Xi Jinping Initiated the Concept of Energy Community
Click:5852 Date:2016-02-17 10:40:00 Information Source:Learning Website for Cadres of China
In the opening year of "13th 5-year plan", at the critical time of economic transformation and upgrade of China, Chairman Xi Jinping made his first trip to three countries of Middle East, namely, Saudi Arabia, Egypt and Iran and initiated the idea of building a stable energy community. Xi Jinping pointed out in a signed article published on the media of Saudi Arabia, "Both sides should expand the trade volume and build a long-term and stable energy community." The new concept has not only confirmed the core objective of his trip, but also confirmed the new national strategy for energy cooperation in the "13th 5-year plan".
I. Best combination
The Middle East is the largest exporter of petroleum energy, while China is the largest importer of petroleum energy. China and Middle East nations have maintained a long history of cooperation and exchange. Therefore, China and Middle East are a natural best combination for an energy community. In the signed article published in Saudi Arabia, he vividly depicted the close partnership between China and Saudi Arabia and pointed out, "Among 6 barrels of crude oil imported by China, one barrel is from Saudi Arabia. Among every 7 Riyal of import income of Saudi Arabia, one Riyal is from China."
Since opening and reformation, with the rapid development of economy, China has a growing demand for energy. During the decade from 1980 to 1990, the total output of energy was higher than the total consumption volume in China. Since 1990, the total consumption of energy in China began to approach the total output. In 1996, the trade of crude oil and finished oil showed a negative value in 1996, making China completely a net importer of petroleum (with a net import of 13.95 million tons). Since the beginning of 21st century, after China joined WTO, its demand for energy has further grown. In 2000, the energy consumption of China was only half that of the US. Nine years later, China surpassed the US to be the largest energy consumer in the world. In recent years, China witnessed a rapid economic growth and a further increase in demand for energy. Viewed from energy consumption, each year the consumption of petroleum increased by above 22 million tons. According to the report of OPEC, in 2013, the daily consumption volume of petroleum in China was about 10.10 million barrels (accounting for 1/9 the total consumption of the world). In 2013, the consumption of natural gas in China reached 170 billion cubic meters. It's predicted that the number will further rise to 420 billion cubic meters by 2020. Viewed from energy import, in 2013, China surpassed the US to be the No. 1 petroleum importer in the world. In 2014, the petroleum import of China exceeded 300 million tons. It's predicted that by 2020, the petroleum import of China will reach around 420 million tons. By 2030, the petroleum import will reach around 600 million tons. Faced with such an abrupt growth of energy consumption, China can only rely on overseas markets. In June 2014, Xi Jinping pointed out on a session of central financial leadership, "China shall strengthen international cooperation in all areas and realize energy safety under open conditions. On the precondition of keeping the foothold at home, we should strengthen international cooperation in all aspects involving energy production and consumption so as to effectively utilize the international resources." Middle East can meet the energy demand of China.
Xi pointed out, "Middle East is a fertile land." It is rich in petroleum resources and is one of the petroleum valves of the world. In 2012, among the major petroleum producers in the Middle East, the remaining proved petroleum reserves of Saudi Arabia accounted for 21% that of the world, Iran accounted for 10.9%, Iraq accounted for 9.1%, the United Arab Emirates accounted for 7.8% and Kuwait accounted for 8.1%. The petroleum reserves of the gulf area were higher than the average level of the world by above 40 years. The Middle East countries occupied a large share in the international energy production. In 2012, the petroleum output of Middle East was 1.337 billion tons, accounting for 32.5% the total output of the world. The natural gas output of Middle East was also very abundant. In 2012, the natural gas output of Middle East was 548.4 billion cubic meters, accounting for 16.3% the total output of the world, ranked the third. Viewed from the international energy mechanism, except for Venezuela and Indonesia, the other members of OPEC are all Middle East nations. An important pillar for economic and social development of each petroleum and gas nation of Middle East is its petroleum and gas resources. For these countries, the critical issue is to find a stable, reliable, lasting and broad market for exporting their petroleum and gas and promote a flexible and sustainable energy development strategy that can enhance their advantages and avoid disadvantages. China is such a huge consumption market.
II. Constructing a new pattern
In recent years, since the production capacity and energy efficiency of the US, a large importer of petroleum energy has kept enhancing, its reliance on external energy has gradually dwindled, whereas China, the largest and fastest developing nation, has an increasing reliance on external energy. Therefore, the energy pattern of the world is undergoing a huge change. Now is the best time to overturn the old pattern and construction a new pattern. Therefore, the visit of Xi to Middle East nations aims to construct a stable energy community together, which will play a significant role in the construction of a new energy pattern of the world.
