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China Prioritizes Short-Term Energy Security: Implications for Sino-Middle East Relations

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By John Calabrese

· 20 min read

Volatile energy markets have pushed fossil fuel prices to multi-year highs. In China, concerns around energy security, namely supply security and affordability, have risen to the top of the policy agenda.[1] Heightened awareness among Chinese decision makers of the risks from a chaotic energy transition has bolstered their determination to manage its pace, that is, to find a balance between ensuring energy security and limiting carbon emissions.

Under multiple scenarios, China’s primary energy consumption is projected to rise in the short term before declining post 2040.[2] China will come under renewed pressure ahead of COP27 in Egypt later this year to again consider what more it can do this decade to reduce emissions. For now, however, facing strong economic headwinds, fraught relations with the West, persisting Covid-related lockdowns, and rising inflation, Beijing is prioritizing short-term energy security.[3] By putting energy security first while doubling down on renewables, China will continue to rely heavily on fossil fuels, including large volumes of oil and increasing quantities of gas, much of it delivered in seaborne cargoes that originate from the Middle East.

Lately, a great deal has been said and written about China’s ambitions and inroads in the Middle East and North Africa in the context of incipient great-power rivalry. Far less attention has been devoted either to China’s heavy dependence on the region’s hydrocarbons and associated energy security concerns or on the degree to which its Middle Eastern partners, especially the oil- and gas-producing countries among them, have come to rely on the Chinese energy market to sustain, grow, and diversify their economies.

This article provides an opportunity to refocus attention on the precipitating conditions and broad outlines of China’s energy security strategy, and by doing so reveals the structural underpinnings of Sino-Middle Eastern relations at a time when both sides are wrestling with the challenge of reconciling energy security and carbon neutrality.

China between decarbonization and disruption

China, by far the world’s biggest greenhouse gas emitter, is itself acutely vulnerable to the effects of climate change.[4] The Chinese leadership, which acknowledges climate change as real and that the country is highly exposed to its adverse consequences, has set ambitious goals for “green development.”[5] In a pre-recorded video address to the UN General Assembly on September 21, 2020, President Xi Jinping announced that China would strive to reach peak carbon emissions by 2030 and carbon neutrality by 2060.[6] China’s 14th Five-Year Plan (FYP 2021-2025) recommitted the government to “formulate an action plan for peaking carbon emissions before 2030” and to “anchor efforts to achieve carbon neutrality by 2060.”[7]

Earlier this year, the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6) on how to tackle climate change highlighted the need for China to accelerate its transition towards clean and low-carbon energy.[8] But meeting China’s net-zero emissions target will be challenging, given the continued dominance of fossil fuels in the country’s primary energy mix, as well as Beijing’s responses to heightened energy security and power shortage concerns.[9]

Over the past three decades, China’s energy needs have dramatically expanded, driven largely by energy-intensive industrialization and urbanization.[10] Despite the remarkable development of renewables in China since 2000,[11] the country remains heavily reliant on fossil fuels.[12] In 2020, fossil fuels accounted for 85% of China’s total energy consumption — coal for about 60% and oil for roughly 20%. In 2021, the share of coal and gas in power generation was 71%.[13]

Facing old and new energy security risks

In pursuing carbon neutrality, China faces the challenge of ensuring energy security while shifting away from fossil fuels. Lately, however, familiar and as well as new energy security risks have complicated China’s efforts to overcome this challenge, including those associated with the country’s heavy reliance on foreign supply sources of the fossil fuels it consumes. [14] Although China mines most of the coal it uses, imports nonetheless account for about 8% of total coal consumption.[15] Last year, China’s dependence on crude oil imports stood at 72%, while reliance on natural gas imports climbed to 43%.[16] And China’s coal imports reached their highest level since 2013, roughly a quarter of the world total.[17]

The fact that China’s fossil fuel imports originate from politically unstable regions and must traverse narrow straits and contested waterways continues to be a source of great concern to Chinese decision makers despite the various measures they have taken to ensure supply security.[18] The most vulnerable energy supply is oil, for which the country relies heavily on seaborne delivery. This risk exposure will persist, as China is expected to remain heavily reliant on seaborne crude oil, and to a lesser extent, liquefied natural gas (LNG) supplies for the foreseeable future.[19]

