中國的能源政策與南南合作? 比較分析中巴及中阿能源政策。 - 政大學術集成

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(1)國立政治大學亞太研究英語博士學程 International Doctoral Program in Asia-Pacific Studies College of Social Sciences National Chengchi University. 博士論文 Ph.D. Dissertation. 立. 治政論文題目大 Topic. ‧ 國. 學. ‧. 中國的能源政策與南南合作 ? 比較分析中巴及中阿能源政策。 y. Nat. n. er. io. sit. China’s Energy Policy and South-South Cooperation? A Comparative Study between Sino-Brazilianaand Sino-Argentine Energy Policy l C 2000-2010 n i v U h. engchi. Student: Juan Uriburu Quintana 吳華安 Supervisor: Dr. Chung-Chian Teng 鄧中堅教授 Co–Supervisor: Dr. Ren-Rang Chyou 邱稔壤教授. 中華民國一百零三年二月 February 2014.

(2) 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. ii. i n U. v.

(3) 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. iii. i n U. v.

(4) Doctoral Dissertation Committee Members Dr. Sophia Hsiao-Yun Yu 余小云教授 Associate Professor – Graduate Institute of American Studies (GIAS) Chinese Culture University (CCU). Dr. I Yuan 袁易教授 Distinguished Research Fellow & Head – China Politics Division Institute of International Relations (IIR) Professor – National Chengchi University (NCCU) Adjunct Professor – National Taiwan University (NTU). 立. 政治大. ‧ 國. 學. Dr. Antonio C. Hsiang 向駿教授. Director – Center for Latin America Trade and Economy Studies (CEECAL) Associate Professor – Chihlee Institute of Technology (CIT). ‧. Dr. Tung-Chieh Tsai 蔡東杰教授. er. io. sit. y. Nat. Professor – Graduate Institute of International Politics (GIOIP) National Chung Hsing University (NCHU). Dr. Chung-chian Teng鄧中堅教授 (Supervisor). n. al. Ch. i n U. v. Professor – Department of Diplomacy College of International Affairs – National Chengchi University (NCCU). engchi. Prof. Ren-rang Chyou 邱稔壤教授 (Co-Supervisor) Director – Center for Latin American Studies (CLAS) Professor – Department of Diplomacy College of International Affairs – National Chengchi University (NCCU). iv.

(5) 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. v. i n U. v.

(6) 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. vi. i n U. v.

(7) 中國的能源政策與南南合作 ? 比較分析中巴及中阿能源政策。 China’s Energy Policy and South-South Cooperation? A Comparative Study between Sino-Brazilian and Sino-Argentine Energy Policy 2000-2010. 政治大. 國立政治大學亞太研究英語博士學程. 博士論文. 學. ‧ 國. 立. ‧. er. io. sit. y. Nat. A Ph.D. Dissertation Submitted to National Chengchi University In Partial Fulfillment of the Requirements for the Degree of a Doctor of Philosophy. n. iv l C n h e n g cStudent: 研究生 : 吳華安 h i U Juan Uriburu. Quintana. 指導教授 : 鄧中堅教授 Supervisor: Dr. Chung-Chian Teng 共同指導教授 : 邱稔壤教授 Co–Supervisor: Dr. Ren-Rang Chyou. 中華民國一百零三年二月 February 2014 vii.

(8) Acknowledgment As I approach Ithaka and this part of my long academic journey comes to an end, I would like to express my profound gratitude to all those who gave me the possibility to complete this dissertation. First, I am deeply indebted to my supervisor, Dr. Chung-chian Teng, and my cosupervisor, Dr. Ren-rang Chyou, for their support, guidance and prudent advice, and in particular for the precious time they generously gave me in spite of the multiple responsibilities respectively implied by that the deanship of the College of International Affairs (CIA) at National Chengchi University (NCCU) and the directorship of the University’s Department of Diplomacy. I deeply appreciate their help, patience and understanding, and their with different setbacks along the writing process.. 治政 Second, I would like to extend my sincere appreciation 大 to the members of my dissertation committee for their concern and support: Dr. Sophia Yu-hsiao Yu (Chinese 立 Culture University–CCU) made helpful critics and kindly gave me valuable feedback on ‧. ‧ 國. 學. my ideas, sharing with me pertinent observations and helpful suggestions; Dr. TungChieh Tsai (National Chung-Hsin University –NCHU) patiently witnessed how my research was progressing and made me keep my guard up; Dr. Antonio C. Hsiang (Chihlee Institute of Technology–CTI) shared with me numerous conferences and discussions, gave me a job and had the invaluable generosity of running with the expenses of our trips abroad; Dr. I Yuan (Institute of International Relations–IIR) taught me and guided me during the four years I worked for him at IIR, opened a million doors for me and generously let me go when Academia Sinica accepted my research project. I deeply thank them all for their criticism and for having raised the stakes for me. Without their help, I would not have been able to write this dissertation.. n. er. io. sit. y. Nat. al. i n U. v. I would also like to thank Dr. Lin Cheng-yi for all the academic freedom and valuable suggestions he kindly gave me during my time at Academia Sinica. I am particularly indebted to the Institute of European and American Studies (IEAS) for the Doctoral Fellowship I was granted and which allowed me to make substantial progress in my writing. I have benefited enormously from the abundant resources at its libraries, archives and databases. On top of that, a considerable part of this research was made possible by support from the National Science Council (NSC).. Ch. engchi. As regards the IDAS program, I am also indebted to Dr. Kuan Ping-yin and Dr. David Holm, and particularly to Ms. Angel Li, Ms. Angela Wu, Ms. Grace Tsao, Ms. Luz Lee, Ms. Ling-hui Huang and Mr. Ray Hsieh, for their support, efficiency and kind help with administrative issues. I benefited enormously from having the possibility of attending the classes taught by Dr. Chyungly Lee, Dr. Raviprasad Narayanan, Dr. Linjun Wu, Dr. Vincent Wang, Dr. Barry Fong and Dr. Yves Tiberghien, all of whom taught me how to achieve deeper levels of analysis through critical thinking.. viii.

(9) My thanks are also due to Dr. Ricardo O. Canzio for his generous help and challenging observations, as well as to Mrs. Juanita Liang Hsiang, Dr. Paco Chang and Mrs. Irene Liu for their friendship, kindness and support throughout all these years. I have a special debt of gratitude with Gerardo Quintana Augspurg, Dolores Condomí Alcorta, Dr. Vicente Solá, Dr. Gustavo Uriburu Solá, NP Susana Uriburu Bazán, Dr. Nicolás Arias Uriburu and Marta Saravia, Atty. Gonzalo Saravia Etchevehere, and to Ambassador Fernando Schmidt Ariztía and Ana Hernández Galilea. I am similarly indebted to my friends Dr. Lara Momesso, Roger Ching-huo Hung, Sita Lin, Ajith Somanath and Sarah Roehlig, Jenny Chuang and Jefri Yeh. My classmates and friends Sebastian Biba, Moises Lopes de Souza, Fernando Schmidt Hernández, Fabricio Fonseca Fernández, Milan Chen, José Luis Plata Díaz, Dr. Sabrina Habich, Dr. Yijen Shih, Janet Tan, Jasnea Sarma, Agata Fijalkowska, Sabrina Chia Jung Lee, Greg Coutaz, Kaja Kaluzynska, Philip Klotz, André Dejuste, Dharndhanate Hansuksakul and Wojtek Kusak. I would also like to mention my friends Parviz Kabirov and Dr. John Schmeidel. Mrs. Begoña Hui-ling Tsai and the staff of the Taipei Economic and Cultural Representative Office in Argentina also helped me enormously.. 立. 政治大. ‧. ‧ 國. 學. Of the many debts of gratitude in which I have incurred, the greatest is, most certainly, to my family. My mother, sister and brother have done for me more than they will never realize, and this dissertation could not have been finished without their unflagging support. I owe them more than I can express with words. Thus, it is both my honour and pleasure to dedicate this dissertation to my mother, María Quintana, my sister Amalia Uriburu Quintana, my brother Santiago Uriburu Quintana and to the dear memory of my grandmother, Fanny E. Tamayo Usandivaras de Quintana Augspurg, who was with us just long enough to see this dissertation finished. Juan Uriburu Quintana. n. er. io. sit. y. Nat. al. Ch. engchi. ix. i n U. v.