While other countries of the world have an increasing reliance on the import of crude oil and natural gas, the US, the largest consuming nation of energy in the world, is going in the opposite direction. Its import of crude oil will decrease rapidly and will soon become an exporting nation of natural gas. It's predicted that in the coming 20 years, the import of crude oil of the US will decrease from the present 10 million barrels per day on average to 4 million barrels. Of the decreased part, 55% will be offset by the domestic output growth of crude oil, while the remaining 45% will benefit from the enhancement of energy efficiency. This change will greatly strengthen the economic competitive edge of the US. With the abrupt decline of its import of crude oil, the reliance of the US on crude oil of Middle East will rapidly decline. The great enhancement of energy self-supply rate of the US will lead to a huge change of geopolitics, thereby affecting the future global safety policy.
With the sustainable economic development of China, energy safety has become a priority of priorities. For years, the energy production of China has been outpaced by growth of energy demand, which has given rise to a prominent contradiction of a poor energy structure and made China under a passive status in the energy pattern of the world. The gap between production and demand mainly concentrates in the relatively clean and efficient energies such as petroleum and natural gas. Its reliance on external crude oil had risen abruptly from 1.2% in 1996 to 58.6% in 2013, and its reliance on external natural gas had risen rapidly from 2% in 2008 to 30% in 2013. By 2015-2020, China will not only maintain its identity as the largest importer of crude oil in the world, but also might become the largest importer of natural gas in the world. By 2020, its import volume of crude oil and natural gas will respectively be as high as 450 million tons and 150-160 billion cubic meters. Currently China is under a period of fast industrialization and urbanization, its reliance on energy is far higher than developed countries for its economic and social development. Energy has become one of the crucial factors to determine the development of China, which is directly associated with the social and economic development, the improvement of living quality of Chinese people, the changes of climate and environment and the safety and interests of the nation. Considering the energy safety status of China, China must strengthen the status of Middle East in its global strategy, actively carry out energy diplomacy and shift from a passive state to an active state. The energy cooperation between China and Middle East is the key to guarantee the energy safety of China as well as the key to its sustainable development. Energy cooperation has become one of the most strategically important fields in the relationship between China and Arabian countries as well as an important cornerstone for a sustainable and steady development of their relationship. On the 6th minister level conference of the cooperation forum between China and Arabian countries convened in 2014, Chairman Xi Jinping suggested a "1+2+3" cooperation pattern, namely, taking energy cooperation as the main axis, taking infrastructure construction and facilitation of trade and investment as two wings and taking the three high-tech fields, nuclear energy, space satellite and new energy as new breakouts. Chinese government issued the first national policy document of China for Arabian countries to reiterate its advocate of the aforesaid cooperation pattern and suggested "promoting an upgrade of pragmatic cooperation".
Viewed from international situation, each country of Middle East is in an urgent need to construct an energy community with China. Though they are major producers of oil, they are under a passive status in the energy pattern of the world. In the area of partnership, since the reliance of the US on crude oil of Middle East has declined rapidly, meanwhile, the strategic focus of the US has shifted to the Asia-Pacific region and shrunk its strategic strength in Middle East, as a result of which the US did not hesitate to give up its long-term allies in the Middle East and had a distinctive split and difference of policies with countries like Saudi Arabia on the issues of Syria and Iran. Naturally it had prompted oil producer countries of Arabia like Saudi Arabia to try to reach more partners with a more promising market prospect. As to the production and pricing of petroleum, the status of OPEC has gradually declined. In the overall diplomacy of the US, the role played by the Middle East has changed. The energy demand of the US in the Middle East region has gradually shifted from meeting its own demand to controlling other countries. Therefore, the oil and gas resource countries of Arabia have paid more and more attention to establishing an all-round strategic partnership with China starting from the field of energy. As to handling of international disputes of the Middle East, Chinese government has posed to stress on fairness, justice and pragmatism since the Cold War and expressed support for the efforts of the international community for a peaceful settlement of hot issues of the Middle East. The Arabia world appreciated and praised the attitude of China to uphold justice in various international and regional issues and its determination and action to promote common development and safeguard the peace of the world. The Arabia world had a deep impression in the prestige and role of China in the international community, and the great achievements it made in the reform and opening up and was convinced that the market of China is set to be of a huge potential in the consumption of petroleum and gas and wished to establish a comprehensive cooperation relationship in the field of energy, which will involve each link of the entire industry, including exploration, development, refining and sales of oil and gas.