A recent chain of unwelcome developments has intensified the Chinese government’s focus on energy security issues. Beijing’s de facto ban on Australian coal imports in October 2020 as punishment for Canberra’s call for an international investigation into the origins of the coronavirus pandemic backfired, as months later, China, facing power shortages, struggled to increase purchases from alternative suppliers.[20] Indonesia’s unanticipated month-long suspension in January 2022 of thermal coal exports in order to divert supplies to domestic utilities fueled uneasiness in Beijing regarding longer-term supply security.[21] An unprecedented wave of unrest in Kazakhstan, also in January, raised questions in China about its neighbor’s future reliability as an oil and gas supplier and transit country, though the turmoil did not immediately affect Chinese energy interests [22]

Although Beijing remains concerned about the country’s susceptibility to exogenous shocks triggered by events in supplier countries, it is the United States that has emerged as China’s biggest geopolitical source of energy insecurity.[23] In the context of strained relations with the US, Chinese apprehension about the vulnerability of sea lines of communication, which are intimately related to energy security, has risen.[24] So, too, has concern about Chinese energy companies’ exposure to US-led trade and financial sanctions[25] as well as about American attempts to block the introduction of key energy technologies and core oil and gas equipment, which could jeopardize projects already in place or under negotiation with countries along the Belt and Road.[26] Similarly, the US warning of unspecified consequences if Beijing helps Moscow evade sanctions raises the risk that Chinese companies might face punishment for such actions.[27]

Meanwhile, the Chinese government has also had to contend with energy price volatility and domestic power shortages — challenges that have been compounded by the country’s continued heavy reliance on imports for access to primary fuels. Since the onset of the Covid-19 pandemic, the oil market has been gripped by violent price swings. Current low oil inventory levels have driven up oil prices and amplified the potential for oil price volatility. Unstable supply and demand have likewise caused natural gas and coal prices to surge. As a result, China has felt the ‘price pain.’ In 2021 China imported $366 billion worth of energy commodities, a 50% increase year-on-year largely due to higher global oil and gas prices,[28] and saw its import bill for coal spike as well.[29]

Last fall, with natural gas and coal prices at record-high levels, China plunged into a months-long electricity supply crisis that exposed the vulnerabilities of the country’s power sector. Just weeks ahead of the climate summit in Glasgow, China was hit by a wave of blackouts and forced load-shedding[30] resulting from a combination of strong demand, weak coal production, high coal prices, and coal pricing restrictions.[31] The outages, which revealed a breakdown in policy coordination,[32] caused many local governments to ration electricity to stay within their full-year quotas.[33] As China’s power crunch rippled across the economy, it laid bare and further complicated Chinese leaders’ efforts to juggle the competing priorities of ensuring economic stability and growth on one hand and pursuing decarbonization on the other.

Balancing economic and environmental security

Facing blackouts, soaring prices of fossil fuels, and heightened geopolitical tensions, the Chinese leadership has made it clear that domestic energy security and economic development take priority, even as the country pursues a green transition.[34]

The Chinese government increasingly views a stable energy supply as important to maintaining growth and employment.[35] In 2020 the CCP Politburo outlined “six guarantees” for achieving economic stability, with safeguarding energy security listed as a top priority.[36] Chinese authorities also devoted a section of the communiqué for the 14th FYP to the energy security-economic nexus.[37]

China’s overarching guideline is to transform energy “in an orderly manner.”[38] The “Working Guidance”[39] and “Action Plan,”[40] which form the basis of the policy framework for reaching the country’s carbon reduction targets, emphasize the need to balance the efforts to reduce emissions with the need to ensure the security of energy.

