An analysis of China's energy demand and supply policy framework


  • ZhongXiang Zhang

    Corresponding author
    1. Center for Energy Economics and Strategy Studies, Fudan University, Shanghai, P. R. China
    2. Institute of Policy and Management, Chinese Academy of Sciences, Beijing, P. R. China
    3. Research Program, East-West Center, Honolulu, HI, USA
    4. Centre for Climate Economics and Policy, Crawford School of Public Policy, The Australian National University, Canberra, Australia
    • Department of Public Economics, School of Economics, Fudan University, Shanghai, P. R. China
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The energy and carbon pictures in China have changed dramatically since launching its open-door policy and economic reforms in late 1978. China is already the world's largest energy consumer and carbon emitter. Its energy use and carbon emissions continue to be on the climbing trajectories beyond 2030 as it is approaching to be the largest economy. Clearly, meeting China's increasing energy needs to fuel its rapid economic growth presents an enormous challenge, not simply for China but for the entire world. This paper focuses on assessing those crucial issues on energy demand and supply in China. Given the inevitable rising trend of China's energy demand and continuous coal dominance in China's energy and power generation mix over the next two decades and beyond, the paper discusses China's efforts toward energy conservation and how China can generate electricity with coal more efficiently and environmentally friendly to limit its impacts. This is followed by examining a variety of policies that China has taken to address its growing dependence on imported oil. The paper also discusses the evolving of China's nuclear power policy, and indicates that the expansion of nuclear power is inevitable in China to cope with its daunting energy security and environmental challenges. The Fukushima accident will have no effect on China's stance on nuclear power, although it, at most, will slightly affect the pace of its development. From a long-term perspective, widespread use of renewable energy is a real solution. Therefore, the paper discusses in great detail China's dramatic efforts to meet its ambitious renewable targets, focusing on wind power that is identified as a priority for diversifying China's energy mix. All taken together and integrated well, these policies help China to transit to a low-carbon economy.