As signified by its transition to become a net oil importer in 1993, China’s dependence on foreign countries for oil and natural gas has grown as a result of the increase in domestic energy demand accompanying its economic growth. Hence, for China, ensuring the stable supply of energy resources from overseas has become a national issue. China’s energy imports from overseas have also been increasing every year, as demonstrated by predictions that its dependence on foreign oil imports is expected to exceed 80% by 2030.Furthermore, against the backdrop of climate change issues and the major trend in the global energy sector toward decarbonization, China has also positioned the popularization of renewable energy as a point of focus in its policies. The government’s white paper on “Energy in China’s New Era,” published in December 2020, once again sets out the energy security slogan of the Xi Jinping administration— “Four Reforms and One Cooperation” —as a new strategy, and lay out the approach of further enhancing the energy policy in both domestic and diplomatic domains.
With a view to organizing the basic information for conducting an analysis of China’s energy diplomacy in this research project, this paper focuses on the hierarchical nature of China’s power structure and attempts to come up with a broad structure on the policy decision-making process of its energy diplomacy.
China’s energy diplomacy and the policy decision-making process
This paper focuses on the hierarchical nature of China’s policy decision-making process, while taking a broad view of this process in its energy diplomacy. The following sections focus on: (1) Politburo Standing Committee of the Communist Party of China (PSC); (2) Deliberation and coordination agencies of the Central Committee of the CPC (committees and small groups); (3) National Energy Commission (NEC); (4) National Development and Reform Commission (NDRC) and National Energy Administration (NEA).
1. Politburo Standing Committee of the Communist Party of China
The Politburo Standing Committee of the Communist Party of China (PSC) is positioned at the top of China’s policy decision-making processes. This Standing Committee engages in discussions on China’s domestic affairs as well as its overall foreign strategy. According to Zhou Qi from the Chinese Academy of Social Sciences, the PSC makes policy decisions on foreign policies in areas such as China’s relations with the United States, Russia, Japan, North Korea as well as Cross-Strait Relations, and arms control, the Shanghai Cooperation Organization (SCO), debt forgiveness for other countries, and China’s energy supply issues, among others.Discussions are held on energy issues in the context of foreign policy within the PSC, and an overall picture of energy diplomacy is expected to be formulated there. In addition, it is assumed that agenda related to energy diplomacy is drawn up from subordinate organizations of the Party and government, and that policy decisions are made by the PSC.
In particular, the destinations for overseas trips by members in the highest tier of leadership offers key information that is important to understanding the actual situation of energy diplomacy. It has been pointed out that there is a trend to prioritize the selection of oil producing countries as the destinations for overseas trips by top Chinese leaders, and energy diplomacy is said to occupy a central position in the overall foreign policy.Moreover, the three major petroleum companies of China own the rights to oil or natural gas in more than half of the foreign countries visited by Hu Jintao from January 2005 to August 2010. Based on the above, it is also likely that countries that are rich in energy resources will be selected as the destinations for overseas trips for Chinese leaders in the recent years. In this context, there is a need to conduct a quantitative analysis using data and other information.
Furthermore, while China has concluded partnerships (huoban guanxi) with many countries to date, it has been pointed out that these partners also tend to be energy supplier countries, or countries that Chinese state-owned companies have rights and interests in..
Another point that cannot be overlooked is the political battle over interests and power in the energy sector. In this regard, Zhou Yongkang, a former member of the PSC (2007–2012), is a familiar figure. Under the anti-corruption campaign implemented by Xi Jinping’s administration, there have been continued crackdowns on the “petroleum gang” (shiyou bang) led by Zhou.In addition to his background working for the China National Petroleum Corporation (CNPC), one of three leading Chinese state-owned petroleum companies, Zhou also played a leadership role in driving the development of oil fields in Sudan while holding a privileged position as a member of the PSC. In fact, he had been the person in control of China’s Sudan policies. Even after his arrest in 2014, CNPC continued to show its determination to make a clean sweep of forces such as Zhou. However, the loss of Zhou’s power does not signify that China has given up its interests in energy resources such as petroleum in Sudan and South Sudan, but rather, signifies its move to maintain those interests as a part of the Belt and Road Initiative (BRI). In September 2018, when President Omar Hassan Ahmad al-Bashir of Sudan visited China to participate in the Forum on China–Africa Cooperation, he held a meeting with the Chairman of the Board of CNPC, Wang Yilin. At the meeting, Wang expressed his expectations toward the promotion of further cooperation in the energy sector between the two countries and signed a memorandum of cooperation on oil and natural gas between CNPC and the Sudanese government. Currently, China is observed to be continuing to develop its energy diplomacy through state-owned corporations and other channels, while at the same time eliminating forces such as Zhou.
