China, energy, economy & environment 2004-2013
Desperate measures — Rivers are disappearing in China. Building canals is not the solution
(The Economist) Eight of the nine members of the previous Politburo’s standing committee were engineers and a former president, Hu Jintao, was a water engineer. The country has built as many large dams as the rest of the world put together.
The Grand Canal now forms a link in one of the biggest engineering projects the world has ever seen, whose first stage is due to open by the end of this year. It goes by the unlovely name of the South-North Water Diversion Project (see article). If it is ever finished it will move water along 2,000 miles of new canals, some of them across the Himalayan plateau, from the Yangzi in the south to the Yellow River in the north, at a cost of more than $50 billion.
Unlike some of China’s recent infrastructure extravagances, the diversion project addresses a serious problem. China is dangerously short of water. While the south is a lush, lake-filled region, the north—which has half the population and most of the farmland—is more like a desert. The international definition of water stress is 1,000 cubic metres of usable water per person per year. The average northern Chinese has less than a fifth of that amount. China has 20% of the world’s population but only 7% of its fresh water. … China’s water is disappearing. In the 1950s the country had 50,000 rivers with catchment areas of 100 square kilometres or more. Now the number is down to 23,000. China has lost 27,000 rivers, mostly as a result of over-exploitation by farms or factories.
China’s $50bn spending spree on new Silk Road
Though it may appear as a single road (in red), the “Silk Road” was a network of centuries-old trade routes, which enabled traders to travel from Xian (Chang’an) in China, to Istanbul (Constantinople) in Turkey. The ancient spice and incense routes were also connected to the Silk Routes by ports and sea routes.
(The Independent) China has spent more than $50bn (£31bn) in the past three months on energy and infrastructure deals in central Asia as Beijing seeks to establish a “new Silk Road” through the region.
Chinese outbound investment totalled just over $100bn in the third quarter of 2013 with around half of that sum spent in the central Asian states visited by the Chinese president Xi Jinping on an official tour last month. … Xi visited Turkmenistan, Kazakhstan, Uzbekistan and Kyrgyzstan in September and signed sizable business deals with all four countries. …
China’s largest financial agreements over the third quarter were related to energy infrastructure projects. In Kazakhstan China signed 22 agreements worth a combined total of $30bn. This included a $5bn deal for the China National Petroleum Corporation to acquire an 8 per cent stake in the Kashagan Oil & Gas field.
Anthony Germain: China in Africa
Investments come without demands for democracy
(CBC) Across Africa, China is pursuing a natural resources bonanza. In Angola it’s oil; in Mozambique, it’s timber and in Zambia, it’s copper. This grand enterprise has earned the world’s greatest emerging economy both friends and critics.
The Chinese in recent years have lent Africans billions of dollars with few conditions. They have built roads, bridges and power plants. They’ve flooded African markets with cheap, affordable consumer goods. They’ve also exported the layers of secrecy so common to business and industrial dealings inside the People’s Republic. Excellent Report – the audio from Dispatches is longer and even better.
The politics of dam-building
Opening the floodgates — The great rivers of China are being dammed, regardless of the consequences
(The Economist) CHINA has many good reasons not to build the $5.2 billion Xiaonanhai dam on the Yangzi river in Chongqing. The site, on a gentle slope that moves water along only slowly, is not ideal for generating hydropower. The fertile soil makes it one of China’s most productive regions, so it is densely populated with farmers reaping good harvests. And the dam (see map), which would produce only 10% of the electricity of the Three Gorges project downstream, could destroy a rare fish preserve, threatening several endangered species including the Yangzi sturgeon.
Yet it does not matter how strong the case may be against Xiaonanhai, because the battle against a hydropower scheme in China is usually lost before it is fought. The political economy of dam-building is rigged. Though the Chinese authorities have made much progress in evaluating the social and environmental impact of dams, the emphasis is still on building them, even when mitigating the damage would be hard. Critics have called it the “hydro-industrial complex”: China has armies of water engineers (including Hu Jintao, the former president) and at least 300 gigawatts of untapped hydroelectric potential. China’s total generating capacity in 2012 was 1,145GW, of which 758GW came from coal-burning plants. China’s dam-building: A rigged game video
‘Liconomics': China’s Green Revolution Arrives
China has changed course and announced an ambitious new plan to push sustainable energy. The initiative by Li Keqiang’s government signals a turning point in the country’s approach to the environment — and could mean big business for Germany.
(Spiegel) On Sunday, August 11, the government released a guideline with the modest title “Opinions of the State Council on Accelerating the Development of Energy-Saving and Environmental Protection Industries.” According to the document, the government is upgrading the environmental sector to the rank of a “key industry,” a title that had been reserved for the steel and pharmaceutical industries, as well as biotechnology. Under the new guideline, the sector is expected to earn a massive $728 billion (€545 billion) by 2015, and to grow at twice the rate of the rest of the economy.
Beijing wants to boost manufacturers of energy-efficient power plant equipment, significantly increase the number of cars and buses running on liquefied natural gas and further expand the number of wind and solar farms, as well as nuclear power plants.
The government plans to achieve all of this using investments, tax breaks and direct subsidies — from which companies with foreign investors are expressly to benefit as well.
