Cooperation rather than Competition (II): Love Thy Neighbour’s Resources

In an earlier blog post, the need for intra-state cooperation was highlighted as an important factor in not only harnessing the potential of renewable energy resources in various parts of China, but also ensuring uniformed development for the benefit of all Chinese citizens. This blog post will highlight the importance of inter-state cooperation – particularly between China and its immediate neighbour Taiwan.

Studies have demonstrated the importance of inter-state energy cooperation, whether it be for traditional or renewable sources of energy. In terms of traditional sources of energy, China has depended on oil refineries in Taiwan for its oil imports. This is an interesting dynamic given China’s predominantly militarily offensive stance towards Taiwan. The demand for such facilities is likely to increase given the potential of Russian oil supply as an alternative to Middle Eastern oil, as the former has lower sulphur content and is geographically closer.

Conversely, however, Taiwan is increasingly dependent on China for its own energy needs. There are several factors contributing to this. Firstly, Taiwan has exhausted its small reserves of fossil fuels, to the extent that its ability to produce 20 percent of primary energy sources in 1978 has decreased to 0.6 percent in 2010. Secondly, Taiwan’s international efforts for improving energy efficiency and sufficiency are often stalled due to the limited global recognition of Taiwan as a sovereign state. Given these above-mentioned dynamics, it is clear that dependence between China and Taiwan is mutual.

Fortunately, China-Taiwan relations have improved over the years, albeit with some minor hiccups. Energy relations are significant in increasing economic ties and trade between China and Taiwan, where joint energy exploration efforts in disputed areas have also provided an impetus for enhanced bilateral ties. Moreover, recent cross-strait forums have even underscored the importance of cooperation in ensuring nuclear safety. This highlights not only the increasing momentum in China and Taiwan to diversify their energy mixes, but also acknowledge the adverse transnational implications that these efforts might have – especially in light of the Fukushima disaster in Japan.  Given these growing efforts to enhance bilateral cooperation over energy resources, such instances could perhaps be a form of confidence building measure between neighbouring countries with sensitive traditional political security issues.

Ensuring energy sufficiency will continue to be an uphill task in much of East Asia. Nevertheless, such circumstances provide neighbouring states with the opportunity for cooperate and coordinate their energy exploration plans, on the existing limited sources of energy remaining. Taking a long term view for sustainable development is significant, not only in ensuring the sufficiency and sustainability of countries’ growth and development, but also provides an impetus to maintain cool ties when relations are strained.