Sino-Indian Energy Cooperation in the 21st Century Sriparna Pathak Raimedhi, Observer Research Foundation, 20 Rouse Avenue Institutional Area, New Delhi 110002, India

Introduction Interdependence, globalisation- states being inextricably tied together Self reliance as the key, global economies have become more interdependent India and China as key players in the 21st century, economic complementarities between the two Both net importers of energy, more to gain through collaboration and interdependence China: access of markets for selling energy sources/ India: uninterrupted supplies of energy for sustained economic growth

Structure of paper Introduction Transactional Cooperation Strategic Cooperation in Supply Chains Global Partnerships- The Potential for Co-Investments Conclusion

Transactional Cooperation Both offer each other large markets, industrial bases, which can be cross leverages to enhance supply cooperation Equipment supplies, capital and manpower can create resilient market linkages

Solar and Wind Energy China Mfg capacity>domestic demand Solar energy mfg capacity 70 GW (2012), domestic demand 31 GW Need for solar and wind market overseas Provided USD 40 billion to overseas industries Govt policies/SOEs India Massive solar potential, estimated at 20-30 MW per sq. km of land 12th FYP aims at installing 10 GW of solar power Can help revenue generation for Chinese firms Economies of scale

Existing power supply agreements Company Name Lender Bank Amount Year Reliance Power Ltd. CDB, BOC,ExImBOC US$1.1 billion 2010 Reliance Comm Ltd. CDB, ICBC US$ 1.93 billion 2011 Reliance Comm. Ltd. CDB,ICBC,ExImBOC US$ 1.18 billion 2012 Lanco CDB US$2 billion Essar CDB,PetroChina US$ 1 billion 2013

India’s infrastructure: attractive sector for foreign direct investors, attractive avenue for Chinese Investment as India looks to spend US$1 trillion over the next five years. Half of this investment is expected to come from the private sector, as the GOI has announced a series of meaures to facilitate the investment

FDI Inflows from China Total FDI FDI from China % Rank Sectors Cos US$191.76 billion US$244.76 million 0.13 31st Automob,Metallurgy,Pow,Construction,Services Beiqi,Baosteel,ZTE,Shanghai Elec,TBEA Shenyang,Chenguang Bio-Tech

Lot of potential for further Chinese FDI inflow Civilian Nuclear energy:India’s integrated energy policy- nuclear energy development plans of the Indian Govt. contingent upon import and subsequent indigenisation of LWR technology. China National Nuclear Cooperation: multiple designs for LWR and could consider technological development in cooperation with stakeholders in India.

Strategic Cooperation in Supply Chains Both have multiple state oil companie, overseas investment: integral to both for energy security Both: targeting same assets in the same host countries Ex of energy assets acquired by the two: Peru, Syria, Sudan, Columbia and Iran Both CNPC and ONGC have expressed interest in constructing an oil pipeline from South Sudan to Kenya’s East African coast to bypass the traditional export route through the north. IAEA projection: Asia will soon account for up to 90% of oil exports from West Asia; China and India will account for the largest shares Objective: create globally competitive value chains by facilitating trade and investment

Global Partnerships- Potential for Co Investments Overseas investments: potential for commercial cooperation African continent: case for cooperation Telecommunications, food processing, manufacturing, infrastructure, tourism, bank offices services, etc. Chinese and Indian MNEs increasingly in joint ventures with African firms foster exports from Africa to a wider set of markets located outside the African continent.

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