(10) 伊薩卡島當你啟程前往伊薩卡. 讓伊薩卡常在你心中，. 但願你的旅途漫長，. 抵達那裡是你此行的目的。. 充滿奇蹟，充滿發現。. 但路上不要過於匆促，最好多延長幾年，. 萊斯特律戈涅斯巨人，獨眼巨人，那時當你上得了島你也就老了，. 政治一路所得已經教你富甲四方，大你將不會在途中碰到諸如此類的怪物，立用不著伊薩卡來讓你財源滾滾。憤怒的波塞冬海神 — 不要怕他們 ,. ‧ 國. 學. 只要你高揚你的思想 …. 用伊薩卡賦予你如此神奇的旅行，. 但願你的旅途漫長。. ‧. 沒有它你可不會啟程前來。. 但願那裡有很多夏天的早晨，. 現在它再也沒有什麼可以給你的了。. Nat. y. 當你無比快樂和興奮地. sit. 而如果你發現它原來是這麼窮，. er. io. 進入你第一次見到的海港：. 那可不是伊薩卡想愚弄你。. n. al 但願你在腓尼基人的貿易市場停步購買 iv n Ch 精美的物件， e n g c既然那時你已經變得很聰慧， hi U 珍珠母和珊瑚，琥珀和黑檀，. 並且見多識廣，. 各式各樣銷魂的香水. 你也就不會不明白，. 你要多銷魂就有多銷魂：. 這些伊薩卡意味著什麼。. 願你走訪眾多埃及城市向那些有識之士討教並繼續討教。. 康斯坦丁· 卡瓦菲斯 1911 (來源：吳籽言的日誌). x.

(11) so full of experience, you will have understood, by then, what these Ithakas mean.. C. P. Cavafy, 1911.. Ιθάκη. Ithaka As you set out for Ithaka, hope that your journey is a long one, full of adventure, full of discovery. Laistrygonians and Cyclops, angry Poseidon—do not be afraid of them. You’ll never find things like that on your way, as long as you keep your thoughts raised high, as long as a rare sensation touches your spirit and your body. Laistrygonians and Cyclops, wild Poseidon—you won’t encounter them, unless you bring them along inside your soul, unless your soul sets them up in front of you.. Σα βγεις στον πηγαιμό για την Ιθάκη, να εύχεσαι νάναι μακρύς ο δρόμος, γεμάτος περιπέτειες, γεμάτος γνώσεις. Τους Λαιστρυγόνας και τους Κύκλωπας, τον θυμωμένο Ποσειδώνα μη φοβάσαι, τέτοια στον δρόμο σου ποτέ σου δεν θα βρεις, αν μέν’ η σκέψις σου υψηλή, αν εκλεκτή συγκίνησις το πνεύμα και το σώμα σου αγγίζει. Τους Λαιστρυγόνας και τους Κύκλωπας, τον άγριο Ποσειδώνα δεν θα συναντήσεις, αν δεν τους κουβανείς μες στην ψυχή σου, αν η ψυχή σου δεν τους στήνει εμπρός σου.. Hope that your journey is a long one. May there be many summer mornings when, with what pleasure, what joy, you come into harbours seen for the first time. May you stop at Phoenician trading stations to buy fine things, mother of pearl and coral, amber and ebony, sensual perfume of every kind—as many sensual perfumes as you can. And may you visit many Egyptian cities to learn, and learn again, from those who know.. Να εύχεσαι νάναι μακρύς ο δρόμος. Πολλά τα καλοκαιρινά πρωιά να είναι που με τι ευχαρίστησι, με τι χαρά θα μπαίνεις σε λιμένας πρωτοειδωμένους· να σταματήσεις σ’ εμπορεία Φοινικικά, και τες καλές πραγμάτειες ν’ αποκτήσεις, σεντέφια και κοράλλια, κεχριμπάρια κ’ έβενους,και ηδονικά μυρωδικά κάθε λογής, όσο μπορείς πιο άφθονα ηδονικά μυρωδικά· σε πόλεις Aιγυπτιακές πολλές να πας, να μάθεις και να μάθεις απ’ τους σπουδασμένους.. Keep Ithaka always in your mind. Arriving there is what you are destined for. But do not hurry the journey at all. Better if it lasts for years, so that you are old by the time you reach the island, wealthy with all you have gained on the way, not expecting Ithaka to make you rich.. Πάντα στον νου σου νάχεις την Ιθάκη. Το φθάσιμον εκεί είν’ ο προορισμός σου. Aλλά μη βιάζεις το ταξείδι διόλου. Καλλίτερα χρόνια πολλά να διαρκέσει· και γέρος πια ν’ αράξεις στο νησί, πλούσιος με όσα κέρδισες στον δρόμο, μη προσδοκώντας πλούτη να σε δώσει η Ιθάκη.. Ithaka gave you the marvelous journey. Without her, you would not have set out. She has nothing left to give you now.. Η Ιθάκη σ’ έδωσε τ’ ωραίο ταξείδι. Χωρίς αυτήν δεν θάβγαινες στον δρόμο. Άλλα δεν έχει να σε δώσει πια.. And if you find her poor, Ithaka won’t have fooled you. Wise as you will have become,. Κι αν πτωχική την βρεις, η Ιθάκη δεν σε γέλασε.. 學. y. sit. io. n. Ch. er. Nat. al. ‧. ‧ 國. 立. 政治大. engchi. 5. i n U. v.

(12) Έτσι σοφός που έγινες, με τόση πείρα, ήδη θα το κατάλαβες η Ιθάκες τι σημαίνουν.. Κ. Π. Καβάφη, 1911.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 6. i n U. v.

(13) 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. xii. i n U. v.

(14) Abstract This dissertation studies China’s energy policy since the “Go Out” strategy became the PRC’s “overarching national strategy”, having been put forward for the first time in the 5th Plenum of the 15th CPC Central Committee in October 2000 –despite having been de facto implemented since 1993. It focuses on the evolution of the PRC’s petroleum and biofuels policy from 2000 to 2010 and on the impact it has had on Brazilian and Argentine energy policy and exports of energy resources to China. The study adopts an asymmetrical interdependent perspective within a South-South Cooperation analytical framework to argue that the role these countries have played as suppliers of fossil energy resources (petroleum) to the PRC throughout the observed period –role that can be defined as having been relatively modest in spite of having ranked as China’s top South American oil suppliers for most of it– has considerable potential to become significantly more relevant in the future, through the diversification of their energy exports to China based on the combination of fossil fuels and renewable energy resources (biofuels). As regards the former, the study highlights the game-changing discovery of enormous ultra deep-water off-shore reserves in Brazil in 2007 and 2010 (Tupi-Lula and Libra, respectively, which are already turning Brazil into a major oil exporter) and of the gigantic shale energy formation of Vaca Muerta in Argentina in 2010. Regarding the latter, both Brazil and Argentina are leading producers and exporters of biofuels (sugar canebased ethanol and soybean-based biodiesel, respectively). The remarkable progress that the PRC has made in the energy sectors of the analyzed countries –and in Latin America in general, showing the “asymmetry of attention” paid by China and the USA to the region is emphasized. The research highlights the increasing importance that renewable energy resources are having in Chinese energy policy, due to both energy security and environmental concerns. It argues that the addition of clean energy resources to their exports to the PRC would benefit Brazil and Argentina by allowing them to diversify not only their export baskets (by adding more products to their exports to China, with the plus that these would have value added) and export destinations (adding the growing Chinese market while simultaneously reducing these countries’ dependence on traditional biofuel destinations such as the EU and the USA), but would also have positive effects for China’s fuel supply mix, contributing to make China’s transition to a low-carbon economy (or, at least, lower-carbon) shorter – as well as positive spillovers in their industrial structures.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. xiii. i n U. v.