Public trust crisis threatens China’s nuclear power ambitions
(Reuters) – As China pushes an aggressive expansion of nuclear power it is running into a major stumbling block – a breakdown of trust, post-Fukushima, in official assurances of public safety.
A plan to build a $6 billion uranium processing plant in the southern province of Guangdong was canceled this week after about a thousand people took to the streets demanding the project was scrapped over public health and environmental fears.
Beijing plans to plough tens of billions of dollars into the construction of dozens of nuclear power projects across the country by 2020, as part of efforts to reduce its reliance on dirty coal-fired power and cut air pollution.
Industry insiders blamed the cancellation of the project on poor communication and a lack of public education. They say if things do not improve more protests could spring up elsewhere, threatening those plans to build new reactors.
Fishermen row a boat in the algae-filled Chaohu Lake in Hefei, Anhui province, 2009. (Jianan Yu / Courtesy Reuters)
Choking on China — The Superpower That Is Poisoning the World
(Foreign Affairs) China is the world’s worst polluter — home to 16 of the 20 dirtiest cities and the largest emitter of greenhouse gases. Recent headlines have been shocking: 16,000 decaying pig carcasses in Shanghai’s Whampoa River, dire air quality reports in Beijing, and hundreds of thousands of people dying prematurely because of environmental degradation. Most recently, the country has been shaken by a mysterious virus, H7N9, which has already killed six people and has spurred health authorities to order the slaughter of thousands of pigeons, chickens, and ducks thought to carry it. In the United States, the Center for Disease Control and Prevention has begun work on an H7N9 vaccine.
The dangers of China’s environmental degradation go well beyond the country’s borders, as pollution threatens global health more than ever.
Insight: China’s losing battle against state-backed polluters
(Reuters) Hugely dependent on the tax revenues and jobs provided by big polluting firms, local authorities have long been regarded as one of the biggest obstacles to Beijing’s promises to reverse decades of environmental damage. State news agency Xinhua said in a strongly-worded editorial in March that “blame lies in governments at different levels” for chasing growth and letting environmental problems fester.
According to a proposal submitted by delegates at last month’s National People’s Congress, there have been more than 30 serious incidents of heavy metal pollution in the past three years, and many were caused by “regional governments blindly pursuing economic development, as well as law enforcement and supervision not being strong enough”.
Report: China’s air pollution will only grow worse
China’s air pollution is on pace to become about 70% worse by 2025 because of increasing coal consumption and car ownership, according to Deutsche Bank analysts. Quartz (3/12)
Toxic Water: Across Much of China, Huge Harvests Irrigated with Industrial and Agricultural Runoff
(circle of blue via Nick’s Gleanings) The farmer’s plight underlies a dirty truth about China’s fast development: the nation’s rivers, lakes, and falling water tables are enduring deficits of clean water that often force farmers to grow food using water that is tainted with heavy metals, organic pollutants, and nitrogen. Much of China’s water is so contaminated that it should not even be touched, yet tremendous amounts of the grains, vegetables, and fruits that are served in homes and restaurants, as well as textiles that are sold in markets, are irrigated with untreated industrial wastewater.
Crash programs to build highways, railways, airports, modern manufacturing bases, and other equipment have distinguished China for a generation. The country has not, however, launched any similarly comprehensive or sustained programs to clean up its filthy water, though reforms may be on the horizon.
Smog and mirrors — Sinopec’s big plans hit an obstacle
(The Economist) China’s new leaders, ever wary of anything that might cause unrest, have promised to clean up the pollution quickly. Among their targets are the country’s antiquated, filthy oil refineries. Yet Mr Fu, when asked about the smog, harrumphed to Xinhua, an official news agency, that his refineries were not at fault. He blamed lax regulations. That prompted gales of derisive laughter online.
Sinopec is not like a Western oil firm. As an arm of the state (and a more powerful one than the environmental-protection ministry) it has a lot of say in writing its own rules. That is perhaps why in much of China regulations allow the sulphur content in petrol to be as high as 150 parts per million, whereas European standards cap it at 10 ppm. A pundit in the Shanghai Daily said his comments were “a massive public-relations disaster” and “highlighted a serious lack of responsibility”.
Politics of pollution: China’s oil giants take a choke-hold on power
The search for culprits behind the rancid haze enveloping China’s capital has turned a spotlight on the country’s two largest oil companies and their resistance to tougher fuel standards.
Bureaucratic fighting between the environment ministry on the one hand and China National Petroleum Corp (CNPC) and Sinopec Group on the other has thwarted stricter emission standards for diesel trucks and buses — a main cause of air pollution blanketing dozens of China’s cities.
To be sure, many sources contribute to air pollution levels that hit records in January, but analysts say the oil companies’ foot-dragging and disregard of environmental regulations underscore a critical challenge facing a toothless environment ministry in its mission to curb air pollution.
With widespread and rising public anger changing the political calculus, it also poses a broader question of whether the incoming administration led by Communist Party chief Xi Jinping will stand up to powerful vested interests in a country where state-owned enterprises have long trumped certain ministries in the quest for economic growth at all costs.
