Is the use of economic diplomacy within the energy sector mitigating or causing conflict in the Asia-Pacific? How is Australia poised to deal with its consequences?

In: http://hdl.handle.net/1885/14432

Open Access

Abstract

The possibility of Asia-Pacific nations going to war within the current regional security environment is a distant one. Despite fiery territorial disputes, the exchange of sharp rhetoric and even gunfire across borders, the opportunity costs of war at this stage render stability a collective interest for regional prosperity. Bilateral and multilateral relationships and institutions have been established in political, economic and social spheres of engagement and help to stabilise a region witnessing a turbulent restructuring of its power order. The Asia-Pacific is nonetheless host to a diverse collection of conflict. Development on a grand scale has pushed states like China and India into the limelight of the international political economy, and has delivered domestic legitimacy and political clout to their governments. The pressure on China to fuel growth of this kind, while maintaining their hold on a population of some 1.37 billion, has directed attention to its energy supply in the interests of national security. China's energy security policies have real economic and diplomatic resonance in the security framework of the Asia-Pacific. While the argument that increased reliance on trade relationships is acting as a successful proxy for diplomacy, China's aggressive pursuit of energy security in its trade relationships with producers is not mitigating conflict. It has been suggested that energy resource policy has enhanced the relationships between key stakeholders in state and corporate echelons, but has not translated to peaceful engagement on the domestic and civil levels. Dr Edward Aspinall, political analyst at the Australian National University, has suggested that China's behaviour in the energy sector has exacerbated existing conflict and endangered the livelihoods of regional populations. By widening gaps in wealth distribution and drastically altering the environment through mining and associated infrastructure, the quest for energy security is aggravating other sources of regional instability. There are four facets of economic diplomacy currently at use that directly impact on the Asia-Pacific energy sector: trade, investment, acquisition and markets/finance. When considered collectively, they map out the security concerns and future directions of the region's most influential powers, namely the governments of China, Japan, India, the Koreas and the United States. They also illustrate the burgeoning role energy corporations have in the relationships between importer and producer countries, and their influence on economic diplomacy. China's current behaviour in the energy sector and its effects are inseparable from the security of the region. Concordantly, this paper focuses on how China's economic diplomacy presents in the four facets above, and what this means for the region's stability. It is important for Australia and other Asia-Pacific powers to activate forethought in their engagement with China within the energy sector. They must balance short and medium-term economic interests with energy scarcity, market instability and domestic interests. Australia in particular, must maximise its position as a primary energy resource exporter to the region, to effectively diversify energy dependence and bring the region back from the consequences of a looming energy shortage. Without a change of course, the flame of peace and prosperity enjoyed for so long in the Asia-Pacific is setto burn out, or be extinguished. If this occurs, there will be scant light to shed on the future security of the region.