As a practical matter, Beijing has come to recognize that coal remains a key energy source that must be replaced by renewables gradually.[41] The 14th FYP, which names coal as “the backstop of supply security,” states that China will continue advancing the energy transition, but not at the expense of supply security.[42] During the “two sessions” plenary meetings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference, Xi Jinping reinforced the direction that coal would be the “mainstay” of the nation’s energy mix and asserted that, based on China’s “national reality,” coal’s role “would be hard to change in the short term.”[43] The impact of Russia’s war against Ukraine on energy markets has, if anything, accelerated Chinese plans to return to the use of coal for power generation.[44] [45]

In the context of soaring coal prices and geopolitical instability, China’s National Development and Reform Commission (NDRC) mandated that power companies build stockpiles by shunning expensive seaborne cargoes in favor of entering long-term contracts with domestic sources.[46] In March, Zhang Jianhua, Director of the National Energy Administration (NEA), said the agency would ramp up oil and gas production as well.[47]

The concern that prioritizing energy security and reliability of supplies in this manner will impede China’s rapid progress toward the phase out of fossil fuels is by no means misplaced. But to conclude that Beijing has ‘rethought’ its commitment to decarbonization seems unlikely — some would say, “unfounded.”[48] China’s decision to “phase down” rather than “phase out” coal should not be taken as indication that Beijing is ignoring the climate crisis or has fundamentally changed course.[49] Even as China has ramped up consumption of fossil fuels, government officials released another FYP outlining a roadmap for innovation in the energy sector. China also issued plans on new energy storage and hydrogen, both of which could eventually displace coal as cleaner means of flexible power if they grow to scale.

Furthermore, China remains officially committed to ensuring that its grids source about 33% of power from renewable sources by 2025.[50] Though the proceedings of the Two Sessions meetings emphasized the continued reliance on fossil fuels in the short- and medium-term, they also reaffirmed that renewable energy will remain a national priority in parallel.[51] The National Energy Administration has called for both strengthening energy reserves and preparing China’s energy sector to transition to more non-fossil energy sources.[52] According to estimates from the International Energy Agency (IEA) and Carbon Action Tracker, China is on pace to meet its 2030 peak emissions target.[53] Some projections show China is likely to overachieve its renewables installation and non-fossil energy targets.[54]

Implications for Sino-Middle East energy relations

The combination of supply-demand and geopolitical dynamics roiling energy markets has led Beijing to prioritize energy security over climate action. In practical terms, Beijing’s short-term emphasis on ensuring energy supply and boosting growth means that China will remain as tethered to fossil fuels and as heavily reliant on foreign supplies as ever, even while continuing to add more renewables to the primary energy mix than any other country.

The complex set of circumstances that have brought China to this juncture and the policy direction Beijing has charted in response to them implicates Sino-Middle Eastern relations in various ways. But it is the energy dimension of relations between China and Gulf oil and gas producers that deserves particular attention.

The price volatility of the past several years has of course affected China and its Gulf suppliers differently. Whereas the current tight global supply and elevated price environment has resulted in a financial windfall for Middle East producers, it has caused China’s import bill to balloon and exerted pressure on downstream users.[55] Nevertheless, Sino-Middle East trade in crude oil held steady despite the disruption caused by the Covid-19 pandemic,[56] and the Middle East’s share of the Chinese market increased in 2021.[57]

Fresh disease outbreaks and lockdowns in China continue to weigh on Chinese oil consumption and crude oil imports[58] — introducing a level of uncertainty that Middle East producers perforce must live with. While weaker than expected Chinese demand presents one set of potential complications for Middle East suppliers, an unanticipated surge in demand in the coming months, under current supply constraints, could place the global economic recovery at risk. Given the massive size of China’s oil import requirements, even small adjustments in its oil demand have big ramifications for suppliers. Thus, each side of the Sino-Middle East energy supply-demand relationship is susceptible to market uncertainty that the other is partially responsible for creating.

Despite an otherwise tumultuous global economic and geopolitical climate, Sino-Middle East energy interdependence remains structurally intact. Ironically, though unavoidably, the policy direction that Beijing has chosen to address its energy risk exposure over the short- and medium-term has reinforced, rather than attenuated energy ties to the very region with which multiple sources of its insecurity are associated — a reassuring development for the region’s energy producers, which look to China to continue serving as a ‘demand anchor’ and key enabler of efforts to diversify their economies.