Hydro dams could jeopardise ‘Grand Canyon of the east’, say green groups
Dams on China’s last free-flowing river could harm ecosystems, displace people, and cause catastrophic seismic events
(The Guardian) Chinese environmental groups warn that government plans for a slew of hydroelectric dams on the pristine Salween (Nu) river – often called the Grand Canyon of the east for its deep valleys and sweeping views – could jeopardise biodiverse ecosystems and indigenous cultures, and lead to potentially catastrophic seismic events.
China’s state council released a notice last week revealing plans to proceed with over 60 new hydroelectric projects on three major rivers under the government’s 12th five-year plan, from 2011 to 2015. Four of the projects lie on the upper reaches of the Salween.
The river, also known as the Thanlwin, begins on the Tibetan plateau and winds through Thailand before ending in a Burmese estuary. Its headwaters support 5 million people from 13 ethnic groups, many of whom are subsistence farmers. Entire groups may have to be resettled, dealing a significant blow to their traditional way of life.
China plans emergency measures to control Beijing air pollution
(Planet Ark) Beijing is to unveil unprecedented new rules governing how China’s capital reacts to hazardous air pollution, the official Xinhua news agency said, as deteriorating air quality threatens to become a rallying point for wider political dissatisfaction.
The rules will formalize previous ad-hoc measures, including shutting down factories, cutting back on burning coal and taking certain vehicle classes off the roads on days when pollution hits unacceptable levels.
Air quality in Beijing, on many days degrees of magnitude below minimum international health standards for breathability, is of increasing concern to China’s leadership because it plays into popular resentment over political privilege and rising inequality in the world’s second-largest economy.
The great green grid of China
Laurence Brahm says Beijing should redouble its push for renewable energy, which would create new opportunities for growth and, in turn, bolster its political sustainability
(South China Post) China is the world’s greatest carbon-emitting nation, responsible for much of the greenhouse gases that are quickly destroying our planet. Some 70 per cent of China’s energy comes from coal. Hydropower and nuclear account for most of the remaining output, while renewable energy – mostly solar and wind – is a remarkably low 0.7 per cent.
… in a global recession China needs a new economic stimulus. But with all its redundant roads and cement blocks, what is left to invest in? The answer is not another mortar and brick Great Wall, but the Great Grid.
First, massive state investments will be needed to convert China’s fossil-fuel-based grid into one based on renewable energy. This will have to be funded by new green bond issues. This comprehensive grid conversion will create waves of jobs, from the most senior engineers to blue-collar workers in every province and region.
As Wen Jiabao departs, China’s dam plans to accelerate
(Reuters) – The number of new hydropower projects in China could surge as the country’s populist premier Wen Jiabao retires and a new leadership team races to meet ambitious 2020 energy goals.
Dam building slowed considerably under Wen, who personally intervened to block hydropower projects and avoid the potential for protest from local populations. Projects such as the $59 billion Three Gorges Dam have been the focus of criticism over the social and environmental cost China is paying for development.
More dams could be a tough sell as an increasingly affluent public pushes back against a “growth at all costs” economic model. As China’s new leaders consider how to power expansion, however, they have little choice but to push ahead with hydropower given that alternatives like coal or nuclear fueled power may be even less palatable to the population. … The builders of several projects stalled during Wen’s tenure as premier have already begun construction even before receiving approval to go ahead. Giant power firms are preparing new multiple dam systems on the upper reaches of the Yangtze and Mekong rivers in southwest China’s Yunnan province.
China’s Xi Jinping faces a host of challenges: a slowing economy, stagnating political reform. But the country’s black skies and red rivers ought to be his top priority.
(Foreign Policy) The outline of China’s looming environmental challenges may be familiar, but the details are so staggering that they bear recounting: The dark side of being the world’s factory for three decades is a landscape of rivers, fields, and smoggy cities now so degraded that the World Bank estimates pollution damages annually siphon off 5.8 percent of China’s GDP. The poor are disproportionately affected, and 242 million rural residents — roughly the entire population of Indonesia — lack access to clean drinking water. Cancer is the country’s leading cause of mortality, implicated in nearly one in four deaths.
China’s major cities remain cloaked in smog. And though environmental officials have successfully shuttered many polluting factories, the fast-multiplying number of vehicles in the world’s top auto market poses another air-quality challenge. Likewise, the environmental ministry knows that dangerous levels of heavy-metal pollution contaminates a tenth of China’s farmland (prolonged exposure causes organ and nerve-damage, among other problems), but cleaning up is another matter.
If only China had the luxury of just focusing on existing problems. But water scarcity — China is home to a fifth of the world’s population, but just 7 percent of available freshwater resources — is likely to become more dire, as another 350 million people transition from rural areas to urban lifestyles, and bustling metropolises rise in the country’s arid west. Proposed engineering solutions, like the massively ambitious South-to-North Water Diversion Project, threaten to do as much environmental harm as good. The aquifer under the North China Plain, the country’s breadbasket, is fast being depleted. Some 243 lakes have vanished in the past five decades.