Considering the energy policy and its political importance, the PSC holds a leading position in the policy decision-making process in the area of energy diplomacy.
2. Deliberation and coordination agencies of the Central Committee of the CPC (committees, leading small groups, coordinating small groups)
As the energy issue is a policy issue that underpins economic development, it is likely to be viewed with the highest importance within the Central Committee of the CPC. Accordingly, it probably engages in energy diplomacy based on policy decisions made by the deliberation and coordination agencies of the Central Committee of the CPC.
The energy issue was on the agenda of the 6th meeting of the Central Leading Group for Financial and Economic Affairs held in June 2014, which took place it was elevated from its position as a leading group to that of Central Financial and Economic Affairs Commission in 2018. It was confirmed that State Councilor Yang Jiechi and Foreign Minister Wang Yi had been present at this meeting of the group, which is responsible for economic policies.Their attendance at this meeting is believed to reflect China’s stance, that energy issues are connected to foreign policies.
As China places importance on cooperation between countries for the energy sector in its foreign policy, it is believed that this issue would have been included in the agenda of the Central Foreign Affairs Commission (CFAC). For example, in a lecture delivered by Xi Jinping at the first meeting of the CFAC held in May 2018, he emphasized the significance of the BRI.Since the BRI emphasizes cooperation with other countries in the energy sector, it is expected that policy decisions-making related to energy diplomacy will be made within this Commission. Furthermore, Yang Jiechi, as Director of the General Office of the CFAC, made successive visits in October 2020 to Sri Lanka, the United Arab Emirates, Algeria, and Serbia. Responding to interviews with the Chinese media upon his return, Yang stated that all of these countries are of great importance to the BRI, and that China intends to steadily advance cooperation with these countries in the areas of infrastructure and energy. As I shall also touch on later, because energy is positioned as an important sector in the BRI in the context of foreign relations, the CFAC is an important organization in the policy decision-making process for energy diplomacy.
While it is difficult to clarify the actual situation with accuracy, it is expected that the respective committees and small groups under the Central Committee of the CPC deal widely with the energy issue as an agenda item that is related to the domestic and foreign situation.
3. National Energy Commission
The present-day National Energy Commission (NEC) was established in 2010.The purpose of its establishment under the State Council was to strengthen unified coordination and policy decision-making for energy strategies, and it is regarded as the energy agency of the highest standard in China. Its primary responsibilities are to research and formulate China’s energy development strategy, deliberate on important issues in energy security and energy development, and carry out the unified coordination of important matters related to domestic energy development and international cooperation in the energy sector. The Director of the General Office of the NEC concurrently chairs the National Development and Reform Commission, while the Deputy Director serves concurrently as the Director of the National Energy Administration.
Under Xi Jinping’s administration, we can confirm that the NEC has convened three meetings to date—in April 2014,November 2016, October 2019. A common thread running across all the meetings is the emphasis that Li Keqiang, who chairs the Commission, placed on the importance of energy in economic development and the significance of ensuring stable energy security, as well as the connection between energy issues and domestic and foreign affairs. During the meeting held in 2016, Li spoke about the BRI while appealing for the need to advance international cooperation in the energy sector, thereby showing that the agenda of the NEC could also be related to the approach to foreign relations.
With regard to the participants of the NEC, personnel are replaced as and when it is deemed appropriate, and the name list is then published. As for the connection with diplomatic relations, the Foreign Minister was included as the fifth member on the notices published in 2010 (Yang Jiechi),2013, and 2016 (Wang Yi) respectively.
However, looking at the participants of the Commission in 2018, changes have been made to the order of the names. Until that point, the Foreign Minister had been listed in fifth place followed by the Chairman of the National Development and Reform Commission; however, in the 2018 list of personnel, Wang Yi’s name had disappeared, and in his place was Le Yucheng, Vice Minister of Foreign Affairs at sixth place on the list. It is believed that Le was included as a member of the NEC in place of Wang because Wang had been appointed to the concurrent position of State Councilor. On the other hand, He Lifeng, who assumed position in 2017 as the Chairman of the National Development and Reform Commission, was positioned third after Li Keqiang and deputy Han Zheng.Regarding the significance of He Lifeng being in the third position, it is not inconceivable that this suggests that the National Development and Reform Commission influence within the NEC has grown.
