China’s Energy and Agriculture Sectors
One of China’s national priorities for the 21st century has been to assert its independence and self-sufficiency, particularly vis-à-vis the western world. Within this framework, two economic sectors are of particular importance, energy and agriculture. This article explores how China has implemented policy to expand its market base and become an exporter within the agriculture industry.
China’s Energy and Agriculture Sectors
As it relates to energy, China is one of the world’s largest importers and consumers of fossil fuels, which are essential to keeping its economy functioning and growing. The reality today is that China is highly dependent on the import of energetic resources because of the insufficient amount of fossil fuel reserves and other energy sources within its own national territory. In spite of the domestic economic slowdown in China over the last year, which would normally lead to a reduction in petroleum imports, the country is taking advantage of the favorably low global market prices to fill its strategic petroleum reserves. These reserves are particularly important today, given the recent announcement by the OPEC countries of a decrease in overall production by the end of the year. Similarly, China is investing heavily in renewable energy initiatives and has become a large consumer of oilseeds, some of which are destined to the production biofuels.
During 2013, China was the fourth largest oil producer in the world with an approximate extraction of 4.5 million barrels per day. The same year, China was the world’s second consumer, after the United States, with an approximate consumption of 10.3 million barrels per day. China’s main oil producing regions are the Tarim basin in the Xinjiang Uyghur autonomous region and the Songliao basin on the northeastern regions towards Manchuria. One final region that has become increasingly important to China in terms of fuel reserves exploration is the South China Sea.
The South China Sea serves several purposes within China’s grand regional strategy. Firstly, the abovementioned exploration for natural energy sources. Secondly, and more importantly, is the fact that it represents a key maritime seaway, through which the vast majority of China’s imported energy sources must transit. Most of these imports originate from regions such as the Persian Gulf and East Africa via the Red Sea.
Maritime Strategic Lines of Communication through the Indian Ocean are central to China’s foreign and commercial policy given that they secure the trade of vital interests, such as energy and agriculture. In this regard, China has invested in agricultural projects in Central and East Africa, such as rice and grain production. Most of these investments are done through semi-private companies with close ties to the government in Beijing in an effort to diversify the nation’s pool of food sources. Similarly, the maritime strategic lines of communication known as the String of Pearls, extending from south Pacific seaports in mainland China to the Red Sea stations of Djibouti and Port Sudan, represents a key naval route which is at times threatened by other actors within the Indian Ocean region.
Ultimately, access to the Mediterranean, through the Red Sea, is part of China’s plan to become an agricultural goods supplier to European markets. In this regard, China seeks to displace traditional European suppliers, like Turkey and other central Asian nations, within markets such as fruits, raisins, and certain grains. China has already made key inroads into the Russian agricultural markets by taking timely advantage of the supply gap created by the Western sanctions limiting trade with Moscow as well as the geographic proximity between the two nations.
(Read more about Exclusive Economic Zones in the 21st Century)