China and Middle East countries shall strengthen energy cooperation, jointly build an energy community, give up the old pattern and establish a new pattern so as to turn each party from a passive state to an active state and provide a new engine for development of each party. Xi Jinping pointed out in an important speech at the headquarters of the Alliance of Arabian Nations, "We need to promote a new cooperation model of "oil and gas+", explore the new cooperation potential, and construct a Sina-Arabia energy strategic relationship that is characterized by mutual benefits, safety and reliability and lasting friendship."
III. Strategic link
In handling domestic and international issues, Xi Jinping has not only displayed a strategic height, but also emphasized on implementation. Since the 18th Congress, he has creatively raised a new idea of strategic link for international development in the area of international cooperation, which has provided a new measure for the realization of international cooperation. It requires each nation in the region to fully link their development strategies in order to build a Sina-Middle East energy community and build an all-round fate community. Xi Jinping put forward the strategic conceptions of building "New Silk Road Economic Belt" and "21st Century Maritime Silk Road" in 2013. To some degree, these conceptions were put forward for each nation to link their strategies and build a fate community. On June 5, 2014, Xi pointed out on the opening ceremony of the minister level conference of the Sina-Arabia cooperation forum, "China is an old friend of Arabian countries in the Silk Road. We are natural partners in building the One Belt One Road."
The "One Belt One Road" has provided a best platform for the strategy link between China and Arabian countries. Firstly, it can make the traditional friendship between both sides bear new fruits. On June 5, 2014, Xi Jinping pointed out on the opening ceremony of the 6th minister level conference of the Sina-Arabia cooperation forum, "To jointly build One Belt One Road, China and Arabian countries should rely on and strengthen their traditional friendship." On January 21, Xi Jinping pointed out in an important speech at the headquarters of the Alliance of Arabian Nations, "In the history, Chinese people and Arabian people treat each other sincerely, have developed a deep friendship in the ancient Silk Road, and helped each other in the fight for national independence and building of the nations." Secondly, it can present a support and button for Sina-Arab community, especially the energy community. Xi remarked in a signed article published on the media of Egypt, "The One Belt One Road pursues common interests rather than tiny private interest. China has a vast market, abundant funds, advanced technologies, advantageous production capacity and has put forward development concepts of innovation, coordination, green, opening and sharing. Arabian countries are under a key stage of modernization and commonly take industrialization as an important choice for promoting development, improving people's livelihood and increasing jobs. By jointly building One Belt One Road, both sides can link their development strategies, deepen and expand their cooperation in the fields such as energy, trade and investment, infrastructure construction and high technologies. Egypt and other Arabian countries are welcomed to thumb a lift and take the fast train from the development of China, so that both sides can develop and grow together."
Chairman Xi Jinping has also made a top-level design for the strategy link of countries along the "One Belt One Road". In June 2014, Chairman Xi pointed out on the 6th minister level conference of the Sina-Arab cooperation forum, "To jointly build One Belt One Road, both sides need to aim high and be down-to-earth. Both sides shall make a good top-level design, plan the direction and target, and construct a cooperation pattern of '1+2+3'." In which, "1" means taking energy cooperation as the main axis, building a strategic partnership of energy that is characterized by mutual benefits, safety and reliability and lasting friendship. China shall scientifically, comprehensively and sustainably further deepen its energy cooperation with Arabian countries. The "One Belt One Road" strategy has solidified the foundation for the "diversified" energy cooperation between China and Arab and has become a strategic pivot for both sides to build the "One Belt One Road". On June 5, 2014, Xi remarked on the opening ceremony of the 6th minister level conference of Sina-Arab cooperation forum, "To jointly build One Belt One Road, both sides should stick to the principles of consultation, building and sharing." On January 21, Xi stressed in his speech at the headquarters of the Alliance of Arabian Nations, "In the construction of One Belt One Road, we advocate that different peoples and cultures should integrate with each other rather than repel each other. The policies of China on Middle East will start from the rights and wrongs of an issue and from the fundamental interests of the people of Middle East. We will not find an agent in the Middle East, instead we will persuade negotiation for peace; we will not mark out a sphere of influence, instead we will stimulate other countries to join our friendship circle of One Belt One Road; we will not strive to fill the 'vacuum', instead we will weave a network of win-win partnership."
Xi pointed out, "Now, China and Arabian countries are both under a key stage of development. Chinese people are fighting for building a comprehensive well-off society and realizing the great rejuvenation of China. The people of each Arabian country is also exploring the reform path and trying to realize national revival. The common development mission and ideal pursuit will tie both sides more closely and tightly." China and each country of Middle East will link their development strategies to build a community of energy and fate, which will expand new space and infuse new power into the development of both sides and will also add a safety valve for the peace and stability of the Middle East region.
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