Prelims

Energy Security in Times of Economic Transition: Lessons from China

ISBN: 978-1-83982-465-4, eISBN: 978-1-83982-464-7

Publication date: 20 January 2021

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Citation

Lixia, Y. (2021), "Prelims", Energy Security in Times of Economic Transition: Lessons from China, Emerald Publishing Limited, Leeds, pp. i-xx. https://doi.org/10.1108/978-1-83982-464-720201001

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Emerald Publishing Limited

Half Title Page

Energy Security in Times of Economic Transition

Title Page

Energy Security in Times of Economic Transition: Lessons from China

By

Yao Lixia

United Kingdom – North America – Japan – India – Malaysia – China

Copyright Page

Emerald Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2021

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ISBN: 978-1-83982-465-4 (Print)

ISBN: 978-1-83982-464-7 (Online)

ISBN: 978-1-83982-466-1 (Epub)

Abbreviations	ix
Introduction	xiii
Acknowledgment	xv
List of Tables	xvii
List of Figures	xix
Chapter 1 Into the Landscape	1
1.1 Background	1
1.1.1 Energy Security and Energy Policy	1
1.1.2 Definitions of Energy Security and Energy Policy	2
1.1.3 The Importance of Analysing China’s Energy Policy	4
1.2 Research Questions and Key Findings	5
1.3 Existing Discussions on China’s Energy Policy and Energy Security	5
1.4 Study Value and Contributions to Knowledge	9
1.5 The 4-As Framework	11
1.6 Analytical Framework of the Book	12
1.6.1 Explanation of the Analytical Framework	12
1.6.2 The Scope of the Analytical Framework	14
1.7 Research Methodology	15
1.8 Book Structure	15
Chapter 2 Energy Security: Concepts, Frameworks and Indicators	17
2.1 Views on Energy Policy and Energy Security	17
2.1.1 Energy Policy	17
2.1.2 Energy Security	18
2.1.3 Assessment Frameworks for Energy Security	22
2.2 The Concept of Energy Security – A Need for a Holistic Approach	28
2.3 The Quantification of Energy Security: Indicators Identification	32
2.3.1 Simple Energy Security Indicators	34
2.3.2 Aggregated Energy Security Indicators	34
2.3.3 Independent Energy Security Measurement Systems	36
2.4 Chapter Summary	38
Chapter 3 Quantitative Analysis of Energy Security in China	39
3.1 Formulation of Indicators to Examine Energy Security in China	39
3.1.1 Availability (AV) Indicators	42
3.1.2 Applicability (AP) Indicators	44
3.1.3 Acceptability (AC) Indicators	49
3.1.4 Affordability (AF) Indicators	52
3.2 Data	54
3.2.1 The AV Data	54
3.2.2 The AP Data55
3.2.3 The AC Data56
3.2.4 The AF Data57
3.3 Data Coding and the Performance Scoring	58
3.3.1 Data Coding	58
3.3.2 Performance Scoring – Area of Rhombus59
3.4 Evolution of the 4-As	59
3.4.1 An Overview59
3.4.2 The AV Trend66
3.4.3 The AP Trend	68
3.4.4 The AC Trend	69
3.4.5 The AF Trend	71
3.5 Chapter Summary	73
Chapter 4 Energy Policy in China Since its Reform and Opening Up	75
4.1 Energy Policies from 1949 (Founding of PRC) to 1976 (End of Cultural Revolution)	75
4.1.1 Energy Polices from 1949 (Founding of PRC) to 1957 (End of the First Five-Year Plan)	75
4.1.2 Energy Policies During the ‘Great Leap Forward’	77
4.1.3 Energy Policies after the ‘Great Leap Forward’ (from 1961 to 1966)	79
4.1.4 Energy Policies During the ‘Cultural Revolution’ (from 1966 to 1976)	81
4.2 Energy Policies of the AV Dimension	82
4.2.1 Coal Production During the Reform Period	82
4.2.2 China’s Oil and Gas Industry	87
4.2.3 China’s Electricity Generation	88
4.3 Energy Policies of the AP Dimension	90
4.3.1 Energy Conservation and Energy Intensity	90
4.3.2 Advancement of Energy Technologies During the Reform Period	95
4.4 Energy Policies of the AC Dimension	96
4.4.1 Air Pollution Control During the Reform Period	96
4.4.2 Policies on Renewable Energies and Nuclear Power	102
4.5 Energy Policies of the AF Dimension	106
4.5.1 Policies on Coal Price	106
4.5.2 Policies on Electricity Price	108
4.5.3 Policies on Oil Price	110
4.6 Chapter Summary and Further Discussion	111
Chapter 5 The Impact of Economic Reforms on the Energy Sector and Energy Security	113
5.1 Introduction	114
5.2 Economic Reform and Energy Sector Reform: The Frst Phase (1978–1992)	115
5.2.1 The Initial Period (1978–1984): Planned Economy Dominating, Market Regulation Supplemented	116
5.2.2 From Rural to Urban: Further and Faster Reforms Until 1989 (1984–1989)	119
5.2.3 Adjustment and Recovering of the Economy (1989–1992): Combination of Planned Economy and Market Regulation	124
5.3 Economic Reform and Energy Sector Reform: The Second Phase (1993–2002)	127
5.3.1 Government Structure Reform and Its Impacts on Energy Sector	127
5.3.2 Fiscal and Financial Reforms and Their Impact on Energy Sector	130
5.3.3 SOEs Reform and Its Impact on Energy Sector	132
5.3.4 Western Development Strategy and Its Impacts on Energy Sector	139
5.3.5 A Critical Review of the Economic Reform During the Second Phase and Its Impact on the Energy Sector	141
5.4 Economic Reform and Energy Sector Reform: The Third Phase (2003–2010)	142
5.4.1 Further SOEs Reform	144
5.4.2 Continuing Marketisation	145
5.4.3 Increasing Attention to Environmental Protection	147
5.5 China’s Economic Reform and Energy Security: A Chapter Conclusion	149
Chapter 6 Belt and Road Initiative and China’s Energy Security: Can China be More Energy Secured?	151
6.1 Introduction	151
6.2 BRI Projects in the World’s Energy Sector	152
6.2.1. Central Asia	152
6.2.2. South Asia	154
6.2.3. Middle East	156
6.2.4. Southeast Asia	158
6.3 Conclusion	159
Chapter 7 Conclusion	161
7.1 Contribution of the Book: The Quantitative Methodology	163
7.2 Contribution of the Book: The Qualitative Methodology	165
7.3 Contribution of the Book: China’s Energy Security Under BRI	170
Bibliography	171
Index	193