With national energy demand rising steeply, China’s coal consumption tripled between 2000 and 2010. Eighty percent of China’s electricity is now generated from coal, which is also responsible for 85 percent of the country’s acid rain-causing sulfur-dioxide emissions and a major contributor to its greenhouse-gas total. A central government-led push to develop renewable energy — including the expansion of wind, solar, hydropower, and nuclear energy — has complemented but not offset the growing appetite for coal. And now the country’s plans to expand large western coal bases seem poised to collide with regional water shortages (the operation of coal-fired plants is highly water-intensive), as HSBC concludes in its September report, “No Water, No Power.”
Thousands being moved from China’s Three Gorges – again
(Reuters/Planet Ark) China relocated 1.3 million people during the 17 years it took to complete the Three Gorges dam. Even after finishing the $59 billion project last month, the threat of landslides along the dam’s banks will force tens of thousands to move again.
It’s a reminder of the social and environmental challenges that have dogged the world’s largest hydroelectric project. While there has been little protest among residents who will be relocated a second time, the environmental fallout over other big investments in China has become a hot-button issue ahead of a leadership transition this year.
The Three Gorges dam was completed in July when its final turbine joined the national grid and the facility reached its full capacity of 22.5 gigawatts, more than enough to power Pakistan or Switzerland.
… In a sign of how sensitive the fresh relocations are, plainclothes security men and people who identified themselves as officials from the “news department” followed Reuters reporters around the area for three days, hindering interviews by intimidating locals with their presence.
… Besides 20,000 people in Huangtupo, another 100,000 may be moved in the next three to five years because of geological risks, Liu Yuan, an official with the Ministry of Land and Resources in Beijing said in April, according to state-run China National Radio.
Zambian miners kill Chinese manager during pay protest
(BBC) Last year, the Zambian government dropped charges against two Chinese managers accused of attempted murder after they fired on miners at the Collum mine during a pay dispute.
Chinese firms own several mines in southern African countries, including coal and copper operations.
Copper mining is one of Zambia’s main industries, providing nearly three-quarters of the country’s exports; many of the mining companies are foreign-owned, and China has invested more than $400m (£250m) in Zambia.
China to launch rare earth trading platform in Aug: paper
(Planet Ark) China will launch its first spot trading platform for rare earths on August 8, state media reported, in the country’s latest effort to improve price discovery and regulate the market better.
China accounts for more than 95 percent of the global output of rare earths, a group of 17 minerals used in the electronics, defense and renewable energy industries.
But Beijing has cracked down on illegal mining, imposed strict production caps and set export quotas, saying that excessive production over the last decade has severely depleted its reserves, damaged its environment and dragged prices down to artificially low levels.
South China Sea issue dominates ASEAN summit
(Al Jazeera) US warns of more conflict if China doesn’t agree to maritime code, as Philippines and Vietnam push for code of conduct. … This push came as Beijing invited bids for exploration of oil blocks in waters claimed by Vietnam, which has sparked protests on the streets of the capital, Hanoi.
China, U.S. seek to calm South China Sea tensions
(Reuters) – The United States and China signaled a willingness on Thursday to work together on “sensitive issues” in a move to cool tensions between rival claimants to the potentially oil-rich and increasingly militarized South China Sea.
Long-simmering tensions in the waters have entered a more contentious chapter this year as the six parties who claim the territory search deeper into the disputed waters for energy supplies while building up their navies and defense alliances.
China’s latest import to Africa? A ghost town in Angola
(Financial Post) Angola serves as China’s largest source of oil in Africa. Some like energy expert @pcdunham speculate this could be in preparation for oil money that is expected once the country begins developing new oil discoveries.
China to boost private energy investment to bolster economy
(Reuters) – China signaled on Wednesday it wanted to ramp up private investment in its energy sector, in line with recently unveiled government plans to fast-track infrastructure investment to help combat the nation’s slowing economy.
Beijing is drafting detailed guidelines to encourage private investment across industries, with special focus on the heavily state-controlled electricity, oil and natural gas sectors, according to an article by the official Xinhua news agency.
Scarce water is undermining China’s energy policy
China’s energy development plans for the country’s western provinces, heavily oriented toward water-intensive coal, are running up against scarce water resources. “There is not enough water to support a lot of industry and coal operations in western China,” says Sun Qingwei, a climate and energy campaigner for Greenpeace China and a former government scientist. “If water resources are exploited by the coal industry, that will lead to land degradation and desertification. And the livelihood of the local communities is damaged.” Yale Environment 360 (4/30)
China Digs It: How Beijing Cornered the Rare Earths Market
China’s Wen in Iceland, eyes on Arctic riches
(Reuters) – China signed accords on energy cooperation and the Arctic in Iceland on Friday
Three Gorges Dam danger may force out 100,000 people
Landslides and other disasters up 70% since the water level hit maximum level in 2010
(CBC) Another 100,000 people may have to move away from China’s Three Gorges Dam due to the risk of disastrous landslides and bank collapses around the reservoir of the world’s biggest hydroelectric facility, state media said Wednesday.
The Ministry of Land Resources says the number of landslides and other disasters has increased 70 per cent since the water level in the $23 billion showcase project rose to its maximum level in 2010.
