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Security and Profit in China’s Energy PolicyHedging Against Risk$
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Øystein Tunsjø

Print publication date: 2013

Print ISBN-13: 9780231165082

Published to Columbia Scholarship Online: November 2015

DOI: 10.7312/columbia/9780231165082.001.0001

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Safeguarding China’s Seaborne Petroleum Supplies

Safeguarding China’s Seaborne Petroleum Supplies

(p.110) 5 Safeguarding China’s Seaborne Petroleum Supplies
Security and Profit in China’s Energy Policy

Øystein Tunsjø

Columbia University Press

This chapter focuses on the main transportation route for Chinese oil supplies: the maritime route. It first assesses the importance of energy security as a driver behind China’s naval ambitions. It then examines how China insures against potential disruptions to maritime oil supplies through a hedging and risk management strategy. It argues that China successfully hedges against insecurity in the availability, reliability, and affordability of adequate oil supplies not through the modernization of the PLA Navy (PLAN) but through the buildup of a state-owned tanker fleet, which, in a period of crisis short of a war involving China, should leave China relatively better off than other oil-importing countries.

Keywords:   China, energy security policy, Chinese navy, oil supply, hedging, risk management, tanker fleet, maritime route

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