Abbreviations

Acceptability by society	AC
Affordability of energy prices	AF
Analytic hierarchical process	AHP
Applicability of technology	AP
Asia Pacific Energy Research Centre	APERC
Availability of resource	AV
Barrels per day	bpd
Belt and Road Initiative	BRI
Billion cubic metres	bcm
British Petroleum	BP
Carbon capture and storage	CCS
Carbon dioxide	CO₂
China Energy Conservation Investment Corporation	CECIC
China National Offshore Oil Corporation	CNOOC
China National Petroleum Corporation	CNPC
China Petrochemical Corporation	Sinopec
China Statistical Yearbook	CSY
China’s National Development and Reform Commission	NDRC
China-Pakistan Economic Corridor	CPEC
Chinese Academy of Social Sciences	CASS
Chinese Communist Party	CCP
Coal-bed methane	CBM
Coal-mine methane	CMM
Contract Responsibility System	CRS
Department for Business, Enterprise and Regulatory Reform	DBERR
Diversification of primary energy demand	DoPED
Driving force–state–response	DSR
Energy indicators for sustainable development	EISD
Energy Information Administration	EIA
European Union	EU
Five-Year Plan of economic and social development	FYP
Frontier Works Organisation	FWO
Global Terrorism Index	GTI
Greenhouse gas	GHG
Gross domestic product	GDP
Gross national product	GNP
Group company system	GCS
Gulf Cooperation Council	GCC
Household Responsibility system	HRS
Hydro, Eolien, Light, Insulation, Organomasse	HELIO
Independent power producer	IPP
Indicators for sustainable energy development	ISED
Initial public offering	IPO
International Atomic Energy Agency	IAEA
International Energy Agency	IEA
Kilowatt-hour	kWh
Kuomintang	KMT
Large and medium-sized enterprise	LME
Liquefied natural gas	LNG
Lawrence Berkeley National Laboratory	LBNL
Megawatt-hour	MWh
Memorandum of understanding	MOU
Middle East Oil Import Dependency	MEOID
Million tons	Mt
Modern enterprise system	MES
National Bureau of Statistics of China	NBS
National Energy Administration	NEA
National Environmental Protection Agency	NEPA
National Oil Company	NOC
National People’s Congress	NPC
National Renewable Energy Laboratory	NREL
Net energy import dependency	NEID
Net oil import dependency	NOID
Non-carbon based fuel portfolio	NCFP
Non-governmental organisation	NGO
Not in my backyard	NIMBY
Oil vulnerability index	OVI
Organisation for Economic Co-operation and Development	OECD
Particulate matter-10	PM₁₀
People’s Republic of China	PRC
Renminbi	RMB
Research and Development	R&D
Reserve-to-production	R/P
State Electricity Regulatory Commission	SERC
Small and medium-sized enterprise	SME
State Development and Planning Commission	SDPC
State Economic and Trade Commission	SETC
State Electricity Regulatory Commission	SERC
State Environmental Protection Administration	SEPA
State Petrochemical Industry Bureau	SPIB
State Planning Commission	SPC
State Power Corporation of China	SPCC
State Power Investment Corporation	SPIC
State-owned enterprise	SOE
Sulfur dioxide	SO₂
Sustainable Energy Watch	SEW
Sustainability indicator	SI
Tons of coal equivalent	tce
Total primary energy supply	TPES
Township and village coal mine	TVCM
Township and village enterprise	TVE
United Nations	UN
United Nations Development Programme	UNDP
United States	U.S.
United States Dollar	USD
Work programme on indicators of sustainable development	WPISD
World Energy Council	WEC

Introduction

Despite unprecedented energy consumption rates and environmental sustainability threats, China has seen fast economic growth and its energy policy and energy security have gone through decades of transformation. As China’s economy shifts from a planned to a market mechanism, it is valuable to find the root reason behind the transformation of the energy policy and energy security situation.

