Jian, Zhang

Summary
The global financial crisis enhanced and hastened China’s rise in the international market. For example, China has increased its imports of energy resources in the wake of the crisis, and half of the oil that China consumes comes from foreign sources – especially from countries in the Middle East, Africa, and Central Asia. China must search continuously for solutions to its problem of rising energy demand.
In addition to importing oil from abroad to meet domestic energy demands for the short term, Chinese enterprises have also been investing directly in foreign firms to assemble long term and more secure energy supplies. These enterprises have engaged in acquisitions and mergers, and portfolio investments such as foreign bonds, stocks, and financial derivatives.
The impact of the recent global financial crisis, as well as turmoil in many parts of the Middle East and North Africa in early 2011, have caused Beijing to further realize the importance of energy source diversification, the linkage of fiscal and monetary policy with energy policy, especially monetary policies that relate to international energy commodity trading, equity markets, and financial markets. Japan’s recent nuclear crisis caused China to temporarily halt its nuclear development plans and reconsider nuclear safety issues and future nuclear development strategy. Major changes to the nuclear development strategy would most likely increase China’s need for oil.
Energy security is dynamic, uncertain, and full of risk. Moreover, it is no longer one single country’s issue, but is a global economic security issue. Global energy prices influence every corner of the world economy. Because of global diversity and the range of complex factors that influence global energy security, it can only be achieved via a relative balance between geopolitical power and soft power on the one hand, and hard power on the other. This implies, among other things, that a solution to China’s domestic energy shortage cannot rely just on an energy usage policy in the narrow sense, as China has traditionally employed. Rather, energy security for China will require the integration of energy policy with macroeconomic policy – such as fiscal and monetary policies – and foreign policy, as well as international cooperation.
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