Some 1.4 million people already have been resettled due to the huge project on the Yangtze River. Authorities may move another 100,000 people in the next three to five years to minimize the risk of casualties from such threats, Liu Yuan, a ministry official, told China National Radio in a report posted on a government website and carried by the Shanghai Daily newspaper.
He said that 5,386 danger sites were being monitored and that work was beginning on rockfalls and landslides at 335 locations around the lake.
China Foothold in U.S. Energy
(WSJ) Since 2010, Chinese companies have invested more than $17 billion into oil and gas deals in the U.S. and Canada, according to data provider Dealogic, giving their energy-thirsty nation a long-coveted foothold in a region known for innovative new drilling techniques. North America has become China’s top region for oil and gas deals. Mr. Fu has been leading the push, first as chairman of China National Offshore Oil Corp., known as Cnooc, then as chairman of China Petrochemical Corp., called Sinopec, one of the largest oil companies in the world.
China’s Duan To Chair U.N. Carbon Executive Board
(Planet Ark) Maosheng Duan of China was on Monday named chairman of the executive board for the Clean Development Mechanism, becoming the first person from the world’s top polluter to oversee the UN-backed carbon market for developing nations. … Duan, who joined the executive board in 2010 and served as its vice-chair in 2011, is a professor at the Institute of Energy, Environment and Economy, Tsinghua University.
Worsening air pollution costs China dearly: study
(Reuters) China’s worsening air pollution, after decades of unbridled economic growth, cost the country $112 billion in 2005 in lost economic productivity, a study by the Massachusetts Institute of Technology (MIT) has found.
The figure, which also took into account people’s lost leisure time because of illness or death, was $22 billion in 1975, according to researchers at the MIT Joint Program on the Science and Policy of Global Change.
The study, published in the journal Global Environmental Change, measured the harmful effects of two air pollutants: ozone and particulates, which can lead to respiratory and cardiovascular diseases.
“The results clearly indicate that ozone and particulate matter have substantially impacted the Chinese economy over the past 30 years,” one of the researchers, Noelle Selin, an assistant professor of engineering systems and atmospheric chemistry at MIT, said in a statement.
Ground-level ozone is produced by chemical plants, gasoline pumps, paint, power plants, motor vehicles and industrial boilers. Inhaling it can result in inflammation of the airways, coughing, throat irritation, discomfort, chest tightness, wheezing and shortness of breath.
China’s dangerous nuclear power industry
(Foreign Policy) In the wake of the Fukushima disaster and with the world more attuned to the dangers of nuclear power than ever before, a series of State Department cables reported in the Guardian warned that China’s new power plants will be old before they’re even switched on. But there might be more than just environmental worries at play here — there’s money to be made.
“China is currently in the process of building as many as 50 to 60 new nuclear plants by 2020; the vast majority will be the CPR-1000, a copy of 60’s era Westinghouse technology that can be built cheaply and quickly and with the majority of parts sourced from Chinese manufacturers.”
That’s a concern for U.S. nuclear suppliers like Westinghouse and General Electric. With China’s vast energy demands and a tightening global market for nuclear power, the country is exceedingly important.
Perhaps that’s why one cable seems to be trying the old scare-tactic sales pitch: “China is assuring that rather than building a fleet of state-of-the-art reactors, they will be burdened with technology that by the end of its lifetime will be 100 years old. Finally, by bypassing the passive safety technology of the AP1000, which, according to Westinghouse, is 100 times safer than the CPR-1000, China is vastly increasing the aggregate risk of its nuclear power fleet.”
China’s not listening, though: the cable notes that the vast majority of the technology purchases for the planned nuclear plants are “political decisions.”
China rules the rare earth
The global race to grab a share of rare earth metals in Central Asia has begun.
(Al Jazeera) Asia is at the center of an inevitable development of our digital world: the coming mineral wars.
The computer you are using to read this article is already involved in a global war.
Oil wars? Water wars? Sure – they will continue to define the geopolitics of the early 21st century. But in high-technology terms, nothing compares with the coming mineral wars. And the name of the game is rare earth.
Asia is the land of rare earth – the minerals that allowed the digital revolution to happen, and that are making green technology a reality. China controls no less than 95 per cent of the global production of rare earth.
The key player in this high-stakes game is Baotou Steel Rare Earth (Group) Hi-tech Co., from Inner Mongolia – the world’s largest producer of rare earth elements.
The Queensway syndicate and the Africa trade
China’s oil trade with Africa is dominated by an opaque syndicate. Ordinary Africans appear to do badly out of its hugely lucrative deals.
When [China’s “going out”] policy works, African resources are swapped for aid, commercial financing and payments in kind such as public infrastructure. But with the syndicate, billions of dollars meant for schools, roads and hospitals have apparently ended up in private accounts. Rather than fixing Africa’s lack of infrastructure, Chinese entrepreneurs and Africa’s governing elites look as if they are conspiring to use the development model as a pretext for plunder.
(The Economist) Angola—along with Saudi Arabia—is China’s largest oil supplier and that alone makes Mr Vicente [chairman and chief executive of Sonangol] an important man in Beijing. But he is also a partner in a syndicate founded by well-connected Cantonese entrepreneurs who, with their African partners, have taken control of one of China’s most important trade channels. Operating out of offices in Hong Kong’s Queensway, the syndicate calls itself China International Fund or China Sonangol. Over the past seven years it has signed contracts worth billions of dollars for oil, minerals and diamonds from Africa.