However, this mutual dependence has not prevented either China or its Gulf partners from making opportunistic tactical adjustments to advance their own interests. In recent months, for example, China has ramped up purchases of Russian oil at bargain prices, undercutting already steeply discounted oil from Iran, which subsequently slashed prices further.[59] This dynamic has caused some uneasiness among other Gulf producers, wary of their competitors gaining a stronger foothold in the highly prized Chinese market.[60] It also appears to have led to some nimble counter-measures. Seemingly confident in the future demand outlook, Saudi Arabia — the largest source of China’s crude imports in 2021[61] — opted to ship lower-than-nominated crude oil volumes for July to some buyers in China — the destination for about a quarter of Saudi crude exports[62] — while fully supplying its non-China Asian customers at higher prices.[63]

Trade and investment activities in the oil and gas sectors form the bedrock upon which Sino-Middle Eastern have been built over the past three decades — and look to remain critical ingredients of both sides’ efforts to transition to green, carbon-neutral economies. China and its Gulf partners alike have come to accept that the transition to a green energy global economy is inevitable. But as recent events in and related to China indicate, the process of shifting to sustainable, renewable resource-based economies will take decades to complete. And there is little chance that the transition will be altogether clean. For this reason, complex energy interdependence — anchored in crude oil and increasingly in LNG trading[64] but extending to petrochemicals production,[65] as well as the development and deployment of renewables,[66] and possibly hydrogen[67] — frames the future of China-Middle East relations as both sides, through forging links between their “all-of-the-above” energy strategies, strive to achieve sustainable economic growth.

This article is also published on the Middle East Institute. Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Energy & Sustainability writers, their opinions do not necessarily represent those of illuminem.


[1] See, for example, “Central Economic Work Conference held in Beijing,” People’s Daily, December 11, 2021,

[2] “Insights from the Accelerated, Net Zero and New Momentum scenarios – China,” BP Energy Outlook (2022),

[3] Max Tingyao Lin, “China prioritizes short-term energy security and economic stability over decarbonization,” S&P Global Commodities Insights, March 11, 2022,; and Lingling Wei, “China Looks to Secure Supplies as Strains With U.S. and Its Allies Grow,” Wall Street Journal, January 13, 2022,

[4] “Beijing’s response to IPCC report; Climate ‘blue paper’; Coal price rises,” Carbon Brief, August 12, 2021,

[5] Anna Holzmann and Nis Grünberg, “’Greening’ China: An analysis of Beijing’s sustainable development,” China Monitor, January 7, 2021,

[6] See UN News, September 21, 2020,

[7] “The 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and Outline of the Vision for 2035,” Xinhua, March 12, 2021,

[8] Intergovernmental Panel on Climate Change (IPPC), Climate Change 2022: Mitigation of Climate Change, April 4, 2022,

[9] Charles Kennedy, “China Scrambles To Ensure Energy Security As Commodities Soar,”, March 7, 2022,

[10] Demand for electricity in China in 2020 was more than five times its level two decades earlier; and electricity consumption rose by 10% in 2021 over the previous year. See:

[11] In 2020, China’s cumulative installed wind and solar capacity accounted for a 38.5% and 35.9%, respectively, of the world total. Hannah Ritchie and Max Rosen, “Renewable Energy,” Our World in Data,

[12] International Energy Agency (IEA), “An Energy Sector Roadmap to Carbon Neutrality in China,” September 29, 2021,

[13] “China Remains as Reliant as Ever on Fossil Fuels,” Bloomberg News, January 18, 2022,; and BP Statistical Review of World Energy – 2021, “China’s Energy Market in 2020,”

[14] International Energy Agency (IEA), “Oil, gas, and coal import dependency in China, 2007-2019,” December 18, 2020,

[15] Indonesia and Russia account for four-fifths of China’s coal imports, with Australia and the United States supplying most of the rest. See: IEA, “An Energy Sector Roadmap to Carbon Neutrality in China” (September 29, 2021): 23,; and Christopher Bassler and Ben Noon, “Mind the Power Gap: The American Energy Arsenal and Chinese Insecurity,” especially chapter 3, Center for Strategic and Budgetary Assessments (CSBA), 2021,

[16] Zheng Xin, “China’s oil dependence on imports sees drop,” China Daily (February 24, 2022),

[17] “China Dec coal imports fall, 2021 imports highest since 2013,” Reuters, January 14, 2022,

[18] Such measures have included forging “equity oil” and “loans-for-oil” deals, diversifying both suppliers and routes, building up the domestic tanker fleet, and constructing a strategic petroleum reserve (SPR).