(15) 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. xiv. i n U. v.

(16) Table of Contents Acknowledgment _____________________________________________________ viii Ithaka _______________________________________________________________ ix Table of Contents _____________________________________________________ xv Chapter 1 – China’s Energy Policy and South-South Cooperation 1.1. Problem Statement and Research Significance _______________________ 1 1.1.1. Context: South-South Cooperation ______________________________ 12 1.1.2. Historical Context and Chronology ______________________________15 1.1.3. South-South High Technology and Energy Cooperation______________17 1.1.4. Different Dimensions of SSC in Sino-Latin American Relations_______ 23 1.2. Literature Review_______________________________________________ 36 1.2.1 Literature on General Sino-Latin American Relations ________________38 1.2.1.1. Complementarity_____________________________________39 1.2.1.2. China’s Model of Economic Development as an Alternative___42 1.2.1.3. Diplomatic and Political Aspects_________________________43 1.2.2 Literature on Energy in Sino-Latin American Relations_______________44 1.2.2.1. China’s Reliance on Imported Energy_____________________45 1.2.1.2. NOCs: Domestic Constraints and Global Expansion, Economic Growth, Environmental Sustainability & Renewable Energy___46 1.2.1.3. Latin American Perspectives___________________________ 53 1.3. Research Questions and Main Hypotheses___________________________ 58 1.4. Variables and Methodology _______________________________________60 1.5. Dissertation’s Outline ____________________________________________63. 立. 政治大. ‧. ‧ 國. 學. Nat. y. sit. n. al. er. io. Chapter 2 – Complex Interdependence as Theoretical Foundation 2.1. “Complex Interdependence”______________________________________ 67 2.1.1. Concepts___________________________________________________ 82 2.1.2. Power ____________________________________________________ 83 2.1.3. Asymmetry _________________________________________________87 2.1.4. Interdependence _____________________________________________90 2.1.4.1. CID and Interconnectedness ________________________________ 91 2.1.4.2.Joint Gains vs. Relative Gains _______________________________ 92 2.1.4.3. Dimensions of ID: Sensitivity and Vulnerability _________________92 2.2. Compensating Unfavourable Asymmetrical Interdependence __________ 96 2.2.1. Bargaining__________________________________________________ 97 2.2.1.1 Bargaining within a Producer-Consumer scheme _______________ 102 2.2.1.2 Bargaining: Importance of Soybeans vs Petroleum______________ 104 2.2.1.3 Soybeans as Foodstuffs ___________________________________ 107 2.2.1.4 Soybeans as Energy Crops _________________________________109 2.2.1.5 Benefits of Biodiesel for China______________________________111 2.2.2. Issue Linkages______________________________________________114 2.2.3. Diversification _____________________________________________ 115 2.3. Empirical Cases: _______________________________________________117 2.3.1. Embargoes as Restrictions to Trade_____________________________ 120 2.3.2. The 2004 Chinese Embargo to Brazil __________________________121. Ch. engchi. xv. i n U. v.

(17) 2.3.2.1 Historical Context ________________________________ 121 2.3.2.2 Precedents ______________________________________ 122 2.3.2.3 Motives_________________________________________122 2.3.2.4 Reaction of Brazil ________________________________ 123 2.3.2.5 Delegations _____________________________________ 124 2.3.2.6 Consequences ___________________________________ 126 2.3.3. The 2010 Chinese Embargo to Argentina___________________127 2.3.2.1. Historical Context________________________________ 127 2.3.2.2. Precedents _____________________________________ 129 2.3.2.3. Motives________________________________________ 132 2.3.2.4. Costs __________________________________________ 135 2.3.2.5. Presidential Apologies and Rising Tensions ___________ 136 2.3.2.6. New Antidumping Measures and Delegations __________138 2.3.2.7.Alternative Sources _______________________________ 139 2.3.2.8. State Visit ______________________________________ 141 2.3.2.9. Indications of a Solution ___________________________142 2.4 Concluding Remarks ____________________________________________ 144. 立. 政治大. ‧. ‧ 國. 學. Chapter 3 – China’s Energy Policy 3.1. China’s Energy Policy Overview: from Petroleum Self-Sufficiency to Import Dependence ______________________________________________ 147 3.2. Main Actors in China’s Energy Sector: from “Governance” to “Co-Governance”________________________________________________154 3.2.1. Asymmetric Power Distribution and Conflict of Interests____________155 3.2.2. Governmental Agencies ______________________________________156 3.2.3. China's National Oil Companies: the NOCs ______________________ 162 3.2.4. International Expansion of the NOCs ___________________________ 164 3.2.5. Government and NOCs Objectives _____________________________ 169 3.2.6. Challenges to NOCs’ Competitiveness __________________________ 171 3.2.7. Overview of the NOCs _______________________________________175 3.2.8. CNPC (中國石油天然氣集團公司)____________________________ 176 3.2.9. Sinopec (中國石油化工集團公司)_____________________________ 179 3.2.10. CNOOC ( 中國海洋石油總公司 )______________________________180 3.3. Energy Policy in China: Petroleum and Biofuels _____________________181 3.3.1. The “Go Out” Strategy (1993-2000)_____________________________183 3.3.2. The 10th Five-Year Plan (2001-2005) ___________________________ 185 3.3.3. The “Special Energy Plan” (2000) ______________________________186 3.3.4. “China’s Petroleum Strategies for the 21st century” (2002)___________187 3.3.5. The “Nine-Point Strategy” (2003) _____________________________ 189 3.3.6. The 11th Five-Year Plan (2006-2010) ___________________________ 190 3.3.7. The “new energy security concept” (2006) _______________________193 3.3.8. White Paper on China’s Energy Conditions and Policies (2007) ______ 193 3.3.9. Policy Paper on Latin America (2008) __________________________ 195 3.3.10. Energy Policy Paper (2012) __________________________________195. n. er. io. sit. y. Nat. al. Ch. engchi. xvi. i n U. v.

(18) 3.3.11. China’s Biofuels Policy _____________________________________196 3.4. Chronological Analysis 2000-2010 ________________________________ 205 3.5. Concluding Remarks ___________________________________________ 237 Chapter 4 – Sino-Brazilian Energy Policy 4.1. Introduction___________________________________________________ 241 4.2. Sino-Brazilian Relations and South-South Cooperation_______________ 243 4.3. Brazil’s Energy Sector: Actors and Policy__________________________ 250 4.3.1. Petrobras__________________________________________________250 4.3.2. Petrobras and Biofuels _______________________________________257 4.3.3. Ethanol___________________________________________________ 258 4.3.4. Petrobras Biocombustível_____________________________________260 4.3.5. Biodiesel__________________________________________________262 4.3.6. National Petroleum, Natural Gas and Biofuels Agency (ANP)________265 4.3.7. National Council of Energy Policy (CNPE) ______________________266 4.3.8. Ministry of Mines and Energy (MME) __________________________266 4.4. Chronological Analysis _________________________________________267 4.5. Concluding Remarks __________________________________________ 297. 立. 政治大. ‧. ‧ 國. 學. Chapter 5 – Sino-Argentine Energy Policy 5.1. Introduction___________________________________________________301 5.2. Brief Overview of Sino-Argentine Relations ________________________306 5.3. Argentina’s Energy Sector: Actors and Policy______________________ 311 5.3.1. Ministry of Federal Planning and the Secretary of Energy ___________311 5.3.2. YPF _____________________________________________________ 314 5.3.3. ENARSA_________________________________________________ 319 5.3.4. Private Oil Companies_______________________________________ 320 5.3.5. Joint Ventures Chinese NOCs- Private Oil Companies in Argentina___ 321 5.3.6. The Argentine Biofuels Sector: Actors and Policies _______________ 322 5.4. Chronological Analysis _________________________________________327 5.5. Concluding Remarks __________________________________________ 363. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Chapter 6 – US Reactions to Chinese Involvement in Brazil’s and Argentina’s Energy Sectors 6.1. Introduction___________________________________________________369 6.2. Overview of US and Chinese Approaches to Brazil and Argentina _____ 373 6.2.1. Asymmetry of Attention as reflected in Ambassadorial Attention______373 a) American Ambassadors to China, to Brazil and to Argentina ______374 b) Chinese Ambassadors to the US, to Brazil and to Argentina_______376 6.2.2. Asymmetry of Attention as reflected in Presidential Visits___________ 378 a) Brazilian Presidential Visits to the US (2000-2010)_____________ 387 b) Argentine Presidential Visits to the US (2000-2010)_____________388 6.3. Chronological Analysis of Brazil and Argentina as Energy Suppliers to the US _____________________________________________________ 390 6.3.1. Brazil as a Petroleum Supplier to China and the US ________________395 6.3.2. Argentina as a Petroleum Supplier to China and the US_____________ 396 6.4. Concluding Remarks __________________________________________ 397. xvii.