Does the government in Beijing control the China International Fund? The syndicate looks as if it is a private enterprise. The Chinese state may see it as a necessary evil, letting it operate in Angola and thus insulating Chinese state companies from the corruption that sometimes surrounds large resource deals.
‘Sea dragon’ ventures 5,000m below sea to find jewels of the deep
China leads the way as discovery of rare-earth metals on floor of the Pacific Ocean triggers race to the bottom
(The Independent) China has boldly gone where few nations have gone before. It has sent a manned submersible vessel to a depth of 5,000 metres below the sea in its attempt to dominate the scientific exploration of the mineral-rich seabed. The Jiaolong, China’s first manned deep-sea submersible craft, has reached a depth of 5,057 metres (16,591ft) in the second of four planned programmes of dives that may take it as deep as 7,000 metres next year – deeper than the 6,500-metre record for civilian research submersibles set by Japan in 1990.
Why China’s days as a rare earth bully are numbered
Rare earth metals are the little-known but vitally important stuff that things like iPhone and laptop monitors, and wind turbine and hybrid car parts are made of. As Maclean’s reported last November, these metals are so crucial to much of the high-tech industry that, like oil and diamonds, they have effectively become a tool for geopolitical arm-twisting.
Mostly, they are a tool for the People’s Republic, which produces more than 90 per cent of the world’s rare earth metals. For example, when Beijing and Tokyo got into a diplomatic scuffle last year, China shut off exports of rare earth metals to Japan. Prices for the key metals skyrocketed up to 475 per cent as a result, spreading panic among Japanese manufacturers and prompting their government to comply with Chinese demands.
That’s why eggheads in Japan, Europe and North America were so disappointed with the new quotas announced today. The European Trade Commission called Beijing’s move “highly disappointing,” which, in diplomatic speak, is pretty heavy wording.
Analysis: China’s push for more hydropower tests limits
(Reuters) Plans to use massive new hydropower development to boost China’s power capacity by nearly half by 2015 will not dent coal demand enough to cut greenhouse gas emissions and could further damage the country’s strained river system.
China is mulling a coal production cap of 3.8 billion tons by 2015, and is committed to increasing the share of non-fossil fuel energy to 15 percent of total consumption by 2020.
But few analysts believe it is possible to scale up hydro, nuclear, solar and wind power at such a massive rate.
“We think there is still a lot of skepticism but the commitment to decarbonize the economy may have shifted the balance of power between the different factions of the government on this,” said Peter Bosshard of the International Rivers NGO, which opposes hydropower development. The financial, social and political costs of further dams planned on the Yangtze river in addition to the massive 18 GW Three Gorges and new projects in the largely untouched Tibetan plateau feed into widespread distrust at home and in the downstream countries of southeast Asia.
Chinese Energy Policies Harming Neighbors
China’s omnivorous energy requirements have been attracting increasing attention as of late, as Beijing attempts to secure any and all sources of power for its growing industrial base.
Nowhere is this more noticeable than Beijing’s policies in the South China Sea, where Chinese assertions of sovereignty are unsettling the Philippines, Taiwan, Vietnam, Malaysia, Indonesia and Brunei, all of whom have counter claims on the various shoals and islets. … China and India are engaged yet again in a spat, this time over the headwaters of the Brahmaputra River. According to New Delhi, China is planning up to 24 hydroelectric facilities with a cumulative power generation capacity of nearly 2,000 megawatts along Brahmaputra’s source, the Arun River, before it descends into India.
Further east, Vietnam, Cambodia, Thailand and Laos are alarmed by China’s intentions to build three massive dams on the upper reaches of the Mekong River, adding to six existing hydroelectric facilities. What is singularly lacking in all these plans is any regional or concerted international effort to counter China’s plans.
India’s concerns are heightened by the fact that most of its major rivers originate in Tibet.
Japan finds rare earths in Pacific seabed
Japanese researchers say they have discovered vast deposits of rare earth minerals, used in many hi-tech appliances, in the seabed.
The geologists estimate that there are about a 100bn tons of the rare elements in the mud of the Pacific Ocean floor.
At present, China produces 97% of the world’s rare earth metals. Analysts say the Pacific discovery could challenge China’s dominance, if recovering the minerals from the seabed proves commercially viable. Update 14 July (Reuters) China’s latest rare earth move disappoints EU, U.S — China eased export curbs for rare earth elements on Thursday, restoring them to near-2010 levels in a bid to appease trading partners, but the European Union said the move did not ensure stable supplies and the United States said the Chinese were heading the wrong way.
Chinese rare earth metals prices soar
(FT) A gravity-defying leap in the price of Chinese rare earth metals has triggered fears that the cost of components used in a range of goods from mobile phones to hybrid cars could soar.
The three to fivefold jump in prices since January comes after China, the world’s biggest producer of rare earths, has clamped down on domestic output.
The implications could be far-reaching. Although annual consumption of the metals is small relative to that of other commodities, rare earths are found in everything from fluorescent lights to wind turbines. They are very difficult, if not impossible, to substitute.
