Contemporary Asia in the World. New York: Columbia University Press, 2013. xvi, 316 pp. (Maps.) US$45.00, cloth. ISBN 978-0-231-16508-2.
China’s quest for secure energy supplies has been a topic of great interest in policy, academic, journalistic and popular circles for some time. The country’s transition to net oil importer in 1993 raised the specter of an increasingly petroleum-thirsty China competing against the United States and other major oil importers for world oil supplies. Now, with the US Energy Information Administration reporting that China’s monthly petroleum and other liquid fuel imports have surpassed those of the US, policy makers in Beijing, Washington and elsewhere are keen to understand the economic and geopolitical implications of this new reality. Based on extensive interviews with energy experts and decision makers in China, Europe, Japan and the United States, Øystein Tunsjø argues that China’s economic and strategic considerations to securing petroleum supplies are self-reinforcing hedging mechanisms—complete with “short” and “long” bets—that seek to balance the needs for profitability and security.
Tunsjø distinguishes strategic approaches and market approaches to understanding China’s energy security (or, rather, China’s behaviours intended to reduce energy insecurity) and argues that scholarly analyses focusing on one or the other fail to fully explain how China actually behaves. He also regularly underscores the difference between managing risks and reducing threats and, relatedly, between wartime threats and peacetime risks. He argues that scholars writing on China’s energy security have thus far neglected these distinctions. Throughout the book Tunsjø writes of “Chinese decision makers,” including bureaucrats in party and government offices as well as leaders of major (state-owned) energy companies, as acting more or less in a coherent fashion throughout the book, while at the same time arguing that sometimes the pursuit of company profits conflicts with strategic interests of the state and vice versa.
Tunsjø’s key theoretical objective is to “explore how hedging and risk management can explain some of the complexity that is lost in the gap between the strategic and market approaches and thereby provide a more complete understanding of China’s energy security policy” (21). He offers several dichotomies as examples of hedging: “strategic partnerships but not alliances, military buildups but not arms races, and cooperation as well as assertive policies but not armed conflict” (22). Though the study’s primary focus is on petroleum, Tunsjø spends a good portion of chapter 2 detailing China’s overall energy mix, explaining how roughly 90 percent of the country’s energy needs are met with domestic production. At the time of writing, a Sino-Russian gas deal had been under discussion for roughly a decade; now, at the time of review (summer 2014), that deal has been struck, an economic and geopolitical boost for Russia given Western sanctions following Russia’s invasion of Ukraine’s Crimean Peninsula in February 2014.
Overall, the book is well written and carefully edited, barring occasional distractions such as non-standard usage (e.g., Export and Import Bank of China, or EIBC, instead of the more common China Exim Bank) and a tendency for passive constructions to appear en masse (“it is believed,” “it is expected,” it is acknowledged,” and “it is noted” all in the space of a few paragraphs (87–88). A missing “not” momentarily confounds: “The advocates of expanded Chinese naval power do show(sic) how expanded naval power will neutralize the US threat” (124, italics added).
Chapter 3 surveys China’s petroleum investments overseas, with special attention to Iran and Sudan, where the author finds an important distinction in countries where China’s national oil companies (NOCs) hold equity production rights (Sudan) or lack them (Iran). Tunsjø’s expertise in international security shines through in chapter 5, where he argues that China’s grand strategy has for decades been centred not on energy, but instead on Taiwan. He does allow that China’s pursuit of blue-water naval capabilities is at least partly motivated by the so-called Malacca Dilemma, though questions whether such pursuits may lead to a net reduction in China’s overall national security.
Tunsjø briefly examines government policies promoting energy efficiency, and curbing demand in the vehicle fuel sector, either through promotion of increased fuel economy standards for passenger vehicles or through promotion of alternative vehicles such as hybrid-electrics, is a vital piece of the China petroleum puzzle. As Tunsjø notes, although consumer-led petroleum demand represents a small fraction of China’s total energy mix, with the vast majority of primary energy and electricity consumed by heavy industry, the consumer fraction is projected to grow fastest in the future, barring a major shift in the dependence of mobility on petroleum. He reminds readers that in the event of a wartime event threatening seaborne transport of oil to China, the government would take immediate steps to curtail all non-strategic uses of petroleum and continue to meet a large fraction of remaining consumption using its own domestic sources or, when necessary, conscripting state-owned NOC tankers to do the dangerous work of repatriating overseas equity oil production or shipping oil through war zones.
Tunsjø draws heavily on the work of a few well-known experts in the global and China and energy literatures such as Kenneth Lieberthal, Daniel Yergin and Erica Downs, while admitting to consulting no Chinese-language sources (though he conducted numerous interviews with Chinese informants). In the end, his argument that “when China’s leaders sense uncertainty about whether a market or strategic approach—or what kind of mix of these two approaches—best enhances China’s interests, they will hedge their bets rather than choose one strategy at the obvious expense of another” seems fairly obvious (26). That “Chinese decision makers draw on both security and profit considerations to develop energy strategies” (89) acknowledges the pragmatism that Deng Xiaoping called “crossing the river by feeling for stones” and which shapes the approach China, a rising power with clear economic and political clout but limited power projection capability, must take to reduce energy insecurity. To this reviewer at least, the greater contribution of this study lies in Tunsjø’s clear and methodical account of “China’s” (including NOCs’) overseas petro-energy production behaviours and their drivers, rather than the hedging framework into which he seeks to fit those behaviours.
Darrin Magee
Hobart and William Smith Colleges, Geneva, USA
pp. 277-279