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Motivations behind China’s Foreign Oil Quest: A Perspective from the Chinese Government and the Oil Companies

Abstract

China’ economic boom has produced a surging appetite for fossil fuels, particularly oil. To foster and sustain its economic development, China has taken a series of steps to quench its thirst for energy. The most striking measure is its high-profile oil diplomacy, centering on the goal of gaining more secure national control of overseas oil and gas supplies. Why has China chosen oil diplomacy over directly purchasing oil on the international market? And why does one prefer direct control of oil and gas? This paper attempts to address China’s motivations from the perspectives of both the central government and the national oil companies (NOCs). It is argued that China’s oil diplomacy has been driven not only by the government’s learning skill and strategic concerns, but also by the NOCs’ strong commercial motives to expand business abroad and their management’s personal incentive. Although both actors have common stakes in securing oil and gas from abroad, this by no means can guarantee that the NOCs will obediently follow state orders.

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Correspondence to Shaofeng Chen.

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Shaofeng Chen is a Research Officer at the East Asian Institute, National University of Singapore. He is a PhD candidate in the Department of Political Science of National University of Singapore. His research interests focus on energy security and China’s political economy. He has published several book chapters, one English paper in Perspectives, and several articles in prestigious Chinese journals. The author wishes to thank anonymous referees, Prof. Chen An, Dr. Lin Kun-Chin, Dr. Kripa Sridharan, Professor Sujian Guo and Dr. Erik Mobrand for their constructive comments, and Chan Wai Yuk, Tan Lye Chuan Paul and Paula Presley for their proofreading. The author is responsible for any errors.

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Chen, S. Motivations behind China’s Foreign Oil Quest: A Perspective from the Chinese Government and the Oil Companies. J OF CHIN POLIT SCI 13, 79–104 (2008). https://doi.org/10.1007/s11366-008-9017-7

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Key words

  • China
  • oil diplomacy
  • Chinese oil companies
  • motivation
  • government-business interaction