In the strategically important and massive energy sector, trade and investment are two main focus areas of cooperation between China and countries involved in the ever-expanding Belt and Road Initiative.

Energy investment,on the other hand,takes the lion’s share of China’s investments in these countries,accounting for 40 percent of total investment.Russia,Southeast Asia,Central Asia and the Middle East are the major destinations for Chinese funds.

Energy cooperation has been undergoing two transformations.One is the cooperation in the transformation of oil and gas into electricity,and the other is that more countries involved in the initiative have started to make investments in China.

Promoting implementation of the Belt and Road Initiative and strengthening energy cooperation with countries along the route will provide new insights for China,to solve problems related to energy security,pricing power and the low benefits produced by its huge overseas energy assets.

They will also bring new development opportunities to the energy industry.

First of all,China’s imports of fossil fuels will be further secured,as countries along the routes have rich fossil fuel resources.China could enhance its mutually beneficial cooperation with these countries for their relatively cheap oil and gas,to increase the country’s crude oil strategic reserves.

Second,the structure of China’s primary energy consumption will be optimized. In 2016,the use of natural gas and other clean energy accounted for less than 20 percent of the country’s total consumption.Countries along the route have abundant clean energy resources such as biomass energy and wind power,as well as natural gas and uranium,a basic nuclear material.

Third,it will be more convenient for China to make overseas investment in energy projects.China has witnessed the increasing scale of related investments in foreign countries in recent years,returns of which,however,are generally low due to its weak control over these projects.Under the framework of Belt and Road Initiative,governments of involved countries could establish a more effective communications and coordination mechanism to ensure better operation of energy projects.

Last but not least,China will improve its position in the global energy market.The country always desired to raise its status in the world’s crude oil pricing system.Through the initiative,China could form new mutually beneficial pricing and settlement mechanisms together with oil-producing countries.

The energy cooperation community is a community with shared energy interests between China and countries involved in the initiative,which can provide higher level platforms and more convenient channels for energy cooperation.

Countries in the community can establish a high-level mechanism for negotiation and discussion,and make and implement related policies.Energy producers and consumers can establish a mechanism for fair and mutually beneficial dialogue,through which both sides can discuss and reach agreements on the price and scale of energy products.

These countries can also provide more convenient access and preferential policies for energy trade with each other, as well as reduce restrictions on energy investment and share the investment results and technological innovations in the sector. To build the energy cooperation community,China should accelerate its efforts to make a special strategy for the cooperation,further enhance the policy and financing support,and give full play to its advantages in the manufacturing industry to encourage energy companies to go global.The country should ensure the security of its four main energy imports channels and establish an instant-reaction alert system,in addition to fully understand the risks it may encounter during energy cooperation.