Why Does China Want an Expanded Tanker Fleet?
China’s share of total world oil consumption is set to more than double in
the next fifteen years. For the foreseeable future, moreover, China will receive
most of its imported oil by sea, notwithstanding a much-touted new pipeline
originating in Kazakhstan and similar pipelines planned for Russia. Driven
by feelings of energy insecurity, China’s leadership desires control over the
entire oil supply chain in order to guarantee the nation’s oil supply during times
of crisis.^6
Accordingly, Beijing advocates building a national tanker fleet capable of
hauling up to three-quarters of Chinese oil imports by 2020.^7 In August 2003,
the Chinese government established a ‘‘tanker working group,’’ providing a clear
sign that the fleet buildup enjoys high-level support.^8 By 2010, China intends to
transport 40–50 percent of its oil imports in PRC-flagged tankers. By 2020, it
hopes to carry 60–70 percent.^9 Chineseanalystspredictthatthecountrywill
need more than forty VLCCs (very large crude carriers) by 2010, each of which
can carry 1.5 million or more barrels of oil.^10
The tanker-fleet buildup is driven to some extent by security concerns, but its
biggest effects will be on the commercial side. As Chinese shipyards produce an
increasing number of VLCCs, this will affect both shipping rates and the ship
market itself.
China aspires to be the number one global shipbuilder by 2015. Its plans
for doing so are laid out in official policy statements and are rapidly being
implemented.^11 South Korea in particular faces a major competitive threat from
Chinese tanker builders hungry for work. Figure 6.1 shows global long-haul
tanker builders with total orders exceeding 2 million DWTs’ (deadweight tons)
worth of shipping. It also depicts these firms’ home countries’ total share of
new construction for global long-haul tankers.
The Malacca Dilemma
The ‘‘Malacca Dilemma’’ lies at the heart of Chinese security analysts’ feelings
of oil insecurity. Chinese analysts believe that whoever controls Malacca also
controls China’s oil security, since more than 90 percent of Chinese oil imports
pass through Malacca. They fear that these bottlenecks could be easily closed
by terrorism, piracy, or the navies of the United States or regional powers in
the event of a conflict over Taiwan or some other serious Sino-American crisis.
They believe that China’s inability to secure the Strait would be ‘‘disastrous’’ for
national security.^12
InChineseeyes,theU.S.NavyisnottheonlythreattoChina’smaritime
energy supply lines. Chinese planners worry that the rapidly modernizing Indian
Navy could use its naval superiority vis-a`-vis China in the Indian Ocean to gain
strategic leverage.^13 Beijing also casts a suspicious eye on the Japan Maritime
An Oil Armada? 113