China’s Role in International Energy Governance

Since its establishment in the 1970s, the global energy market has gone through significant change while regulations have remained stagnant. The global energy market urgently needs systematic reform. Carnegie–Tsinghua’s Wang Tao hosted a discussion panel with Chinese experts to discuss China’s role in global energy governance reform. Experts came from China’s National Development and Reform Commission, the International Energy Agency (IEA), the China University of Petroleum, and the China National Offshore Oil Corporation.

Discussion Highlights

• Path Forward for Energy Governance Reform: Participants agreed that the current global energy governance framework needs reform but disagreed on the best path forward. The two main choices for reform were to update existing structures in government organizations like the International Energy Agency or to set up a new international governance organization. However, some participants responded that setting up a new institution is impractical.
   
• Deepening China-IEA Cooperation: Participants noted that even though China signed an allied agreement with the IEA, it is not an official signatory with the IEA and as such it is difficult for the two sides to engage in deeper cooperation. Some panelists pointed out that smaller European powers in the IEA oppose deepening ties between China and the IEA, for fear of diminishing their own authority in the organization.
   
• Resolving China’s Internal Struggles: China must first tackle domestic structural challenges before deepening cooperation with international organizations, participants said. After all, the IEA can only help China address its energy struggles in minor ways. One panelist pointed out that many Chinese experts overestimate the role of international mechanisms such as the IEA in resolving problems.  
   
• China’s Limited Capacities: Several participants explained that Western countries’ expectations for China’s role in global energy governance are too high. China faces significant challenges, such as insufficient capacity to regulate internally, a lack of a more defined energy strategy, and a lack of capable energy governance professionals. Participants agreed that this limits China’s capability to shoulder more responsibility in global energy governance.
   
• Possibility of an Asian Energy Union: Participants agreed that China should change its mentality regarding petroleum and see East Asia as an intermediary between the world’s petroleum-producing and petroleum-consuming countries by setting up an Asian regional energy union. The region both produces and consumes large quantities of world’s petroleum. An Asian energy union could position China to play a more active role in global energy security. 

Discussants Included: Tu Jianjun, Zha Daojiong, Wang Zhen, Yang Yufeng