Energy insecurity in China

China is getting more reliant on energy imports despite efforts to switch to a low-carbon economy. This becomes apparent when looking at current data in terms of oil consumption and imports; both increased in the first five months of 2011 as compared to 2010.

In detail, China consumed 10.3% more oil in the first five months of 2011 that it had during the same time period in 2010 and oil imports rose 11.3% in the same time span, pushing China’s dependence on imported oil to 55.2%. barrel.gif

According to the Ministry of Industry and Information (MIIT) China’s oil dependence was only 33% in 2009. China’s economic development has largely relied on energy-intensive industries, and World bank data shows this fact clearly in plain numbers. Between 2006 and 2008, China’s GDP per unit of energy use (Purchasing power parity GDP per kilogram of oil equivalent of energy use) has increased from 3.3 (2006) to 3.5 (2007) to 3.6 (2008). To understand how energy intensive China’s economy is one only needs to look at other countries, for example Denmark, where GDP per unit of energy use is 9.9 in 2008. Startling is also what Hong Kong SAR, China, achieves: 19.5 (2006) 19.3 (2007) 20.0 (2008) GDP per unit of energy use.

This data indicates very plainly that an increase of GDP in China is dependent on a lot more (fossil) energy as compared to other national economies. “China is witnessing growing need of crude oil during its development of urbanization and industrialization,” said Tong Xiaoguang, a researcher with Chinese Academy of Engineering. Tong also predicts an further increase of China’s dependence on imported oil, which could reach 60% by 2020 and 65% by 2030. factory.gif

The problem with this is that a country relying so heavily on imported energy for its growth is vulnerable to oil price fluctuations and shortages. This is part of the reason why China is really pushing for the exploitation of all renewable energy sources within its boundaries. If China wants to reduce its energy insecurity without increasing the national energy mix’ share of coal, it needs to accelerate the development of renewable energy technologies. But this alone will not be enough; China also needs to de-couple economic growth from oil consumption. A shift towards a low-carbon economy consists from several measures, one of them being energy efficiency, especially in the industry. Also a better educated population will aim to work in fields such as services, trade, finances and tourism and thus create value without high energy consumption. At the end of day a share of China’s  huge workforce will stay in the industry and there really is no way around a more efficient, more conscious use of imported, fossil energy.

Decoupling economic growth from energy consumption has many benefits, some of them being a less polluted environment and better health prospects as well as the creation of more quality jobs and more (energy) security. It is also an important  step towards climate change mitigation.

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