Energy independence helps reduce Sino-US confrontation risk

In the Long Cycles in World Politics Theory proposed in 1987, American geopolitics scholar George Modelski indicated that a war for world leadership would break out every 100 years.

China and America are today’s world leaders in terms of energy consumption, GDP, and influence.

With “peaceful rising” as its current development strategy, China hopes to address issues like market, energy, and environment. The breakthrough last year in shale gas exploitation technology and the commercialization of fuel oil by direct coal liquidation have made it possible for China to become energy independent. This will provide material support for China’s “peaceful rising,” reduce the risk of energy conflicts between China and the US, and remove the inevitability of both countries being involved in a confrontation.

China should cooperate with the US

Modelski divided world leadership into four stages: (1) the “world war” stage, when new world leaders emerged; (2) the “indisputable world leadership” stage, when the leaders created new international orders; (3) the “de-rationalization” stage, when the leaders’ authority was questioned but remained high; and (4) the “decentralization” stage, when the leaders’ authority declined, many new powers rose, and the leaders needed wars to rebuild their authority.

Following the collapse of the Soviet Union, China became the main “challenger” of the US. The article Century Cycle of International Politics and the Revelation to China, by Professor Shi Yinhong of the Department of Political Science of China Renmin University, published in 1995, caused wide attention and debates. Following Modelski’s theory, Professor Shi argued that all challengers in the past 500 years failed, new world leaders were usually “partners of the former hegemonic powers,” and the partners of challengers suffered setbacks. He suggested that China should choose to cooperate with the US following a “lift” strategy, instead of becoming the leader of the Third World or keeping isolated and maintaining a low profile.

China, however, cannot decide whether cooperating with the US will indeed give it a lift. Despite the cooperation between China and the US in various fields, it is impossible for the US to give up Japan, its traditional ally, during a conflict with China.

“Peaceful rising,” as proposed by former premier Wen Jiabao in 2003, remains the correct basic strategy. It means that China “shouldn’t and couldn’t rely on the other countries, must and can only do things by itself.” It also means that China should address energy and environment issues based on the domestic market and high technology. This strategy can be seen as an extension of the “keeping low profile” strategy and aims to reduce conflicts with other countries.

Energy independence is not out of reach

Basing economic development on imported energy is common in a globalized world, but it has serious repercussions for the big powers. According to the Realism School in International Relations, emerging big powers, driven by domestic demand for energy for economic development, tend to challenge the international system. Over the past decade, China’s petroleum foreign-trade dependence has kept increasing. China’s crude oil import was 2.92 million tons in 1990 with a foreign-trade dependence of 20.5%, and 240 million tons in 2010 with a foreign-trade dependence of 54.8%. Despite its rich coal reserves, China has been a net coal importer since 2009.

China’s natural gas production reached 101.9 billion cubic meters in 2011, a historic high. In the meantime, foreign-trade dependence rose to 24%, also a historic level. Experts estimate that, by 2020, China’s natural gas imports might reach 200 billion cubic meters with a foreign-trade dependence of 50%. China’s importing such a large amount of energy will inevitably affect the international political system.

Last April, the US Federal Energy Regulatory Commission issued the first LNG export license in 40 years, a sign of success for shale gas development. Cheniere Energy, an LNG exporter, recently announced an annual export volume of 200 tons of US-produced LNG, signalling that the US could attain energy independence by 2015.

Many analysts believe that the decision of the US to decrease its involvement in Middle East affairs is closely related to its energy independence. With less energy imports, the large American fleets can instead be used to block shipping lanes on oceans. This makes it even more necessary for China to achieve “energy independence.”

According to Royal Dutch Shell, China has 25.1 trillion cubic meters of recoverable shale gas reserves, ranking first in the world. On December 25, 2012, China National Petroleum Corp (CNPC) announced a breakthrough in key shale gas exploitation technology. It pointed out that China-produced shale gas had reached international standards in its class. CNPC also announced that its Southwest Oil & Gasfield Company had produced and sold 11.253 million cubic meters of shale gas by the end of November 2012. China Shenhua Group also announced last September the opening of the first coal-to-liquids (CTL) gas station, symbolizing the commercialization of CTL. All this shows that energy independence is no longer out of reach of the Chinese people.

Fewer conflicts and no wars

There are different causes of international conflicts. Samuel Phillips Huntington described the conflicts during the Cold War as ideological conflicts, and the ones in the Post-Cold War period as conflicts between civilizations.

Today, almost all wars and conflicts are somehow related to energy. International energy politics considers “petroleum as 10% of an economic issue and 90% of a political issue.” Scholars such as John J. Mear-sheimer of the University of Chicago argue that “survival was the primary motivation of the movements of big powers” and recommend suppressing China’s development. Since both China and the US have rich shale gas reserves and since domestic energy exploitation cost is much lower than the cost of launching a war, both countries will naturally try to minimize the causes of conflicts.

The Long Cycles theory is based on history after the Great Geographical Discovery. At that time, world leaders and challengers launched wars for the same demands, such as colonies, markets, resources, energy, or influence. Energy independence for China will create a new situation: for the first time in 500 years, neither the leader nor the challenger needs to extend its living space or prevent energy channel blocking.

Only time will tell if energy independence is indeed a way to prevent wars. If we take the long view, however, China’s current huge demand for energy might mean more time needed to realize complete energy independence, but the alternative of all-out war is not only expensive but disastrous.

China’s energy development in the last year has provided an expectable vision and credible evidence for “peaceful rising.”

LEE Yim

Officer with China Energy Fund Committee

China Onlooking, Hong Kong Economic Journal, March 23, 2013