Diversification as an energy importing strategy for China under the Belt and Road Initiative

One of the key aims of ‘the Belt and Road (B&R) Initiative’ isnational energy security for China. This paper investigates how the B&RInitiative can improve China’s energy security through diversification of theenergy mix, energy suppliers, transport routes and settlement currency. Withthose indicators, we quantify the enhancement of energy security after Chinaadopted a diversification strategy under the B&R Initiative. To support thestudy, we also use financial portfolio theory as a management tool to increasethe national energy security. The results of the study show that after Chinaadopted the diversification strategy, the national energy security levelincreased. The major findings of this study are, first, China will be able toimport more natural gas and oil from different countries along the B&R.Second, the number of energy suppliers will be increased by adding severalcountries along the B&R in Central Asia and Africa, thereby reducing theheavy reliance on the Middle East. Last, new pipeline transportation willdiversify transport modes and reduce China’s heavy dependence on theMalacca Strait, which was and is still by far the major oil and liquefied naturalgas (LNG) transport route