China has developed sophisticated hedging strategies to insure against
risks in the international petroleum market. It has managed a growing
net oil import gap and supply disruptions by maintaining a favorable
energy mix, pursuing overseas equity oil production, building a
state-owned tanker fleet and strategic petroleum reserve, establishing
cross-border pipelines, and diversifying its energy resources and
routes.
Though it cannot be "secured," China's energy security can be "insured"
by marrying government concern with commercial initiatives. This book
comprehensively analyzes China's domestic, global, maritime, and
continental petroleum strategies and policies, establishing a new
theoretical framework that captures the interrelationship between
security and profit. Arguing that hedging is central to China's
energy-security policy, this volume links government concerns about
security of supply to energy companies' search for profits, and by
drawing important distinctions between threats and risks, peacetime and
wartime contingencies, and pipeline and seaborne energy-supply routes,
the study shifts scholarly focus away from securing and toward insuring
an adequate oil supply and from controlling toward managing any
disruptions to the sea lines of communication. The book is the most
detailed and accurate look to date at how China has hedged its energy
bets and how its behavior fits a hedging pattern.
