over whether the subregion is ripe for rivalry is premature, one over whether it is
ripe for continued peaceful development may be entirely appropriate.
What is the future of China’s relations with its neighbors to the south and the
east? The answer depends on five sets of considerations that will be examined in
turn: China’s growing energy demand and the centrality of the SCS (South
China Sea) as a potential source of resources, or of myriad problems, for Beijing;
the significance of the SCS as a source of both cooperative and conflictual
relations among the major actors; China’s attitudes and policies toward Southeast
Asia, and the larger context of its overall disposition toward territorial disputes/
compromise and the use of force; China’s growing naval power; and Southeast
Asia’s responses, political and military, to the rise of China and associated issues.
This chapter argues that while just a few years ago most analysts could find little
cause for concern, a combination of new factors and complacency makes
this subregion an area to watch for potential conflict over the medium term.
In particular, a powerful China free of its Taiwan problem will present unique
problems for Southeast Asia.China’s Energy Problem and Southeast Asia’s Unique Position
China’s oil demand doubled between 1995 and 2005 to nearly 7 million
barrels per day (bbl/d), making China the world’s second largest consumer of
oil after the United States (at 21 million bbl/d). This doubling came as a sur-
prise to most analysts, as well as to many Chinese policymakers. Natural gas
consumption has increased and is projected to continue increasing at similar
rates. China’s increased demand for all kinds of energy—the result of dramatic
growth in construction and road transport—is responsible for more than half
of the world’s increase in energy demand from 2000 to 2004 alone. Current
Chinese oil imports stand at 4 million bbl/d. Given GDP growth of around
7 percent for the next fifteen years, China’s imports are expected to be around
7 million bbl/d by 2020 out of total consumption of 13 million bbl/d. China’s
share of world oil consumption will rise from 8 percent today to 11 percent in- At between 2.1 and 3 billion tons of oil equivalent (usually expressed as
2,100 million tons of oil equivalent, or Mtoe), its total energy use will exceed
that of the European Union; by 2030 it should exceed that of the United States
and Canada combined.^1
The further urbanization of the country; the proliferation of factories, office
buildings, and residential construction; and the rise in the number of automo-
biles from the current 13 million to perhaps 160 million by 2020, all suggest
the growing importance of energy security in Beijing’s foreign policy. Energy
security may be defined as ‘‘the security of having an adequate supply of energy,
at reasonable and stable prices, aimed at sustaining economic performance and
growth,’’ and Chinese leaders are concerned for a number of reasons.^2 Above
170 Asia Looks Seaward