Authors: Kevin X. Li; Mengjie Jin; Wenming Shi
Addresses: Department of International Logistics, Chung-Ang University, 84 Heuk Seok-Dong, Dong jak-Gu, Seoul, South Korea ' Department of International Trade and Logistics, Graduate School of Chung-Ang University, 84 Heuk Seok-Dong, Dong jak-Gu, Seoul, South Korea ' Department of Maritime and Logistics Management, Australian Maritime College, University of Tasmania, Launceston TAS 7250, Australia
Abstract: One of the key aims of 'the Belt and Road (B&R) Initiative' is national energy security for China. This paper investigates how the B&R Initiative can improve China's energy security through diversification of the energy mix, energy suppliers, transport routes and settlement currency. With those indicators, we quantify the enhancement of energy security after China adopted a diversification strategy under the B&R Initiative. To support the study, we also use financial portfolio theory as a management tool to increase the national energy security. The results of the study show that after China adopted the diversification strategy, the national energy security level increased. The major findings of this study are, first, China will be able to import more natural gas and oil from different countries along the B&R. Second, the number of energy suppliers will be increased by adding several countries along the B&R in Central Asia and Africa, thereby reducing the heavy reliance on the Middle East. Last, new pipeline transportation will diversify transport modes and reduce China's heavy dependence on the Malacca Strait, which was and is still by far the major oil and liquefied natural gas (LNG) transport route.
Keywords: diversification; energy importing strategy; energy security; energy shipping and trade; Belt and Road Initiative; China.
International Journal of Shipping and Transport Logistics, 2018 Vol.10 No.3, pp.335 - 354
Received: 22 Aug 2016
Accepted: 20 Jul 2017
Published online: 26 Feb 2018 *