(19) Chapter 7 – Conclusion 7.1. Conclusion___________________________________________________ 401 Tables and Figures Tables Table 2.1– China’s Top 10 Trading Partners (Exports and Imports) 2010_________________________ 70 Table 2.2– Brazil’s Top 5 Trading Partners: China’s Ascendance to Top Export Destination__________ 71 Table 2.3– Argentina’s Top 5 Trading Partners: China’s Ascendance to 2nd largest Export Destination __ 73 Table 2.4– Modest Relevance of Brazil and Argentina in China’s Total Trade _____________________ 74 Table 2.5– Economic Asymmetry between China, Brazil and Argentina Five Indicators______________78 Table 2.6– China’s Total Petroleum Imports: Relevance of Brazil and Argentina as Oil Suppliers ______99 Table 2.7– China’s Total Soybeans Imports: Relevance of Brazil and Argentina as Soybean Suppliers__101 Table 2.8– Soybeans in Brazil and Argentina Total Exports to China ____________________________102 Table 2.9– Brazil: Percentage of Petroleum, Soybeans and Soybean Oil exported to China___________104 Table 2.10– Argentina: Percentage of Petroleum, Soybeans and Soybean Oil exported to China_______105 Table 2.11– Comparative Analysis of the Chinese Embargoes to Brazil (2004) and Argentina (2010)__ 143 Table 3.1– Crude Oil Price per Barrel 2000-2010 (US$) ______________________________________153 Table 3.2– Specific Energy Indicators ____________________________________________________ 191 Table 6.1– US Ambassadors to Brazil 2000-2010___________________________________________ 375 Table 6.2– US Ambassadors to Argentina 2000-2010________________________________________ 376 Table 6.3– PRC Ambassadors to Brazil 2000-2010__________________________________________ 377 Table 6.4– PRC Ambassadors to Argentina 2000-2010_______________________________________ 377 Table 6.5– Visits by Chinese and American Presidents to Brazil and Argentina 2000-2010___________379 Table 6.6– Brazilian Presidential Visits to the US 2000-2010__________________________________ 387 Table 6.7– Argentine Presidential Visits to the US 2000-2010_________________________________ 389 Table 6.8– USA Total Petroleum Imports (% that the US gets from Brazil and Argentina)___________ 391. 立. 政治大. ‧ 國. 學. ‧. Figures Figure 1.1– Variables__________________________________________________________________ 61 Figure 2.1– Brazil’s Top 5 Trading Partners: China’s Ascendance to Top Export Destination _________ 71 Figure 2.2– Argentina’s Top 5 Trading Partners: China’s Ascendance to 2nd largest Export Destination__72 Figure 2.3– Brazil: Percentage of Petroleum, Soybeans and Soybean Oil exported to China__________ 105 Figure 2.4– Argentina: Percentage of Petroleum, Soybeans and Soybean Oil exported to China _______107 Figure 2.5– Argentina: Percentage of Petroleum exported to China 2000-2003____________________ 107 Figure 2.6– Argentina: Percentage of Soybeans exported to China 2000-2003_____________________ 107. n. er. io. sit. y. Nat. al. i n U. v. Figure 3.1– Evolution of Oil Price: US$ per barrel, 2000-2010_________________________________153 Figure 3.2– Main Actors in China’s Energy Sector – Governmental Agencies and NOCs ____________157 Figure 3.3– China’s Oil Imports from Brazil and Argentina 2000-2010__________________________ 205 Figure 3.4– Percentage (%) of Oil in Brazil’s and Argentina’s Total Exports to China_______________206 Figure 3.5– China’s Top 3 Oil Suppliers in Latin America (2000-2010) _________________________ 239. Ch. engchi. Figure 4.1– Evolution of China’s Petroleum Imports from Argentina 2000-2010 _________________268 Figure 5.1– Argentina's Biodiesel Production and Exports 2007-2011___________________________ 323 Figure 5.2– Percentage of China’s Petroleum Imports from Argentina 2000-2010 __________________327 Figure 6.1– USA Total Petroleum Imports from Brazil and Argentina (%)_______________________ 390 Figure 6.2– Value of Brazil’s Oil Exports to China and the US 2000-2010 _______________________ 396 Figure 6.3– Value of Argentina’s Oil Exports to China and the US 2000-2010 ____________________ 396 Bibliography _______________________________________________________________________ 417 Newspapers and Magazines ___________________________________________________________434 Acronyms and Abbreviations_________________________________________________________ 435 List of Interviews conducted in China, Brazil and Argentina (2012-2013) _____________________423 Maps Maps of Brazilian Offshore Oilfields_____________________________________________________ 425 Maps of Argentine Shale Oil and Gas Formation___________________________________________ 427. xviii.

(20) Annex I –Policy Paper on Latin America (November 2008) __________________________________ 428 Annex II–White Paper on Energy Policy (October 2012) ____________________________________ 435. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. xix. i n U. v.

(21) Chapter 1 China’s Energy Policy and South-South Cooperation?. Chapter 1 – China’s Energy Policy and South-South Cooperation? 1.1.– Introduction – Problem Statement and Research Significance Energy is essential for a country’s economic activity, development and growth, since there can be “no prosperity without energy.” 1 As famously pointed out by Schumacher, “there is no substitute for energy, the whole edifice of modern life is built upon it. Although energy can be bought and sold like any other commodity, it is not ‘just another commodity’, but the precondition of all commodities, a basic factor equally with air, water, and earth.” 2 Indeed, and according to Wei et al., “energy, just like labor and capital, is universally acknowledged to be the fundamental factor and strategic resource of an industrial society.” 3. 政治大. The present research notes that, in the case of the PRC, the crucial role that energy plays becomes even more critical, not only because the economic growth of China –the world’s second largest economy and top energy consumer– depends on it, but also due to the fact that, for the Chinese government, “delivering growth is a political – rather than economic– proposition” 4, as noted by Kong. According to this author, in the PRC, “economic growth has become the primary legitimizer and stabilizer of the Chinese political system” 5, with the recognition, by the PRC government, that China’s “energy security” –“the availability of energy at all times, in various forms, in sufficient quantities, and at affordable prices” 6 – is “an important part of China’s economic security.” 7 Therefore, it is vital for the Chinese government to secure access to stable and reliable energy sources, in order to minimize the risks of disruptions in energy supplies that could threaten the growth of the Chinese economy and the country’s stability.. 立. ‧. ‧ 國. 學. sit. y. Nat. n. al. er. io. Under these circumstances, the fact that in 1993 the PRC ceased to be energy selfsufficient –oil self-sufficiency had been achieved in the early 1960s and maintained for three decades, until domestic production was surpassed by consumption in the early. Ch. engchi. 1. i n U. v. Please refer to Josef Auer, Energy Prospects after the Petroleum Age (Frankfurt: Deutsche Bank, 2004): 4. Remarks by E.F. Schumacher, Chief Economic Advisor to the UK National Coal Board, as quoted by D. Yergin, The Prize: the Epic quest for Oil, Money & Power (New York: Simon & Schuster, 1992), as cited in R.D. Herbig, “Recent Development: Technical and Legal Considerations for Bio-Fuels”, in Environmental & Energy Law & Policy Journal 343 (2007-2008): 343-355. 3 Yi-Ming Wei, Ying Fan, Zhi-Yong Han, Gang Wu, Energy economics: Modeling and Empirical Analysis in China (Boca Raton, FL: CRC Press, Science Press 2010): xi. 4 See Bo Kong, China’s International Petroleum Policy (Santa Barbara, CA: Praeger, 2010): 141. 5 Ibid. 6 United Nations Development Programme World Energy Assessment, Energy and the Challenge of Sustainability (New York: UNDP, 2000): 11. http://www.undp.org/content/dam/aplaws/publication/en/publications/environment-ene1rgy/www-eelibrary/sustainable-energy/world-energy-assessment-energy-and-the-challenge-ofsustainability/World%20Energy%20Assessment-2000.pdf (accessed April 26, 2009). See also Philip Andrews-Speed, Xuanli Liao and Roland Dannreuther, The Strategic Implications of China’s Energy Needs, (New York: Oxford University Press, 2002): 13. 7 Kong, China’s International Petroleum Policy, 48. 2. 1.