There are many questions regarding what changes the personnel replacement in the NEC in 2018 have brought to China’s energy diplomacy. Nevertheless, there is a possibility that the National Development and Reform Commission is growing in importance as described next, and further, that these personnel changes are having an impact on the policy decision-making process for energy diplomacy.
4. National Development and Reform Commission and National Energy Administration
(1) National Development and Reform Commission
The National Development and Reform Commission (NDRC) is an organization that occupies an important position in China’s overall energy policy. The NDRC is a central agency that is mainly responsible for macroeconomic policies, and is even known as the most powerful agency within China’s administration because of its great influence and authority. The NDRC, under which the National Energy Administration (NEA) is managed, also wields great power in the area of energy administration.
In the decision-making process for the energy policy, which also constitutes a part of the economic policy, the NDRC is considered to be the most important organization. It holds great influence with regard to energy policy, and draws up plans on energy resource prices, investment outlets, bidding, and other matters from a long-term perspective. As the aforementioned General Office of the NEC is located within the NDRC, there are also those who hold the view that the NEC General Office comes under the jurisdiction of the NDRC.As an actor that is involved in the decision-making process for foreign policy, the NDRC has steadily strengthened its involvement in the energy sector. The NDRC, which places emphasis on energy security, is considered to have a significant role in the policy decision-making process concerning climate change countermeasures and access to oil and natural gas.
The importance of the NDRC is becoming increasingly prominent in the BRI that China is promoting. For example, the March 2015 document titled “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road” was jointly issued by the NDRC, Ministry of Foreign Affairs, and Ministry of Commerce in that order.Immediately after that in April, a panel discussion was held on this document at the China Center for International Economic Exchanges (CCIEE), a thinktank under the management of the NDRC. This discussion was also attended by Ou Xiaoli, Counsel for the NDRC’s Department of Western Region. Ou was introduced as one of the persons involved in the General Office of the Belt and Road Construction Leadership Group, as well as the main author who had drafted this document. The General Office of the Belt and Road Construction Leadership Group, which is expected to fulfill the role of a control tower managing the overall integrity of the strategy and coordinating the interests between numerous government organizations, is established as a part of the NDRC.
Personnel factors, specifically the promotion of He Lifeng to become the Chairman of the NDRC in 2017, are also considered to be related to the role of the NDRC in the BRI. He assumed position as the Vice Chairman of the NDRC in 2014, and was promoted to the chairmanship in 2017. During his time as the Vice Chairman, it had already been reported that he shall supervise the BRI,and it was pointed out then that he may play an even bigger role in the massive infrastructure project going forward. In fact, He is regarded by foreign observers to occupy a high position. For example, the signing of the “Cooperation Plan between the Government of the People’s Republic of China and the African Union on Jointly Promoting the Building of the Belt and Road Initiative” between China and the African Union (AU) was held in December 2020. During this ceremony, He, Chairman of the NDRC, was the official who signed the document jointly with Moussa Faki Mahamat, Chairperson of the African Union Commission. He’s promotion to Chairman of the NDRC in 2017 suggests that the NDRC is in a position to drive the BRI, which is also linked to Xi Jinping’s personal authority.
The energy sector is positioned at the core of the BRI, and the presence of the NDRC is prominent even in this respect. In May 2017, the Belt and Road Construction Leadership Group issued a document about the initiative. This document sets out the following seven priority sectors for the BRI: construction of infrastructure, trade, expansion of production capacity and investment, finance, protection of environment and ecology, maritime cooperation, and social exchanges. In particular, the construction of infrastructure in the field of energy touches on the relationship with Russia, Central Asia, Pakistan, and Southeast Asia, and clearly establishes a policy of actively promoting and advancing cooperation with the respective countries.During the same period, the NDRC and NEA issued the “Vision and Actions on Energy Cooperation in Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road” (hereafter, “Vision and Actions on Energy Cooperation” ), which emphasized that energy cooperation is at the heart of the BRI amidst an international situation of greater efforts to address the climate change issue and growing popularity of renewable energy. The publication of such a document jointly by the NDRC and its subordinate organization, the NEA, signifies the central role that the former occupies in international energy cooperation under the BRI.
