20’th CCP National Congress Special Issue 04: China’s Strategic Energy Issues
Written by George Hahn
China’s Twentieth National People’s Congress’ Role in Energy Policy:
The recent 20th National People’s Congress suggested the importance of the state’s role in transitioning the country towards a green economy. The congress highlighted its plans to bolster its financing, resources, research, and conservation in the green energy sector. China currently pays close attention to the green energy sector in the new energy policy since it relates to China’s national security.
Green Energy and Strategic Policy:
Energy plays a pivotal role in China’s economic growth, indicated by its energy usage relative to the rest of the world. The strategic concerns have revolved around two realities: China’s inability to substitute energy imports with domestic suppliers and its dependence on countries they have strategic uncertainty, some of which were traditionally aligned with the United States. China consumed about 40% more in its primary energy in 2021. The country’s rapid growth in the secondary sector has concurrently increased energy usage in related industries. Coal and petroleum, respectively, accounted for 55% and 19% of energy consumption. Although China produces the bulk of its coal supply domestically, its petroleum is primarily supplied by OPEC states. The United States and Saudi Arabia are the two top producers of the global petrol supply, and China is the second largest oil consumer, revealing strategic concerns from a lack of diversity in its sources of energy. Since the Chinese economy relies disproportionately on traditional energy, Consequently, green energy is an option for developing energy independence. China’s strategy toward green energy development suggests a need to diversify its energy dependencies by moving away from relying on a small number of oil-producing states.
China’s shift towards key renewable industries will enable a diverse portfolio of upstream dependencies. China has invested heavily in key renewable sectors, increasing momentum to a different set of upstream industries. The state invested about 380 Billion dollars in clean energy in 2021, and, consequently, dominates key industries, including both the electric vehicles and solar panels industries, where they enjoy a large degree of market penetration. China controls about 56% of the world EV market share in the first half of 2022, which has been growing steadily towards the end of the year and simultaneously controls about 84% of the global solar panel production capacity. Both sectors of green energy source upstream industries from a variety of raw materials: many of which are in developing countries. Solar panels and Electronic vehicles and their component parts may strain the supply chains of some metals and rare earth minerals. Silver, Copper, Lithium, Cobalt, Graphite, and lithium are crucial components in the assembly of solar panels and electronic vehicles. China’s foreign direct investment in Africa peaked at about 46.1 billion, mainly in the primary sector, allowing for a secure flow of crucial commodities needed in green energy sectors. Since China’s current foreign investment patterns align with its commodity needs in the industry; Consequently, the Chinese economy can source commodities from countries which they have preexisting economic ties with. By shifting crucial sectors of its energy sector, China can diversify its dependencies, allowing the state to align its economy with its strategic agenda.