(22) Chapter 1 China’s Energy Policy and South-South Cooperation?. 1990s– implied a worrisome and extraordinarily significant change in China’s energy balance, turning the country into a net importer of oil. Later, it would also need to start importing other energy resources (such as coal, in the late 2000s). In this regard, it has been noted by Andrews-Speed et al. that the PRC’s growing dependence on imported energy mainly threats China’s own domestic social and political stability 8, rather than representing a menace to others. Along the same lines, it has been pointed out by Yao that “Faced with huge demand for oil, China fears a sudden interruption in supply, which would hit economic development, China's foreign relations, and the legitimacy of the ruling Chinese Communist Party.” 9 It is evident, then, that the year 1993 was a critical juncture in China’s energy security policy. At the time of writing, three and a half decades have passed since the market driven economic reforms proposed by Deng Xiaoping (邓小平, or 鄧小平) were implemented, and two decades since China became a net oil importer.. 政治大. With regard to these reforms, known as the “Open Door” policy, it has been pointed out by Friedman that “Deng found that a once-world power China impoverished itself, starting in the Ming Dynasty, by closing its doors and eyes… Deng therefore saw long distance exchange as a road back to glorious China.” 10 This “long distance exchange” was to be reflected in the “Going Out” strategy (「走出去」战略 , or 戰略), proposed by Wang Tao (王涛, or王濤) 11 –by then, general manager of China National Petroleum Corporation (CNPC, 中国石油天然气集团公司, or 中國石油天然氣集團公司, the PRC’s largest oil and gas producer and supplier) 12, consisted on looking “for petroleum resources abroad in order to be able to satisfy demand at home” 13 – implemented since 1993 and officially adopted as China’s “overarching national strategy” in 2000, 14 when it was put forward, for the first time, in the 5th Plenum of the. 立. ‧. ‧ 國. 學. er. io. sit. y. Nat. al. n. iv n C h e of China’s Andrews-Speed et al., The Strategic Implications 10. i UforNeeds, c hEnergy Yuanming Alvin Yao,“China ’s Oil Strategy andnItsgImplications U.S.-China Relations,” in Issues &. 8 9. Studies 42, no. 3 (September 2006): 167. 10 In this regard, E. Friedman has noted that “the emergence of a Deng’s era committed to openness to the world and China’s subsequent extraordinary rise… together with the relative weakening of Europe and North America… [are some] of the most significant transformations of our era.” See: Edward Friedman, “The State of the State of Knowledge about the Chinese State,” Keynote Speech at the “IPSAS International Conference on Governance with Chinese Characteristics: Is State Still in Charge?”, Institute of Political Science, Academia Sinica, Taipei, November 20-21, 2010. 11 “China Vitæ: Wang Tao” – China Vitæ http://www.chinavitae.com/biography/Wang_Tao|548 (accessed May 5, 2011). 12 “About CNPC” – China National Petroleum Corporation (CNPC) website http://www.cnpc.com.cn/en/aboutcnpc/ (accessed April 2, 2011). 13 Kong, China’s International Petroleum Policy, 41. 14 “The Outline of the 10th 5-Year Plan of the PRC for National Economic and Social Development (國民經濟和社會發展第十個五年計劃綱, Guómín Jīngjì hé Shèhuì Fāzhǎn Dìshígè Wǔnián Jìhuà Gāngyào)”– State Development and Planning Commission of the People’s Republic of China http://www.ndrc.gov.cn/fzgh/ghwb/gjjh/WO20050614801665349340.PDF (accessed April 5, 2011). See also Kong, China’s International Petroleum Policy, 46.. 2.

(23) Chapter 1 China’s Energy Policy and South-South Cooperation?. 15th Central Committee of the Communist Party in October 2000. 15 At it, the character of oil as a “strategic issue” was recognized, as well as the fact that petroleum shortages required a “consensus” on a national response. 16 The year 2000 marks the beginning of the period of time examined in this study. Since the “Going Out” strategy encouraged Chinese national oil companies (NOCs) to become increasingly active overseas and to further develop themselves abroad in order to diversify petroleum sources, as well as to compete with foreign oil multinationals in overseas oil exploration and development, the presence of NOCs started to be noted in Asia, Africa and Latin America –as examined in the below sections of this Chapter. Indeed, it was in 1993 that Latin America became the first region CNPC entered for international oil and gas operation, when it won the tender to develop a Peruvian oilfield –twenty years ago at the time of writing. 17. 政治大. This study puts emphasis on a certainly interesting concurrence of events. In this regard, and as aforementioned, the PRC became a net oil importer in 1993 and the world’s second largest oil consumer and importer in 2004. 18 This research notes that these turning points in China’s energy policy happened in two years that are particularly significant for the purposes of this study, since it was precisely then that the strategic partnerships of the PRC with Brazil and Argentina were respectively established. This issue will be more closely examined in the following sections of this Chapter and in Chapters 3, 4 and 5.. 立. ‧. ‧ 國. 學. n. al. er. io. sit. y. Nat. This dissertation examines the impact that China’s increasing reliance on imported energy has had on Chinese energy policy in the first decade of the 21st century (2000-2010). The present research focuses on the role that Brazil and Argentina –which and have the 2nd and 3rd largest oil reserves in South America, respectively– have played as suppliers of energy resources to the PRC –in particular, of petroleum, one of the top commodities that they export to China. Throughout the observed period, Brazilian and Argentine petroleum exports have played a leading role in the relatively moderate contribution that South American petroleum makes to satisfy Chinese oil demand – although to different extents and with Brazil being a remarkably more significant oil supplier. The data examined reveals that, for most of the observed period (between 2000 and 2007), both Brazil and Argentina ranked as the top two South American suppliers of petroleum to the PRC, with their exports surpassing those of Venezuela –the region’s top. Ch. engchi. 15. i n U. v. “15th CPC Central Committee Calls 5th Plenary Session” – People’s Daily – October 9, 2000. http://english.peopledaily.com.cn/english/200010/09/eng20001009_52117.html (accessed June 3, 2010). 16 Kong, China's International Petroleum Policy, 141-143. 17 In this regard, it would also be important to point out that, in 1997, CNPC also invested in Venezuela and, in 1998, President Jiang Zemin visited Saudi Arabia, “celebrated” as a “Strategic Oil Partner” (which seems to be a special type of strategic partnership). “2013: the 20th year of CNPC’s presence in Latin America” – China National Petroleum Corporation http://www.cnpc.com.cn/en/press/Features/Interview_Q1.shtml (accessed March 2, 2013). 18 Please refer to Chung-chian Teng, “Hegemony or Partnership: China’s Strategy and Diplomacy toward Latin America,” in China and the Developing World: Beijing’s Strategy for the Twenty-First Century, ed. J. Eisenman, E. Heginbotham and D. Mitchell (Armonk, NY: M. E. Sharpe, 2007), 91.. 3.