The NDRC is also directly involved in the China-Pakistan Economic Corridor (CPEC) plan, which is related to the BRI. The Joint Cooperation Committee (JCC), which is the bilateral decision-making body for the CPEC, is chaired jointly by Pakistan’s Minister of Planning, Development and Special Initiatives and China’s Vice Chairman of the NDRC. For example, the 9th JCC was held in Islamabad in November 2019 was attended by NDRC Vice Chairman Ning Jizhe, who remarked that the CPEC has produced results, and expressed China’s intention to build an even stronger and closer “China-Pakistan Community of Shared Destiny” in the new era. Subcommittees in areas such as energy, transportation infrastructure, industrial cooperation, and the Gwadar Port were convened during this meeting, showing that the energy sector is an important agenda item for the CPEC. In addition to these, Ning also held talks with Prime Minister Imran Khan of Pakistan, signaling the growing presence of the NDRC overseas.
While the NDRC has until now been expected to attract attention in the context of domestic economic policy, its connection with the BRI has also strengthened its presence in the aspect of foreign policy.
(2) National Energy Administration
The National Energy Administration (NEA) comes under the auspices of the NDRC, which has numerous subordinate organizations under its jurisdiction. The role of the NEA is to formulate specific energy policies, regulate, plan, and conduct investigations.It is also considered to fulfill a role of a certain degree of importance in the area of foreign policy.
The head of the NEA was interviewed by the China Electric Power News, managed by the NEA, about the aforementioned Vision and Actions on Energy Cooperation drawn up in 2017. According to the interview article, cooperation in the energy sector occupies an important position in the BRI, and NEA has produced various results through collaboration with international organizations and its foreign government counterparts. While listing specific examples of cooperation with Pakistan, Russia, the United Kingdom, and other countries, he also explained that the NEA has steadily engaged in international cooperation in the energy sector from the aspect of policy. At the same time, he discussed the significance of creating the “Belt and Road Energy Cooperation Club” as a multilateral framework with countries that are supportive of China.
In April 2019, the Belt and Road Forum for International Cooperation, an international conference on the establishment of the Belt and Road Energy Partnership (BREP), was held in Beijing. Zhang Jianhua, Director of the NEA, delivered a speech at this conference, in which he spoke about the official establishment of partnerships for energy cooperation, as well as its significance in the BRI.A document covering the principles and implementation of energy cooperation, which was presented during this conference attended by participants from Asia, the Middle East, Africa, and other regions, contained items pertaining to energy security as one of the principles for cooperation. Of deep interest is the following text: “BREP respects and accommodates participating countries’ core interests and major concerns in energy security, and attaches great importance to the security of cross-border energy transmission pathways and transnational energy projects.” While it is unclear what the “core interests” in energy security refers to specifically, a provision that appears to seek to restrain efforts by a third country (possibly assumed to be the United States) to hinder international cooperation in energy transmission and the energy sector, can also be considered to be a reflection of China’s intention to link the BRI to its overall energy security policy.
When the white paper titled “Energy in China’s New Era,” mentioned at the start of this paper, was published in December 2020, a press conference was held by the State Council Information Office. This press conference was attended by Zhang Jianhua, member of the NDRC Party Group and Director of the NEA, and his role was to explain the main contents of this white paper. He was accompanied by the NDRC Secretary-General Zhao Chenxin, as well as the Director of Legal and Institutional Reform Office of the NEA, Zhu Ming. Zhang Jianhua appealed for the importance of the “Four Reforms and One Cooperation” energy strategy, and highlighted that China has been steadily advancing international cooperation in the energy sector under the BRI. Hence, the press conference was an opportunity for senior officials of the NEA to present an explanation of the contents of this white paper.Judging from this press conference, which was attended by senior NDRC officials and head of the NEA, the government white paper “Energy in China’s New Era,” emphasizing the “Four Reforms and One Cooperation” strategy that is also related to the BRI, was prepared by both of these organizations.
The decision-making and implementation of NDRC’s and NEA’s energy policy is considered to be a direct or indirect stipulation of China’s foreign relations. There is a need to pay close attention to the NDRC and NEA as organizations that determine the direction of China’s energy diplomacy, which forms a part of the BRI.
This paper has discussed the policy decision-making process for China’s energy diplomacy while focusing on the hierarchical nature of its power structure. While there is a need for a more detailed study, the NDRC, which plays a central role in the BRI that is also related to energy diplomacy, is becoming an increasingly important actor that has influence on foreign relations.
Attention will be given to other organizations involved in the policy decision-making process for energy diplomacy, which could not be covered in this paper, as a topic of discussion for the future.