Agency warns mainland energy needs may disrupt world market

PUBLISHED : Tuesday, 21 March, 2000, 12:00am
UPDATED : Tuesday, 21 March, 2000, 12:00am

The International Energy Agency (IEA) has warned that the mainland's energy import policies were becoming increasingly vulnerable to external events beyond its control.

In an 83-page report released yesterday, the IEA also criticised Beijing for underestimating the level of imports it requires.

'Many people are worried about China's entry into the world energy market and the possibility that they could disrupt the world energy industry because of their increasing demand for petroleum, especially in the Middle East,' said Mehmet Ogutcu, who wrote the report.

The mainland envisages importing only 95 million tonnes of petroleum by 2010, rising to 140 million tonnes in 2020 and 440 million tonnes in 2050. In contrast, the IEA suggests import requirements could reach 200 million tonnes in 2010 and twice that in 2020.

To meet the growing import demand, the mainland has been investing in several areas around the world, from the Middle East to Central Asia and Latin America.

The IEA is concerned that if political difficulties arose, particularly in the Middle East where it has the majority of its energy relationships, Beijing could find it difficult to continue securing supply. Similarly, the mainland does not have control of the shipping lanes from Middle Eastern countries to the mainland.

'China's increased dependence on overseas petroleum and its growing investments in overseas resources are bound to affect the government's attitude and behaviour in international politics, especially in the Middle East, Central Asia, Russia and the Asean region,' the report, entitled 'China's Worldwide Quest for Energy Security', said.

Released at the IEA's headquarters in Paris, in the presence of Beijing's ambassador to France, Wu Jian, the IEA report said that while exports had almost dried up, it predicted Beijing would continue to develop relations with customers - particularly in Japan or South Korea - where it could help inward investment and technology flows in the technology sector.

On the import side, the IEA said the mainland was striving hard to put its relations on a long-term and secure footing, sometimes courting countries such as Iraq and Sudan, and consequently raising controversy in the West - although it says it is not doing this purposefully.

'Beijing's recent ratification of the Law of the Sea Treaty has a bearing here,' the IEA said.

'Observers have preoccupied themselves with what this gesture may or may not mean with respect to China's pursuit of its territorial claims in the South China Sea, forgetting that the treaty's guarantee of safe passage through crowded channels, such as the Malacca Strait, was the primary reason the world's navies supported its negotiations.' The IEA claimed that when the mainland developed trading relations with Iran, it did so before it realised the impact its energy security concerns would have on foreign policy.