[19] Gabriel Collins, “China’s Energy Import Dependency: Potential Impacts on Sourcing Practices, Infrastructure Decisions, and Military Posture.” Prepared testimony before the U.S.-China Economic and Security Review Commission (USCC), March 17, 2022,

[20] Clyde Russell, “Column: China is paying a high price for its ban on Australian coal,” Reuters, April 9, 2021,

[21] Amy Gunia, “China Is Finding Fewer Reliable Sources of Coal. That Could Be Bad News for the Climate,” Time, January 12, 2022,

[22] Liu Zhihua, “Kazakhstan situation stirs energy security talk,” China Daily, January 8, 2022,; and “China offers Kazakhstan security support, opposes ‘external forces,’” Reuters, January 10, 2022,

[23] Michal Meidan, “China’s Energy Security at 70,” Oxford Institute for Energy Studies, October 2019,

[24] Michael Pillsbury, “The Sixteen Fears: China’s Strategy Psychology,” Survival: Global Politics Strategy 54, 5 (2012): 152-153.

[25] Chen Aizhu, “Exclusive: PetroChina may sell Australian, Canadian assets to stem losses,” Reuters, June 28, 2022,

[26] Fu Wenli, “Strategies for Breaking Through China’s Energy Security Constraints Under the New Pattern,” Petroleum & Petrochemical Today, June 1, 2022,; Wang Haibin, “In an Increasingly Tumultuous World, How Can China’s Energy Achieve Energy Sustainable Security?” Energy, March 16, 2022, multuous-world-how-can-chinas-energy-achieve-energy-sustainable-security/; Xu Jin, “Ten Revelations from the Russia-Ukraine Conflict Concerning China’s Energy Security [俄乌冲突给我国能源安全的十大启示],” Interpret: China, May 10, 2022,

[27] Joe McDonald, “China’s Russia dealings irk US, but don’t breach sanctions,” AP News, June 1, 2022,

[28] “Five themes dominating China’s energy scene in 2022,” Wood Mackenzie, January 27, 2022,

[29] Chuin-Wei Yap, Kejal Vyas, and Chieko Tsuneoka, “Coal Shortages Push Up Prices, Weigh on Economies,” Wall Street Journal, October 6, 2021,

[30] David Stringer and Dan Murtagh, “Coal Hits Another Record in China as Floods Deepen Energy Crisis,” Bloomberg, October 11, 2021,

[31] David Fishman, “The three causes of China’s power outages,” ChinaSup, September 28, 2021,

[32] “Was China’s power crisis caused partly by an obscure mining law?” South China Morning Post, from Bloomberg, September 30, 2021,; and Echo Xie, “The local government failures behind China’s power crisis, South China Morning Post, September 30, 2021,

[33] Max Tingyao Lin, “China’s energy transition hits a bump in the road amid slow power market reforms,” S&P Global, October 7, 2021,

[34] “Li Keqiang presided over a meeting of the National Energy Commission,” China Electric Power News, October 11, 2021,; and “China Rethinks Path to Climate Goals Due to Energy Crisis,” Bloomberg, October 12, 2021,

[35] “Dual circulation series: China’s energy security,” Economist Intelligence Unit (EIU), December 18, 2020,

[36] The State Council of the People’s Republic of China, May 5, 2020,

[37] “The 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and Outline of the Vision for 2035,” Xinhua, March 12, 2021,

[38] National Development and Reform Commission (NDRC) of the People’s Republic of China, “National Development and Reform Commission and National Energy Administration on improving energy: Opinions on Institutional Mechanisms and Policy Measures for Green and Low-Carbon Transformation,” No. 206 (2022),

[39] National Development and Reform Commission (NDRC) of the People’s Republic of China, “Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality in Full and Faithful Implementation of the New Development Philosophy,” October 24, 2021,

