The potential of energy cooperation between China and Australia under the Belt and Road Initiative

Abstract While there is a proliferation of studies on China’s Belt and Road Initiative (BRI), there is a gap in the literature in terms of an exploration of the costs and benefits from the perspective of the energy sector, in both the areas of sectoral development and energy transition. This paper uses Australia as a case study. The paper is the first to quantify the impact of the BRI in the energy sector, and the analysis informs the current debates on the BRI in Australia. We find that energy cooperation under the BRI enhances the performance of energy companies, but the Chinese energy investment in Australia faces mounting challenges. We suggest some areas for cooperation and such cooperation could be extended to third countries. Amid the increasing trade and political tensions, the two countries need continued, level-headed discussions and debates about the potential cooperation areas at all levels.