China and South Asia: Energy Discourse and Dynamics

IMGXYZ2937IMGZYXChina and India’s remarkable economic growth over the past two decades has been accompanied by a corresponding surge in energy consumption. Both countries are pursuing ambitious nuclear and hydrocarbon programs, with domestic, regional, and global implications. The Carnegie-Tsinghua Center for Global Policy, in the third event in its China-South Asia Dialogue series, assembled three experts from China and India to offer their views on these trends. Kalyan Kemburi, a consultant for the James Martin Center for Nonproliferation Studies, assessed nuclear energy concerns in South Asia. Wang Haibin, an assistant professor at Tsinghua University’s School of Public Policy and Management, offered a comparison of China-India and China-Pakistan energy cooperation. Binod Singh, a lecturer at the Beijing Foreign Studies University, examined energy issues in South Asia. The event was moderated by Carnegie’s Lora Saalman.

Nuclear Energy in South Asia

Facing growing population and gross domestic product demands, India, Pakistan, and Bangladesh have sought to expand the coverage and sustainability of their energy supplies. Nuclear energy promises to be one of the most promising avenues for meeting these goals, argued Kemburi.

• Domestic Perceptions: The population in all three countries generally views nuclear energy positively, as a way to meet growing energy demands while serving as a symbol of national pride, said Kemburi. While there is widespread support in India to expand the use of nuclear energy, there is often resistance in regions where reactors would be constructed. In Pakistan, the impact of the sale of Chinese reactors to Pakistan has been criticized domestically as likely to play a “marginal” role in alleviating its energy crisis.


• Obstacles and Issues: All three countries face obstacles to their nuclear energy plans.
  
  
  • Bangladesh: Bangladesh lacks experience in maintaining nuclear reactors and, due to high population density, has few spaces where it could build a reactor.
  
  
  • India: In India, land acquisition is challenging due to archaic property laws. While overall views of nuclear energy are positive, a number of reservations still must be overcome. Kemburi pointed out that even with a 20-fold increase in India’s nuclear power capacity by 2032, its contribution to India’s energy mix would be less than 8 percent.
  
  
  • Pakistan: Pakistan faces concerns over the security of its nuclear power plants, including fail-safe safeguard mechanisms in securing fissile and radioactive material. Pakistan must also overcome greater constraints than India in gaining an exemption from the Nuclear Suppliers Group, due to its past proliferation record.
  
  
• China and South Asian Nuclear Energy: China envisions playing an increasingly significant role in South Asia’s nuclear energy industry, said Kemburi. It is already playing a limited role in developing Bangladesh’s nuclear program and has agreed to assist Pakistan with the construction of the Chashma-3 and Chashma-4 reactors. However, Kemburi emphasized that the clearest path for sustainable and less controversial cooperation on energy between China and the region is through a renewable technology partnership rather than through nuclear energy. Such a partnership would allow all parties to benefit from China’s overcapacity in producing renewable energy equipment. Since China is at the forefront of developing green technologies, there is a strong potential for cooperation between China and India, argued Kemburi.

China’s Energy Cooperation with India and Pakistan

Wang compared Sino-Indian and Sino-Pakistani energy cooperation, suggesting that while China engages with both countries, the nature of interaction differs greatly.

• Sino-Indian Competition: Even though cases of both cooperation and competition between China and India exist, the latter is more prevalent. In Africa and Central Asia, Chinese companies directly compete over exploration and production of energy resources with their Indian counterparts. This competition is sometimes encouraged by client countries, such as Sudan, whose desire to avoid excessive reliance on China led to India playing a role in Sudanese energy development.


• Sino-Pakistani Cooperation: Energy cooperation between China and Pakistan is mutually beneficial and welcomed by both sides. China assisted Pakistan in all of the phases of constructing the Chashma reactors. Unlike India, Pakistan lacks sufficient expertise in developing modern energy technologies, a gap that China appears willing to fill. Given Pakistan’s needs, the future of Sino-Pakistan energy cooperation is more promising than that between India and China, said Wang.


• Forced Energy Engagement: Wang argued that most cooperation between China and India on energy is unintentional. Both China and India are energy-hungry countries with similar needs. While Pakistan is also an energy importer, its energy demands are more limited than China’s, so it poses no substantial threat to China’s energy security. Moreover, a serious energy collision between Pakistan and China is less likely than a serious conflict between China and India, said Wang. When asked about possible cooperation between China and India, Wang responded that green technology remains the most promising area. Kemburi agreed, adding that during Chinese Premier Wen Jiabao’s December 2010 visit to India, the two countries signed green technology treaties that could help create positive energy relations between China and India.

India’s Energy Posture of the Present and Future

Singh offered an account of the current state of energy policy and resources in India, emphasizing the challenges and prospects for energy sector development.

• Challenges: India faces several challenges in its energy development:
  
  
  • Access to electricity: Infrastructure investment is critical to India’s future economic development and deserves greater attention, argued Singh. He said that while the Indian economy is expected to grow at 8.7 percent between 2010-2011, as much as 10 percent of the Indian population still lacks access to electricity. India needs as much as $150 billion in the next five years to meet its energy needs and maintain its economic growth; the country is currently the world’s fourth largest energy consumer and is projected to be the third largest by 2030.
  
  
  • Energy dependence: India largely depends on coal and oil for its energy needs, with approximately 60 percent of its oil coming from the often volatile Middle East.
  
  
  • Political control: One final challenge facing India’s energy sector is excessive domestic political control. Singh detailed a list of delayed, stalled, and defunct proposals—such as the Indo-Iran-Pakistan gas pipeline and India-Myanmar energy cooperation via Bangladesh—which show how domestic control has hindered India’s energy development.


• From Coal to Nuclear: India wants to increase its power availability from 80 watts per capita to 150 watts in the coming decade. Toward this end, it created the New Exploration Licensing Policy, which allows competitive bidding for exploration licenses. However, Singh argued India is too dependent on coal and imported oil. It is the third largest consumer of coal and the fourth largest consumer of crude oil globally. To mitigate this dependence, Singh argued that India should press forward on its rapidly advancing nuclear power program. While India is not a signatory to the Nuclear Non-Proliferation Treaty, Singh noted the U.S.-India Peaceful Atomic Energy Cooperation Act of 2008 serves as a means for India to access advanced nuclear technologies.


• Renewables as the Path Forward: Singh pointed out that India is the only country in the world with a ministry dedicated to renewable energy policy. It has made significant strides in energy developments, such as coal bed methane, underground coal gasification, national gas hydrate, and biodiesel programs. By 2012, India seeks to generate 10 percent of its electricity from renewable energy, with an emphasis on wind energy. Singh echoed other speakers in noting that the ability to harness green technology will play an important role in China and South Asia’s energy future.