Energy crisis, China was already ready: how it is responding

The New York Times explains how Beijing has increased oil reserves, and since 2019 has begun substituting coal for gas and oil especially in the growing petrochemical industry, and has pursued renewable energies such as solar, wind and hydroelectricity so aggressively that its demand for refined oil, diesel and gasoline has declined. Beijing has developed technologies to reduce its dependence on foreign raw materials to fuel its industry seen by the ruling Communist Party as the foundation of its national security strategy.

And since Donald Trump’s first term in the White House, the country has refined and extended this approach. “There has been an increasingly top-down industrial policy, with even stronger centralized control to develop some strategic sectors which for Beijing must be strengthened so as not to be controlled by Western powers”, commented Heiwai Tang, director of the Asia Glibal Institute of the University of Hong Kong, interviewed by the American newspaper.

If ten years ago China was the largest market for combustion engine cars, today it is the most important market for electric vehicles. While it was the most important importer of petrochemicals to produce the plastic, rubber and metal components to power factories, it now uses mainly locally mined coal – with technology developed in Germany and exploited during the Second World War – to produce chemicals such as methanol and synthetic ammonia. all thanks to government planning and investment.

Already in 2004 Beijing had begun to increase its oil reserves for fear of problems in the Strait of Malacca, between Indonesia, Malaysia and Singapore, a crucial passage for the oil it imported. In recent months it had begun to increase reserves again, with an increase in oil imports in 2025 of 4.4 percent, compared to the previous year, compared to consumption increased by 3.6. But it has also developed a petrochemical industry that has freed it from 1990s dependence on companies like DuPont, Shell and BASF to dominate the global supply system, churning out three-quarters of the polyester and nylon produced in the world. However, domestic demand for refined oil, petrol and diesel has fallen for two years in a row. Oil consumption increases only for the petrochemical industry.

“Everything Trump does triggers even more self-sufficiency in Beijing,” analysts comment. “Trump 0.1 operated as a clear rupture that changed China’s geopolitical calculations by reactivating ancient fears,” explained Lauri Myllyvirta, co-founder of the Center for Research on Energy and Clean Air. “Xi also spoke about the resilience of supply chains. All this has favored the petrochemical boom.” In 2020, China had used 155 million tons of carbon to produce chemicals. In 2024, it used 276 million. In 2015, there was a further increase in this figure by 15 percent, exceeding US coal consumption to 230 million tons. Coal consumption is seen as a bridge to the greater development of renewables. Investments have also been made to use electricity for the petrochemical sector. China produces a third of Goobali’s nitrogen fertilizer, and 80 percent of that share is produced with coal rather than oil. Since the start of the war in the Middle East, prices on international markets for agricultural urea, the main fertilizer chemical, have increased by more than 40 percent while urea produced in China has remained stable at half the global price.