Energy Security and Japan-China Relations: Competition or Cooperation

This thesis examines how Japan and China have avoided an escalation of competition over energy resources, and instead developed cooperative arrangements, despite their large energy demand, mercantilist energy strategies, and mutual distrust. It argues that Japan and China have managed their energy competition, because they consider that maintaining stable Sino-Japanese relations is far more beneficial for both countries than escalating energy competition, which would be costly. In other words, China and Japan each conducts a cost-benefit analysis of its energy policy at each critical juncture, and acts according to this strategy. Each side considers factors such as the energy resources' contribution to national energy security, economic benefits and costs, and strategic implications. Moreover, the way China and Japan assess these factors is conditioned by the state of the bilateral relationship as well as outside actors such as public opinion and a third party. Changes in Tokyo and Beijing's cost-benefit analyses create possibilities of compromise by one side that could lead to cooperation, or alternatively could harden each side's position and lead to more competitive relations.;To test this argument, this thesis analyzes two case studies of Sino-Japanese energy competition: the routing of the East Siberia Pacific Ocean oil pipeline and the development of gas in the East China Sea. In the Russian pipeline case, Japan and China's energy security and economic calculations, as well as Russia's third party role were decisive in determining the outcome. In the East China Sea gas dispute, strategic calculations and domestic public opinion were the most important factors. The cases demonstrate that if Japan and China were to only focus on economic calculations, these energy competitions should be fast resolved. However, political and strategic calculations as well as domestic politics get in the way of both sides realizing that the energy resources in question are not worth fighting about. How Japan and China manage their energy competition, especially the East China Sea dispute, has important implications for their bilateral relations in the future as well as for the United States.