(24) Chapter 1 China’s Energy Policy and South-South Cooperation?. energy producer and exporter (but which exports around three quarters of its crude oil to the US)– until 2007. In 2010, the last year of the period examined, China –the world’s second largest oil importer– had become the world’s top energy consumer, accounting for slightly over 20% of worldwide energy demand and overtaking the US (which accounted for 19%) and Brazil had retaken its position as China’s top supplier in South America, surpassing Venezuela –which had displaced it in 2007, 2008 and 2009– and with Argentina ranking third. Petroleum is not the prime mover in neither Sino-Brazilian nor Sino-Argentine relations –unlike the case of Venezuela– but it nevertheless is a top-two or top-three in the exports of these countries to the PRC. Indeed, crude oil plays a significant role in trade exchanges between them, ranking behind soybeans in the case of Argentina, and behind soybeans and iron ore, in the case of Brazil. Thus, Chapters 3, 4 and 5 examine the development of “bilateral dialogue and cooperative mechanisms in the field of energy” 19 between these countries, the strategic cooperation relationships (“strategic alliances”) between the national oil companies (NOCs) of China and Brazil –such as the one established between Sinopec and Petrobras in 2004 (the year the PRC became the world’s 2nd largest oil consumer and importer), or the 2005 Petrobras-CNPC MOU for “joint business ventures”– or with private oil companies in both Brazil –such as the 2010 Sinopec acquisition of a minority stake of the Brazilian unit of Repsol/YPF (thus becoming Repsol Sinopec Brasil – )– and Argentina – exclusively with private companies, due to this country’s lack of a NOC of its own throughout the observed period, such as the 2007 attempt by CNPC to acquire the Argentine assets of Repsol/YPF (with YPF standing for Yacimientos Petrolíferos Fiscales, or Treasury Petroleum Fields, or 阿根廷財政部油田公司, Argentina’s former state-owned oil company, acquired by Spain’s private oil company Repsol, or 雷普索爾公司, in the 1990s), 2010 CNOOC-Bridas Joint Venture (中國海洋石油-布里達斯公司 JV), or the CNOOC-Bridas plans to acquire Pan American Energy (PAE, 泛美能源 , a British-Argentine joint-venture), or 2010 Sinopec’s acquisition of the Argentine unit of Occidental Petroleum Corp. (OXY, 西方石油公司).. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Since the energy resources produced by these countries are not limited to fossil fuels, it is thus worthy to explore the potential that they have as suppliers of renewable energy sources, of which they are worldwide top producers and exporters and in which have a greater comparative advantage. It is argued that, with Latin America having been defined as the “Persian Gulf of biofuels –except that of course Latin America is much. 19. “2012 White Paper on Energy Policy”–State Council Information Office of the People’s Republic of China –《中国的能源政策(2012)》白皮书 (October 2012), 36. http://www.scio.gov.cn/zxbd/wz/201210/t1233774.htm http://www.gov.cn/english/official/201210/24/content_2250497.htm (accessed October 30, 2012). It is precisely because of the importance of the biofuel industry in Brazil and Argentina and its remarkable potential to satisfy China’s future energy needs that other major Latin American oil producing countries (such as Venezuela, Mexico, Ecuador or Peru) are not included in this research, for reasons of space.. 4.

(25) Chapter 1 China’s Energy Policy and South-South Cooperation?. more stable as a source of energy” 20 by D. J. Rothkopf (current Editor-at-Large of Foreign Policy and former Under Secretary of Commerce for International Trade in the Clinton administration) 21 and with both Brazil and Argentina being top regional and global producers and exporters of soybean-based biodiesel and sugar cane-based ethanol (mainly 1st-generation biofuels, but with significant developments also being made in 2ndgeneration –cellulosic– biofuels) 22– the addition of this renewable energy sources to their exports to the PRC would contribute to enhance energy security, alleviate environmental concerns and reduce the detrimental effects of the asymmetrical nature of their relations with the PRC. Chapter 2 adopts an asymmetrical interdependence perspective to analyze the implications that differences in economic magnitude and relevance have in SinoBrazilian and Sino-Argentine relations – with the PRC being able to benefit to a larger extent than the other two countries. Succinctly put, the research notes that, while the PRC is either the largest and second-largest trading partner of Brazil and Argentina, neither of them holds a similar rank relative to it. The parties involved in these relations do not have the same leverage or an equivalent clout: this becomes evident in the analysis of data that reveal that these countries are minor trade partners of the PRC, whose relevance is mainly derived from the role they play as providers of a reduced number of raw materials and commodities (soybeans, iron ore and petroleum). After noting that the theory’s fundamental tenet is that “asymmetrical interdependence can be a source of power” 23, the research puts emphasis in the fact that it is particularly relevant to cases of “asymmetrical. 立. ‧. ‧ 國. 學. 20. 政治大. n. al. er. io. sit. y. Nat. Interview with David J. Rothkopf, Biofuels in the Americas, Council on Foreign Relations (CFR), June 8, 2007. http://www.cfr.org/renewable-energy/biofuels-americas/p13550 See also Garthen Rothkopf, Blueprint for Green Energy in the Americas: Strategic Analysis of Opportunities for Brazil and the Hemisphere – Featuring The Global Biofuels Outlook 2007 (Washington, DC: Inter-American Development Bank, 2007) http://www.iadb.org/intal/intalcdi/PE/2008/01212.pdf 21 D. J. Rothkopf – Foreign Policy Group http://fpgroup.foreignpolicy.com/people/david-rothkopf/ 22 First–generation biofuels are obtained from sugars or starch (ethanol, from sugar cane or starch of corn, wheat or barley), from oil crops (biodiesel, from soybean, rapeseed oil, sunflower, palm, coconut, used cooking oil) or animal fats. Second-generation biofuels are produced from sustainable feedstock (such as cellulosic ethanol, from straw, wood and grass), and third-generation biofuels are obtained from microalgae, seaweed or microbes. See G. Dragone et al., “Third generation biofuels from microalgae,” in Current Research, Biotechnology and Education Topics in Applied Microbiology and Microbial Biotechnology (2010), 1355-1356. “Petrobras e KL Energy assinam parceria para produção de etanol celulósico” – Portal Brasil – August 24, 2010. http://www.brasil.gov.br/economia-e-emprego/2010/08/petrobras-e-kl-energy-assinam-parceria-paraproducao-de-etanol-celulosico (accessed August 29, 2010). See also: “Petrobras America and KL Energy Sign joint-Development Agreement to Optimize Technology for Cellulosic Ethanol Production from Sugarcane Bagasse” – Advanced Biofuels USA – August 24, 2010. http://advancedbiofuelsusa.info/petrobras-america-and-kl-energy-sign-joind-development-agreement-tooptimize-technology-for-cellulosic-ethanol-production-from-sugarcane-bagasse “Petrobras Technology 2011” – Petrobras website http://www.petrobras.com.br/downloads/energy-and-technology/petrobras-technology-2011.pdf 23 Robert O. Keohane and Joseph S. Nye, Power and Interdependence (New York: Wesley Longman, 2001): xii-xiii.. Ch. engchi. 5. i n U. v.