Industrial buyers are in shock after witnessing the price of rare earths such as cerium oxide jumping 475 per cent in just five months, amid falling supplies.
Russia-China Oil Price Dispute Valued at $100M
(Moscow Times) An oil dispute between Russia and China has escalated, industry sources said Friday, as Moscow believes Beijing has underpaid it $100 million for oil in 2011 under a landmark 20-year supply deal.
China warns on soil, air and water
Rapid development is taking a toll on China’s air, water and soil depleting natural resources to a dangerous level, Chinese Environment Minister Zhou Shengxian says. The remarks, and similar assessments expressed by Prime Minister Wen Jiabao, have prompted widespread speculation that Chinese authorities will unveil new environmental regulations during annual legislative meetings beginning this week. The New York Times (2/28)
China needs major push on water pollution
It will require billions of dollars and a concentrated policy to address China’s massive water problems, according to water activists. Updating the country’s urban water supplies alone would cost $20 billion a year. Rapid urban growth, fertilizers use, factory pollution and lax environmental protection enforcement, says environmentalists, are the main driving factors behind water pollution. Reuters (2/15
Energy efficiency eludes booming China
Though China has invested millions in alternative energies and energy efficiency, China’s booming automobile market and rapidly expanding infrastructure and development projects are preventing it from achieving energy efficiency. The appetite for automobiles in China will soon eclipse that of the U.S. market before the economic downturn, which makes for more pollution and fewer people using mass transit. China’s high-speed rail development requires a great deal of steel and cement, both energy-intensive materials. Chinese officials seek to transform the country from an industrial to an information economy in part to address energy efficiency. The New York Times (free registration) (9/16)
Devil Is In The Details Of China’s New Energy-Cutting Drive
There might be less than meets the eye to Beijing’s demand that more than 2,000 companies close down obsolete, energy-guzzling plants by the end of next month.
On paper, the order given on Sunday raises the specter of a sharp cut in industrial output growth, even as the robust economy shows modest signs of cooling.
In practice, several firms on the government’s black list said they had either already shut the offending facilities or were planning new, bigger replacements.
Rare Earth Elements: The World Is Rapidly Running Out And China Has Most Of The Remaining Supply
Most people have no idea what rare earth elements are, but a wide array of the technologies that we use every single day are dependent on them. … There are 17 key rare earth elements that we rely on every day. But there is a huge problem. China owns more than 85 percent of the known global reserves of rare earth elements.
The growing impacts of China’s oil spill
(MongaBay) Two oil pipelines exploded Friday in the Chinese province of Liaoning beginning China’s worst oil spill; nearly a week later 400,000 gallons of oil have spread over 166 square miles, according to China’s state media. The pipeline has since been fixed and is operating again. While the spill is small compared to the BP oil disaster in the Gulf of Mexico—which currently covers nearly 3,000 square miles with approximately 100 to 200 million gallons of oil—its impact regionally will likely be very large.
Oil spill proves wake-up call for China
(FT) Black oil is washing ashore, at least one person has drowned in the viscous slick, and efforts to clean up the mess are floundering.
Death Toll Mounts Following China Floods
(VOA) At least 700 people have been killed in flooding caused by torrential rain in China this year and more than 300 are still missing — the worst toll in more than a decade — and another severe storm is on the way. At least three-quarters of China’s provinces have seen severe flooding and 25 rivers have had record-high water levels. The floods, most severe around the Yangtze river basin, have overwhelmed reservoirs and wiped away hundreds of thousands of houses.
The flooding is the worst China has seen since the Yangtze River floods of 1998, which killed more than 4,000 people. Chinese authorities say that this year’s toll is lower because of the massive Three Gorges Dam.
China devastated by floods
(The Guardian) Over 130 dead and 800,000 displaced after torrential rain sees rivers swell and houses hit by landslides
The World’s Ongoing Ecological Disasters
(Foreign Policy) China’s recent industrial growth depends heavily on coal — the source of 70 percent of the country’s energy — a major reason why it recently became the world’s largest carbon emitter. The country’s mining sector is also extremely dangerous, killing as many as 13 miners every day. But nowhere is the danger of China’s out-of-control coal addiction more evident than in the 62 raging underground coal fires that have burned in Inner Mongolia since the early 1960s.
China’s energy plan puts economy before environment
Though similar debates are taking shape in China and the U.S. about their respective energy policies going forward, China’s energy policy is centered much more around economic security — with global climate change a secondary concern. China intends to tap its abundant coal resources in order to fuel its economic development, despite the consequences for the environment. Though China is concentrating growth in sustainable and clean energy sources, China’s draft energy policy considers global energy markets, foreign investment and other factors that might incentivize clean development at the expense of using dirty energy like coal. The New York Times (6/17)
Chinese engineers propose world’s biggest hydro-electric project in Tibet
Mega-dam on Yarlung Tsangpo river would save 200m tonnes of CO2 but could spark conflict over downstream water supply
Chinese hydropower lobbyists are calling for construction of the world’s biggest hydro-electric project on the upper reaches of the Brahmaputra river as part of a huge expansion of renewable power in the Himalayas. … documents on the website of a government agency suggest a 38 gigawatt hydropower plant is under consideration that would be more than half as big again as the Three Gorges dam.
