Marketization and China's energy security

Abstract

Marketization of the petroleum industry is part of China's efforts to construct a market economy. This has provided strong incentives for national oil companies (NOCs) to seek their commercial interests. Nevertheless, marketization of this industry is only partial. What impact does the partial marketization have on China's energy security against the backdrop of its growing reliance on foreign energy resources? This paper argues that China is plagued by two paradoxes when dealing with its energy security problems: between state centralism and market domination, as well as between state control and NOCs’ struggle for greater autonomy. Both paradoxes stem from the government's distrust of the market and the multi-faceted goals that it has set for the petroleum industry. The government's high expectation of the NOCs enhancing China's energy security with their oligarchic monopoly rights could prove to be a little far-fetched.