origin.www.uscc.gov
Testimony of Dennis C. Shea
Chairman, U.S.-China Economic and Security Review Commission
“China’s Energy Engagement with Central Asia and Implications for the United States”
for the House Foreign Affairs Subcommittee on Europe, Eurasia, and Emerging Threats
Hearing on “The Development of Energy Resources in Central Asia”
May 21, 2014

Chairman Rohrabacher, Ranking Member Keating, Members of the Subcommittee, thank you for the opportunity to testify today. Before I begin, l would like to note that this testimony reflects my personal views and not necessarily the judgments of the U.S.-China Economic and Security Review Commission.

Over the last decade, China’s engagement with its Central Asian neighbors has grown significantly, largely due to Beijing’s efforts to boost energy security and enhance stability in China’s western provinces. In a region with a long history of Russian control and influence, China now is the most influential and powerful economic actor and is poised to eventually surpass the United States and Russia as Central Asia’s preeminent foreign power.

Drivers of China’s Increasing Energy Engagement with Central Asia

The Chinese government is increasing its economic ties with Central Asia, particularly in the energy sector, for two main strategic reasons.

First, Beijing is expanding its energy relationship with Central Asian states as part of a multifaceted, longterm energy security strategy. By doing so, China can diversify the types and sources of energy to reduce the risk of disruption from any one supplier. For years, Chinese leaders have viewed the growing reliance on foreign supplies of energy as a vulnerability to the country’s economic growth, the cornerstone of the Chinese Communist Party’s legitimacy. Underpinning this concern is Beijing’s fear that an economic slowdown could destabilize the regime.

In the long term, Central Asian oil and natural gas will fulfill some of China’s energy needs, but it will by no means be a game changer for Chinese energy security. Some Chinese policymakers and strategists argue that Central Asian energy imports will lessen China’s reliance on seaborne energy, thereby mitigating China’s “Malacca dilemma,” or vulnerability to potential future efforts by other countries (such as the United States) to blockade Chinese trade at critical maritime chokepoints. This assumption is misguided, however. China’s oil demand growth is such that the share of seaborne imports (primarily from Saudi Arabia) will increase even if all China’s planned overland energy routes are realized. Moreover, energy supplies transported via Central Asian pipelines are likely to be more expensive and more vulnerable than seaborne supplies to both physical attack by terrorists or other parties and unintentional disruption.1

Second, Beijing seeks to promote the security and development of its Xinjiang Autonomous Region. 2 Poverty, ethnic tensions, and repressive government policies have led to episodic unrest, engendered political movements for Xinjiang’s independence or autonomy from Chinese rule, and sometimes resulted in violence and terrorism. Beijing judges increased economic ties between China’s westernmost region and Central Asia will raise the welfare of its Uyghur population, the largest ethnic minority in Xinjiang, thereby helping to rein in ethnic unrest and further assimilate minorities into China’s majority ethnic Han society. In 2010, then-President Hu Jintao announced that China would bring Xinjiang residents’ per capita GDP up to the national average by 2015.3 Furthermore, China’s foreign policy community is publicly debating a grand strategy, known as “Marching Westward,” that calls for China to shift its attention from East Asia and “rebalance” its strategic focus to the vast area from Central Asia to the Middle East.4

Download to the pdf: Shea_Testimony–China’s Energy Engagement with Central Asia and Implications for the United States