International political economy and security studies on China have yet to explore the interaction among three important factors: its energy policy, its energy security, and macroeconomic reform. This book aims to fill this gap in the literature with a new methodological approach to the study of China’s energy security. It applies both quantitative and qualitative analyses to the energy security situation in China during the reform period. With this said, two primary objectives are achieved in this book. The first objective is to examine how the energy security situation in China has evolved during the economic reform period. This book establishes a quantitative framework based on a comprehensive concept of energy security which covers availability of resources, applicability of technologies, acceptability by society, and affordability of prices. The framework analysis shows that China’s energy security situation has not improved during the reform period.

The second objective of the book is to explore qualitatively why the energy security situation has not improved. To answer the ‘why’ question, the book opens up a new perspective by analysing the relationship between energy policies and the macroeconomic reform. It is found that China’s macroeconomic reform has restricted the formation of China’s energy policies and determined its energy security situation. In essence, China’s energy policies are only a reaction to the macroeconomic measures. In other words, China’s energy policies are not originally intended to improve energy security, but passive reactions to China’s macroeconomic reform. This explains why China did not improve its energy security situation despite 40 years of reform.

In addition, with a separate chapter, it also includes an international perspective by studying the impact of China’s Belt and Road Initiative on its energy security situation. This book is not only meaningful for the case of China but also useful to explain energy security in other countries, especially those countries in economic transition.

Acknowledgment

I would like to thank my parents from the bottom of my heart for their dedication and support. They always stand by me whenever I am in difficulty. They are the nicest people in my world.

List of Tables

Table 3.1.	China’s Coal Reserve (Mt), Coal Production (Mt), and Coal R/P Ratio (Years)	55
Table 3.2.	Av Data for Each Ending Year of the Fyp Periods	55
Table 3.3.	Ap Data for Each Ending Year of the Fyp Periods	57
Table 3.4.	Ac Data for Each Ending Year of the Fyp Periods	57
Table 3.5.	Af Data for Each Ending Year of the Fyp Periods	58
Table 3.6.	Scoring Scale for Data Converted into Ordinal Values	60
Table 3.7.	The 4-As Indicators in Ordinal Values	61
Table 3.8.	Total Rhombus Area of Ending Year of Fyp	65
Table 3.9.	Imbalance Index of Ending Year of Fyp	65

List of Figures

Fig. 1.1.	The Macro Economy-Driven Energy Security Mechanism	12
Fig. 2.1.	The Energy Security Spectrum	24
Fig. 2.2.	A General Framework Evaluating Energy Security in China	27
Fig. 2.3.	A Detailed Framework Evaluating Energy Security in China	28
Fig. 3.1.	The Concept Behind Sustainability Indicators	40
Fig. 3.2.	Energy Security Status of 1980 (Benchmark for This Study): 68.04 Sq. Units	62
Fig. 3.3.	Energy Security Status of 1985 (the Ending Year of the Sixth Fyp Period): 72.52 Sq. Units	62
Fig. 3.4.	Energy Security Status of 1990 (the Ending Year of the Seventh Fyp Period): 59 Sq. Units	63
Fig. 3.5.	Energy Security Status of 1995 (the Ending Year of the Eighth Fyp Period): 43.92 Sq. Units	63
Fig. 3.6.	Energy Security Status of 2000 (the Ending Year of the Ninth Fyp Period): 52.48 Sq. Units	64
Fig. 3.7.	Energy Security Status of 2005 (the Ending Year of the Tenth Fyp Period): 70.84 Sq. Units	64
Fig. 3.8.	Energy Security Status of 2010 (the Ending Year of the Eleventh Fyp Period): 62.32 Sq. Units	65
Fig. 3.9.	Evolving Trend Timeline for Area of the Rhombuses	66
Fig. 3.10.	Trend Illustration of Average Value for Av	67
Fig. 3.11.	Trend Illustration of Average Value for Ap	68
Fig. 3.12.	Trend Illustration of Average Value for Ac	70
Fig. 3.13.	Trend Illustration of Average Value for Af	71
Fig. 4.1.	Output Increase by the Centrally Administered State-Owned Mines and TVCMs from 2001 to 2006 (million tons)	86

Book Chapters

Prelims

Chapter 1: Into the Landscapes

Chapter 2: Energy Security: Concepts, Frameworks and Indicators

Chapter 3: Quantitative Analysis of Energy Security in China

Chapter 4: Energy Policy in China Since its Reform and Opening Up

Chapter 5: The Impact of Economic Reforms on the Energy Sector and Energy Security

Chapter 6: Belt and Road Initiative and China’s Energy Security: Can China be More Energy Secured?

Chapter 7: Conclusion

Bibliography

Index