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Home arrow Geography arrow The Caspian Sea Chessboard. Geo-Political, Geo-Strategic, and Geo-Economic Analysis
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China’s energy supply needs

For many years China has been experiencing a sustained economic growth, with a steady increase of the energy needs and the continual search for new sources of supply. According to the International Monetary Fund, after an average annual GDP increase of 10% in the decade from 2000 to 2011, starting from 2012 China began a phase of decline, as a result of the difficulties generated by global financial crisis in the China’s economic system. Industrial production and exports have slowed, while the government tried to curb inflation and excessive investment in some sectors of the market. This trend seems to be still in place, so that in 2014 a growth in GDP of 7.5% is expected, while it could further slow in 2015 (7.3%). The Chinese thirst for energy, however, hasn’t been reducing, so that today China is the second largest oil consumer behind the United States and the largest global consumer of energy, according to International Energy Agency (IEA).

China has been a net oil exporter until the early 1990s and became the world’s second largest net importer of oil in 2009. The IEA has calculated that in 2011 the growth in oil consumption in China accounted for half of the overall growth in oil consumption.

Table 11.1 - Top world net oil importers (2012)

Country

Million tonnes

United States

413.9

China

327.1

Japan

224.3

India

127.9

Source: BP Statistical Review of World Energy, 2013

Also with regard to the natural gas, consumption in China has grown a lot in recent years, so that it was necessary for the Chinese industry to increase imports by pipeline and to rely more on liquefied natural gas (LNG). In an effort to diversify energy supply, China also included other sources which, however, still form a small part of the energy mix, in which, according to the 12th Five Year Plan, an increasing proportion will be represented by non-fossil fuels. To date, the main source of energy supply for China is still coal (70%), followed by oil (19%), hydroelectric (6%) and natural gas (4%).

Due to the impressive Chinese need of energy resources, imports from the Caspian Sea area represent a significant investment in strategic terms. To date, import data related to oil are not so impressive, but they are set to grow in the next future thanks to the ongoing construction of new pipelines. Instead, natural gas imports from Turkmenistan are already relevant for the Chinese thirst of energy.

 
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