The Geopolitics of Energy Cooperation in China’s Belt and Road Initiative

The Geopolitics of Energy Cooperation in China's Belt and Road Initiative

by Kaho Yu
November 2, 2017

This essay examines the factors, mechanisms, and implications of energy cooperation under China’s Belt and Road Initiative (BRI) and analyzes how the initiative could reshape the current international energy order.

EXECUTIVE SUMMARY

This essay examines the factors, mechanisms, and implications of energy cooperation under China’s Belt and Road Initiative (BRI) and analyzes how the initiative could reshape the current international energy order.

MAIN ARGUMENT

Unprecedented in size and scope, BRI promises approximately a trillion dollars in investments to resource-rich regions in Asia, Europe, and Africa. With its theme of interconnectivity, the implementation of the initiative is expected to prioritize infrastructure projects. Transnational energy cooperation, especially the massive development of energy infrastructure and improved market access, will be an important way for China to achieve its ambitious goals. Although BRI will facilitate energy cooperation, it would be wrong to assume that energy security is China’s primary aim; instead, energy cooperation is an important way of achieving the initiative’s higher-level objectives. BRI foresees a more multilateral engagement strategy from China, one that enables both domestic development and external influence and that eventually may have the potential to modify the current international energy order.

POLICY IMPLICATIONS
  • The U.S. should establish mechanisms to monitor and assess the progress of energy infrastructure projects. The U.S. should not assume that all energy projects in BRI are purely commercial or political but instead should analyze them on a case-by-case basis.
  • The U.S. should address areas where its businesses could benefit from BRI. Poor coordination in BRI has resulted in false expectations in the recipient countries, leaving room for the U.S. to carve out a role for itself in the initiative. The U.S. could offer “soft” support in infrastructure construction and should consider joining the Asian Infrastructure Investment Bank and exercising leadership in existing institutions, such as the Asian Development Bank and the World Bank, to coordinate on projects.
  • China has attempted to strengthen its maritime defense and logistics capacity by investing in ports along the BRI corridors. The U.S. should trace China’s new sea routes and port investments and find ways to cooperate with China’s navy in international partnerships and joint maritime operations.
  • With BRI, China may eventually determine the rules for energy trade and investment in Eurasia. The U.S. should maintain flexibility in adapting the existing international order to accommodate new energy powers.

Kaho Yu is an Associate with the Geopolitics of Energy Project in the Belfer Center for Science and International Affairs at the Harvard Kennedy School and an Assistant Lecturer in Global Studies at the Chinese University of Hong Kong.