China Forms Energy Policy for 21st Century

Rapid economic development of the PRC led to its transformation into the world's largest consumer of energy resources. Moreover, for Russia China has become a priority partner in the energy sector. Meanwhile, Chinese approaches to energy policy are changing under the influence of both the internal shifts within the country and global trends in rethinking of environmental effects of energy production. This article aims to evaluate the current state of the Chinese energy industry and policies of Beijing for its further reformation. The authors rely not only on official documents and data, but also on forecasts of leading Chinese think tanks, which contribute to state planning. Analysis shows that national energy policy started to take shape after 2007 with the publication of the first White Paper on this issue. However, despite consistent efforts of the Chinese leadership to ensure long-term planning in national energy sector, there is considerable uncertainty about its future. On the one hand, gas industry is placated as a priority of the PRC strategy. On the other hand, the lack of its own reserves of traditional natural gas as well as difficulties in development of shale formations and other alternative sources of gas, which the country possesses, encourage some Chinese experts to push for a greater reliance on the renewable energy. This approach is justified due to the Chinese leadership role in production of relevant equipment. The most important challenge for China (given its environmental obligations) is the continued dominance of coal. Beijing pursues consistent policy to reduce it and to introduce modern technologies in the coal industry, but the problem remains large-scale. Finally, energy efficiency and international expansion of Chinese corporations are essential reserves of China’s energy policy. The analysis demonstrates that for the foreseeable future, the PRC market will continue to form a demand for Russian energy resources, which creates grounds for furthering cooperation.

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