Governing China’s Energy in the Context of Global Governance

This article seeks to understand what role China can and will play in global energy governance by examining how its domestic energy context shapes the country’s attitudes toward the multilateral, market and climate change aspects of global energy governance. It finds that China demonstrates a preference for bilateral/regional to multilateral energy institutions, exhibits an inclination to blend state and market when pursuing energy security, and shows a principally consistent but pragmatically flexible approach to global negotiations on climate change. Contrary to the conventional wisdom, China’s engagement with the international energy order suggests that a rising and energy-hungry China has not and is unlikely to upset the very system that has benefited and will continue to benefit the country. Instead, this article argues that China has shown signs and promises of contributing to global energy governance by offering financial, technical solutions and stimulating the world to develop clean energy. However, energy governance in China has experienced considerable capacity decay in the era of reform and globalization. This decay not only bodes ill for the country’s ability to lead in global energy governance but also complicates international attempts to engage China on complex energy and climate challenges.

The fragmentation of the central government in China, together with the rise of substate actors and state-owned flagship energy corporations in the country’s energy governance, means that it is unrealistic to expect China to have a unified view and voice on global energy governance in the near term.
In light of the fundamental interests of China to engage the international system, the country’s absence from the world’s most important multilateral energy institutions says as much about its reluctance to join these restrictive organizations as these organizations’ lack of seriousness to engage China.
The blending of market tools to a state-dominated energy economy characterizes China’s state capitalism approach to addressing complex energy challenges and the country has largely exported this approach when it engages the international energy market.
China’s staunch positions on climate change bespeak its preoccupation with development, but its changing attitudes toward key issues in global climate negotiations reflect its flexible and pragmatic approach to development.
To seek effective participation from China in global energy governance, the international community cannot engage Beijing alone; instead, it must also engage local governments in China that have gained autonomy over energy affairs and those restructured and partially marketized energy SOEs that have exhibited entrepreneurship in shaping and implementing the country’s energy and climate policies.