[40] State Council of the People’s Republic of China, “Full Text: Action Plan for Carbon Dioxide Peaking Before 2030,” Xinhua, October 27, 2021,

[41] David Stanway, “Coal still at heart of China energy strategy after parliamentary gathering,” Reuters, March 11, 2022,

[42] “The 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and Outline of the Vision for 2035,” Xinhua, March 12, 2021,

[43] “Changes to energy targets; Xi’s coal directives; Analysis on ‘record high’ coal consumption,” Carbon Brief, March 10, 2022,

[44] Yawen Chen, “Ukraine war helps China's coal addiction stack up,” Reuters, June 1, 2022,

[45] Kevin Rudd, “China’s Lessons from Russia’s War,” Project Syndicate, June 17, 2022,

[46] “China April coal imports soar, driven by panic orders in early March,” Reuters, May 9, 2022,; and “China Orders Power Firms to Replenish Coal as Prices Remain High,” Bloomberg, March 21, 2022,

[47] National Energy Administration of the People’s Republic of China, “Zhang Jianhua: Promote the effective implementation of energy transformation goals and tasks,” March 3, 2022,

[48] Norman Waite, “China’s current focus on coal is distinct from long-term goals,” Institute for Energy Economics and Financial Analysis, April 12, 2022,

[49] Bernice Lee, “Why the world underestimates China’s climate action at its peril,” New Statesman, May 6, 2022,

[50] “China says a third of electricity will come from renewables by 2025,” Reuters, June 1, 2022,

[51] Climate Action Tracker, China,

[52] “Guiding Opinions on Energy Work in 2022” [2022年能源工作指导意见], Interpret: China, March 17, 2022,

[53] International Energy Agency (IEA), An energy sector roadmap to carbon neutrality in China (September 2021),

[54] Swithin Lui, “Why China is set to significantly overachieve its 2030 climate goals,” Carbon Brief, May 19, 2022,

[55] “Value of China’s Q1 energy imports surges amid rocketing prices,” Hellenic Shipping News, April 15, 2022,

[56] OPEC Monthly Oil Market Report (June 14, 2022): 69 and Table 11-1.

[57] “Saudi Arabia expands share in China oil market, Russia lags,” Reuters, January 20, 2022,

[58] “China’s Oil Demand Growth Threatened By Latest Covid Outbreak,” Reuters, April 7, 2022,

[59] Bozorgmehr Sharafedin, Florence Tan, and Chen Aizhu, “More Russian oil going east squeezes Iranian crude sales to China,” Reuters, May 19, 2022,

[60] “Iran Slashes Cost of Its Oil to Compete With Russia in China,” Bloomberg, July 3, 2022,

[61] United Nations Comtrade data,

[62] “Crude Petroleum in Saudi Arabia,” Observatory of Economic Complexity (OEC),,United%20States%20(%246.59B).

[63] Tsvetana Pereskova, “Saudi Arabia Cuts Oil Volumes To China For July,”, June 10, 2022,

[64] See for example: Chen Aizhu, “Exclusive: China firms in advanced talks with Qatar for gas field stakes, LNG offtake,” Reuters, June 17, 2022,

[65] See for example: “Aramco Boosts China Oil Ties,” Gulf Times, March 12, 2022,

[66] John Calabrese, “Sustainable Momentum? China and the Mideast Solar Market,” Middle East Institute, October 19, 2021,; AMEA Power and China’s SPIC sign cooperation agreement,” Energy & Utilities, March 21, 2022,; and “Chinese developer wins 300MW Saudi solar project,”, March 9, 2022,

[67] John Calabrese, “Warming to a Multi-Colored Hydrogen Future? The GCC and Asia Pacific,” Middle East Institute, June 22, 2021,; and Anna Ivanova, “AMEA Power, China's HHDC team up to develop green projects in MENA,” Renewables Now, March 21, 2022,

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About the author

Dr John Calabrese is a professor at American University in Washington DC, where he teaches US foreign policy. He is the author of China's Changing Relations with the Middle East and Revolutionary Horizons: Iran's Regional Foreign Policy, and serves as the book review editor of The Middle East Journal.

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