(26) Chapter 1 China’s Energy Policy and South-South Cooperation?. interdependence in trade, where power goes to those who can afford to hold back or break trade ties.” 24 It puts forward the argument that China –through skilful manipulation of the asymmetry– has succeeded in turning the potentially weak position of a commodity buyer and importer to its advantage, by framing relations with its providers into a “captive-supplier scheme” and exerting control over access to the Chinese domestic market. Both asymmetry and dependence are further deepened by the high concentration of Brazilian and Argentine export baskets and export destinations, which deepen their reliance on Chinese purchases. Empirically, the study examines two cases in which the PRC cleverly used the power derived from the asymmetrical and interdependent nature of its relations with these countries to impose embargoes to the dominant commodity that Brazil and Argentina export to it (soybeans), arguing that these measures benefited China but imposed heavy costs in the latter. The study seeks to contribute to the theory by putting forward the argument that dependence could be reduced or attenuated by arguing that the weaker countries could strengthen their bargaining position and gain leverage by the industrial use of its dominant export, soybeans –not only a foodstuff, but also the word’s most important energy crop –into an renewable energy resource (soybean-based biodiesel): the addition of Brazilian and Argentine biofuels to their traditional petroleum exports to the PRC would be beneficial to all three countries. Brazil and Argentina have enough productive capacity to export biodiesel without affecting China’s food security, while diversifying their export baskets and, being biodiesel –like petroleum– a more “exportable”, value-added product, and also increasing the number of their export destinations (diminishing their reliance on the Chinese market). In this regard, the present research departs from those conducted in the past –with the previous focus being on the role of these countries as suppliers of traditional hydrocarbon energy resources and other commodities to the PRC– and seeks to extend the current literature towards including the role that Brazilian and Argentine new sources of renewable energy can play in these countries’ relations with the PRC. As it will reappear in the Literature Review section of this chapter, a notable exception to the conspicuous absence of research in the aforementioned topic is the work by M. Fava Neves, who has several publications examining the positive role that Brazilian sugarcane-based ethanol can play in enhancing China’s energy security. A gap remains about the similar role that soybean-based biodiesel could play in this regard. This study seeks to contribute to fill this gap.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. In Chapter 3, this research highlights not only the phenomenal economic growth that the PRC has been experiencing ever since Deng’s reforms were implemented, but also the costs at which such an extraordinary economic takeoff has come. Deng’s “Four Modernizations” set the stage for China’s economic rise, which resulted, on the one hand, in China’s economy-centered rise, growing at such a remarkable pace that it has been defined as “a miracle” 25 and as “seemingly inevitable.” 26 On the other hand, in a truly. 24. Keohane and Nye, Power and Interdependence, 9-10. Justin Yifu Lin, Fang Cai and Zhou Li, The China Miracle: Development Strategy and Economic Reform (Hong Kong: The Chinese University Press, 2003). 25. 6.

(27) Chapter 1 China’s Energy Policy and South-South Cooperation?. dramatic increase in Chinese energy demand and consumption –although still relatively lower than other countries. The central government of the PRC has become increasingly concerned about the considerable energy security challenges the country will be facing in coming decades. By securing its energy supply, 27 the Chinese government would be able “to power the rapid growth of the economy”, 28 one of its priorities, thus being able to retain political legitimacy and maintain social stability. The chapter further examines the complexity of China’s energy policy and actors’ interactions in the energy sector, seeking to analyze the apparent dichotomy between China being currently considered as the world’s largest energy producer 29 and, at the same time, a major energy importer, increasingly reliant on overseas energy resources. An interesting point emphasized by Andrews-Speed et al. is that, in spite of the PRC having abundant energy resources in terms of both fossil and renewable energy (with Chinese demand met largely by coal and hydropower, with wind and solar energy making also significant contributions), the main problem it faces is that its “shortfall is not caused by an absolute shortage of primary energy resources, but from a shortage of energy in the forms required.” 30. 立. 政治大 the evolution of the PRC’s. ‧. ‧ 國. 學. The chapter analyzes petroleum policy and interactions between government and NOCs throughout the observed period, bearing in mind that China is especially dependent on oil, which –according to Anderson–is “the most important commodity traded worldwide” and, because of its essential importance in both economic and strategic terms, also “one of the most politically charged commodities.” 31 Chinese oil demand for transportation and mobility exceeds domestic production. To make matters worse, China has a limited endowment of oil, as well as maturing, aging oil fields. These circumstances reveal some of the difficulties faced by the Chinese oil sector which –besides of the capital intensive nature of the industry, suffers the inexorable pressure imposed by increasingly higher costs, according to the law. n. al. er. io. sit. y. Nat. 26. Ch. i n U. v. Cheng-yi Lin, “The Rise of China and Taiwan’s Response: The Anti–Secession Law as a Case Study,” in Issues & Studies 43, no. 1 (2007), 167. 27 The PRC’s “proactive foreign policy in… Latin America… serves the purpose of securing resources for China–whether they be energy or oil.” See Masako Ikegami, as quoted in Hsing-Huang Michael Hsiao and Cheng-yi Lin, “The rise of China,” in Rise of China: Beijing’s Strategies and Implications for the AsiaPacific, ed. H-H. M. Hsiao and C-y. Lin (Oxon, OX: Routledge, 2009), 5. See also Ch. 2 of the same volume: M. Ikegami, “China’s grand strategy of ‘peaceful rise’: a prelude to a new Cold War?” 28 In this regard, it has been noted that “maintaining a reliable and secure energy supply to power China’s economic boom is one of the Chinese Government’s top priorities. With oil imports surging, private car use soaring and the costs of environmental pollution mounting, a domestic biofuels industry seemed an attractive option for Beijing.” See “Biofuels –At What Cost? Government Support for Ethanol and Biodiesel in China,” report prepared by the Global Subsidies Initiative of the International Institute for Sustainable Development (November 2008), 1-2. 29 “2012 White Paper on Energy Policy”–State Council Information Office of the People’s Republic of China –《中国的能源政策(2012)》白皮书 (October 2012), 17. http://www.scio.gov.cn/zxbd/wz/201210/t1233774.htm http://www.gov.cn/english/official/2012-10/24/content_2250497.htm (accessed October 30, 2012). 30 Andrews-Speed et al., The Strategic Implications of China’s Energy Needs, 11, 13. 31 Ernest E. Smith and Owen L. Anderson. Materials on International Petroleum Transactions (Denver, CO: Rocky Mountain Mineral Law Foundation, 2010).. engchi. 7.

(28) Chapter 1 China’s Energy Policy and South-South Cooperation?. of diminishing returns. 32 China’s increasing dependence on imported petroleum is particularly worrisome: growing demand turned the PRC into the world’s second-largest oil consumer and net importer, in both cases only behind the United States, towards the end of the observed period 33 , with a very high percentage (around 50%) of this oil coming from overseas. Moreover, Chinese ever-growing import dependence on imported petroleum is not only steadily growing but also doing it very rapidly. It is at this point that the government-NOCs interaction is examined at the light of the concepts of “multilayered diplomacy” (spearheaded by high level official visits, with “presidential diplomacy” at the top layer) 34 and “petroleum diplomacy” (as part of the “energy ring” of China’s new diplomacy, together with “great power” and “neighbouring” diplomacy) 35 and described by a number of scholars in the Literature Review section of this study becomes relevant. Succinctly put, China’s “petroleum diplomacy” is to be better understood as to the “intersection between the pursuit of one country’s petroleum interests and its diplomatic interests, with one morphing into the realm of the other,” 36 which is fostered by visits from authorities and officials from multiple levels (the top layer being “presidential diplomacy” –official visits paid by presidents and vice presidents, high ranking official diplomats– the second level consisting of visits by “high-level officials from the central governmental agencies” – from the main ministries and commissions –and the third layer is represented by officials from the NOCs and other SOEs). 37. 立. 政治大. ‧ 國. 學. ‧. Chapters 4 and 5 examine two major issues: the asymmetrical dependence of these countries vis-à-vis the PRC –examined in detail in Chapter 2, which analyzes the trade restrictions that China imposed to Brazil (in 2004) and to Argentina (in 2010)– and,. io. sit. y. Nat. 32. n. al. er. According to the “principle of diminishing marginal productivity” –also called the “law of diminishing returns”– if one input in the production process of a certain commodity is increased while all other inputs remain constant (i.e., they are held fixed), a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output. In the case of petroleum, maturing or aging oilfields will yield a progressively diminishing number of barrels, with new barrels being obtained at increasingly higher costs. “diminishing returns” – Encyclopædia Britannica http://www.britannica.com/EBchecked/topic/163723/diminishing-returns (accessed December 20, 2011). 33 “Top World Oil Net Importers–2011” – U.S. Energy Information Administration (EIA) http://www.eia.gov/countries/index.cfm 34 See Chung-chian Teng, “The New Direction of China’s Foreign Relations in Latin America Under the Hu Administration (Hu Jintao Dingdao Xiazhongzhi dui Latingmeizhou Waiwen Guanxi de Xinfangxiang)”, in Peace Forum Website – February 2005. http://wwww.peaceforum.org.tw/onweb.jsp?webno=3333333305&webitem_no=1152 (accessed April 18, 2011). See Chung-chian Teng, “Democracy, Development and China Acquisition of Oil in the Third World,” in Dancing with the Dragon: China’s Emergence in the Developing World, ed. Dennis Hickey, Baogang Guo (Plymouth, UK: Lexington Books, 2010): 108. 35 Yu Zhengliang, “Zhonggou Xinwaijian Zhouyi (China’s new Diplomacy)”, in Lishi Jiaoxue Wenti (History Teaching and Research) 5 (2004): 14-18. As cited in Kong, China's International Petroleum Policy, 118. 36 Kong, China's International Petroleum Policy, 118. 37 Teng, “Democracy, Development and China Acquisition of Oil in the Third World,” 107-108.. Ch. engchi. 8. i n U. v.

