of China's forays turned out badly. New partners defaulted on loans and failed to deliver the promised oil. The practice of investing in dangerous places where others would not put the lives of Chinese workers at risk. At home, several leaders of large energy corporations have been purged in so-called anticorruption drives. Meanwhile, the United States has enjoyed a domestic energy boom that is rapidly turning it into a major exporter of oil and natural gas and cushioning its economy against oil-price shocks. Beijing has begun to worry that, given the United States' decreasing reliance on supplies from the Persian Gulf, Washington might intervene more slowly to quell disturbances in the Middle East that threaten to disrupt the flow of oil.

Accordingly, since assuming office in 2012, Chinese President Xi Jinping has turned to a new strategy: a pivot to renewable energy. China already dominates the global solar-panel market, but now it is expanding its support for oil-saving technologies, funding the development and production of everything from batteries to electric cars. The goal is not just to reduce China's dependence on foreign oil and gas but also to avoid putting the country at an economic disadvantage relative to the United States, which will see its own growth boosted by its exports of oil and gas to China. China's aims are also strategic. By taking the lead in green energy, Beijing hopes to make itself an energy exporter to rival the United States, offering other countries the opportunity to reduce their purchases of foreign oil and gas-and cut their carbon emissions in the process.

If Beijing's new energy strategy succeeds, it will help both the global fight against climate change and China's ambition to replace the United States as the most important player in many regional alliances and trading relationships. That ambition has been bolstered by the Trump administration's backward-looking approach to energy policy: its focus on coal, oil, and natural gas; its abandonment of the international organizations that shape global energy markets; and its rejection of the Paris climate accord. Such moves are helping pave the way for China to become the renewable energy superpower of the future. Washington needs to respond before it is too late.

OIL SHOCK

Beginning in the first decade of this century, breakneck economic growth in China created a need for foreign oil and gas, driving China's transformation from a regional power to a global one. Hampered by competition for resources from large Western oil companies, Beijing focused on so-called rogue states, where, because of Western sanctions, those rival companies could not invest. It first targeted Iran, Iraq, and Sudan, then Russia and Venezuela.

The results have been less than stellar. In Iran, Western and then un sanctions hindered Chinese efforts for several years by limiting the amount of money Chinese firms could spend in Iran. And even since the Iran nuclear deal relaxed sanctions, other problems have cropped up. In early 2016, for example, two Chinese national oil companies, Sinopec and the China National Petroleum Corporation, finally managed to get production moving at two fields in Iran's Khuzestan Province, but they now have to worry about Saudi-backed Arab separatists, who have recently bombed oil facilities there. …

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