(29) Chapter 1 China’s Energy Policy and South-South Cooperation?. in energy terms, the actors and policies that explain the different performance of both countries as energy suppliers to the PRC, highlighting the major developments on a yearly base. The “game-changing” discoveries of enormous offshore oilfields in Brazil (in 2007 and 2010) are taken into special consideration. In spite of the fact that it exceeds the time frame of this study, the 2011 discovery of a gigantic shale formation in Argentina is succinctly examined in order to make the point that resources, by themselves, are not enough to perform well, nor to foster energy cooperation. Consistent and coherent policy is needed to turn them into reserves. Brazil fulfills this criteria, Argentina does not. Therefore, Chapter 4 describes the energy evolution experienced by Brazil throughout the observed period, which results in the country becoming an increasingly important oil supplier to the PRC. This study highlights that this can be mainly attributed to consistent and coherent Brazilian energy policy, which results –and is boosted by– the discovery of enormous offshore oilfields. Succinctly put, while in 2000 Brazil accounted only for 1% of China’s total petroleum imports, and having achieved energy selfsufficiency in 2006 and discovered gigantic off-shore oilfields in 2007 and 2010, the country ended up in 2010 with the PRC –since 2009 its largest trading partner– becoming also Brazil’s main oil export destination (in both cases, surpassing the US) 38 and accounting for 13% of Chinese total petroleum imports (or US$ 4.1 billion, with a one billion difference over Venezuela’s oil exports to the PRC that year). The remarkable Brazilian performance as an energy exporter with the potential to become a top oil producer in the mid-term was, to a significant extent, based on the discovery of the Tupi and Libra fields (in 2007 and 2010, respectively), which can truly be considered as “game changers” in Sino-Brazilian relations. When Tupi was discovered, President Lula famously proclaimed that “God must be Brazilian” 39 and defined the discovery as a “blessing” (“benção”) 40 , and energy analysts considered that it was “the Western Hemisphere's largest oil discovery in 30 years… [and] marked Brazil's official emergence as a nascent global oil power.” 41 Only three years later, the find of Libra made it Brazil’s largest offshore oil discovery ever, surpassing Tupi. 42 The chapter examines in detail the. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. 38. Ch. engchi. i n U. v. Ana Cristina Alves, “Chinese Economic Statecraft: a Comparative Study of China’s Oil-backed Loans in Angola and Brazil”, in Journal of Current Chinese Affairs 42, No. 1 (2013): 114. 39 Andrés Oppenheimer, “Brazil’s huge oil find will lead to new wealth… or a petro-populist giant”, The Miami Herald, November 26, 2007. http://www.miamiherald.com/news/columnists/andres_oppenheimer/story/319805.html (accessed April 2, 2010). 40 As defined by President Lula while being interviewed in the “Café com o Presidente” weekly program, conducted on August 30, 2009. During it, President Lula referred to the “pre-salt” oilfields as being “an asset of the [Brazilian] Union, [part of the] wealth of the [Brazilian] people and the future of Brazil” (“Présal: patrimônio da União, riqueza do Povo e futuro do Brasil”) http://blog.planalto.gov.br/patrimonio-da-uniao-riqueza-do-povo-futuro-do-brasil/ 41 Jeff Fick, “Petrobras Pumps First Crude from Massive Tupi Field Offshore Brazil”, Dow Jones Newswires, May 1, 2009. http://www.rigzone.com/news/article.asp?a_id=75679#sthash.ywmLUz61.dpuf 42 Jeff Fick, “Brazil’s Oil Field May Be the World’s Most Expensive to Develop”, The Wall Street Journal, August 8, 2013. http://blogs.wsj.com/moneybeat/2013/08/08/brazils-oil-field-may-be-the-worlds-most-expensive-todevelop/ (accessed August 9, 2013).. 9.

(30) Chapter 1 China’s Energy Policy and South-South Cooperation?. intensification of visits and exchanges following these findings, as well as the alliances, oil-backed loans and other energy agreements signed between the governments and NOCs of these countries. It also explores the role that biofuels could play in SinoBrazilian energy relations, given that Brazil is a worldwide leading producer of ethanol. Sino-Argentine energy relations are examined in Chapter 5. This country started the observed period at a level comparable to that of Brazil –accounting for 1% of Chinese total oil imports in 2001– and finished it with crude oil exports that represented 2.2% of China’s total imports. Despite their relative increase in terms of Argentina’s share in Chinese imports (which value increase from US$ 0.022 billion in 2000 to around US$ 0.9 billion in 2006, the highest value recorded), the poor performance reflects the lack of a proper petroleum policy on the part of the Argentine government, as well as the fact that the country did not have a NOC that could act as counterpart of the Chinese oil companies, which had to deal with private oil companies such as Spain’s Repsol/YPF (( 雷普索爾石油公司 ), Argentina’s Bridas Corporation ( 布里达斯公司 ) and the Argentine British Joint Venture PAE (Pan American Energy LLC (PAE, 泛美能源 43). Although the country remained an oil exporter throughout the observed period –having even accounted for a record share of 5.5% of China’s total imports in 2006 (accounting for 40% of Argentine oil exports), its gradually diminishing production and exports, together with the lack of exploratory activity, resulted in the country’s loss of leverage. Eventually, Argentina was to lose its self-sufficiency in 2011, in a diametrically opposed situation to the case examined in the previous chapter. Paradoxically, it was the same year that the discovery of a gigantic shale oil and gas formation (Vaca Muerta – standing for Dead Cow, 死牛油田- the world’s third largest non-conventional reservoir) in the South of the country was announced. Thus, this chapter analyzes a variety of reasons that would suggest the Argentine government to embrace the Brazilian energy policy profile in order to increase its attractiveness for the exploitation of these fields by both national and foreign oil companies.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. i n U. v. The aforementioned discoveries have created attractive investment opportunities for Chinese NOCs in Brazil and Argentina, and in fact some NOCs have been in talks with the governments of these countries about their involvement in these projects or are part of the consortium of oil companies that will exploit them (CNOOC and CNPC, in the Libra field, and all three CNPC, CNOOC and Sinopec in the case of Argentina). 44 Following sections of this chapter, as well as Chapters 3, 4 and 5, examine in detail the main visits paid by Chinese, Brazilian and Argentine officials throughout the observed period, as well as the oil-backed loans, MOUs, Joint Ventures and other agreements that have been established between them.. Ch. engchi. 43. Translation by the author. For further details, please refer to: Pan American Energy (PAE) http://www.pan-energy.com/ (accessed July 2, 2012). 44 “Los chinos, agazapados y a la espera de YPF” – La Nación – April 17, 2012. http://www.lanacion.com.ar/1465719-los-chinos-agazapados-y-a-la-espera-de-ypf (accessed 2012).. 10. April. 18,.