Given the huge expense, technical difficulties and political sensitivities of the scheme, it is far from certain of final approval by the government. But several Chinese hydroengineers see it as the ultimate goal in an accelerating race with India to develop water resources in one of the planet’s last remote regions. Tapping the power of the river as it bends and plunges from the Himalayan roof of the world down towards the Indian and Bangladeshi flood plains has long been a dream of the world’s hydro-engineers.
Challenging China in Rare Earth Mining
Demand is surging for rare earth minerals as customers, particularly the U.S. military, seek alternatives to China, which now mines 97 percent of such minerals.
Sinopec Pays More for Oil Stake as Price for Energy Security
(Bloomberg) — China Petrochemical Corp.’s purchase of a stake in a Canada oil venture brings the nation’s spending on resources to $64 billion since 2005 and underlines its willingness to pay a premium for energy security.
The company known as Sinopec Group agreed to pay at least $650 million more for ConocoPhillips’s 9 percent stake in Syncrude Canada Ltd. compared with an estimate by Macquarie Securities. The premium could have been narrowed by a stronger yuan, currently constrained by a peg to the dollar.
China’s Growth Shifts the Geopolitics of Oil
The recession also precipitated a milestone for Saudi Arabia and the global energy market. While China’s successful economic policies paved the way for a quick rebound there, the recession caused a deeper slowdown in the United States, slashing oil consumption by 10 percent from its 2005-7 peak. As a result, Saudi Arabia exported more oil to China than to the United States last year.
While exports to the United States might rebound this year, in the long run the decline in American demand and the growing importance of China represent a fundamental shift in the geopolitics of oil. China’s oil demand is set to grow by 900,000 barrels a day in the next two years. It will account for a third of the world’s total consumption growth this year.
While China is by far the fastest-growing oil market in the world, the United States is still the top consumer: despite the slump, Americans consumed 18.5 million barrels a day in 2009. That amounts to 22 barrels of oil a year for each American, compared with 2.4 barrels for each Chinese.
China Leading Race to Make Clean Energy
China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world’s largest maker of wind turbines, and is poised to expand even further this year. China has also leapfrogged the West in the last two years to emerge as the world’s largest manufacturer of solar panels. And the country is pushing equally hard to build nuclear reactors and the most efficient types of coal power plants.
These efforts to dominate the global manufacture of renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.
Tom Friedman: Who’s Sleeping Now?
I am more convinced than ever that when historians look back at the end of the first decade of the 21st century, they will say that the most important thing to happen was not the Great Recession, but China’s Green Leap Forward. The Beijing leadership clearly understands that the E.T. — Energy Technology — revolution is both a necessity and an opportunity, and they do not intend to miss it
China’s Oil Ambitions in Canada Receiving New Government Scrutiny
Earlier this year, PetroChina and Canada’s Athabasca Oil Sands Corporation hatched a deal that would give the Chinese state-owned oil giant a 60 percent stake in two Alberta oil sands projects for about $1.7 billion. … the government is now reviewing the deal in light of a new regulation, approved in September, allowing Canada to consider whether a foreign investment may be “injurious to national security.”
Earth-Friendly Elements, Mined Destructively
Some of the greenest technologies of the age, from electric cars to efficient light bulbs to very large wind turbines, are made possible by an unusual group of elements called rare earths. The world’s dependence on these substances is rising fast.
Just one problem: These elements come almost entirely from China, from some of the most environmentally damaging mines in the country, in an industry dominated by criminal gangs.
Western capitals have suddenly grown worried over China’s near monopoly, which gives it a potential stranglehold on technologies of the future. In Washington, Congress is fretting about the United States military’s dependence on Chinese rare earths, and has just ordered a study of potential alternatives.
China reels under a barrage of criticism
(Asia Times Online) After a very public showdown with the United States in the early days of the global climate talks, China found itself attacked by smaller developing countries for benefiting more than anyone else from carbon credit funding. And as the Friday deadline for a deal approaches, Beijing has been seen deflecting the accusation that it was the stumbling block to reaching a deal.
China and the US – the world’s two largest carbon polluters – have clashed on key issues such as how to share out the burden of slashing greenhouse gases (GHGs) and whether the United States owes developing countries a “climate debt”.
Beijing says Western nations have built their prosperity on fossil fuels and need to shoulder the responsibility for reducing the growth of global GHG emissions. The International Atomic Agency – an intergovernmental forum on nuclear energy – however, projects that nearly all the growth in those gases over the next two decades will come from emerging economies and half of it from China.
Nuclear Power Expansion in China Stirs Concerns
China’s aggressive expansion of nuclear plants could cut carbon emissions, but the pace could lead to shortcuts.
China is preparing to build three times as many nuclear power plants in the coming decade as the rest of the world combined, a breakneck pace with the potential to help slow global warming. China’s civilian nuclear power industry — with 11 reactors operating and construction starting on as many as an additional 10 each year — is not known to have had a serious accident in 15 years of large-scale electricity production. And with China already the largest emitter of gases blamed for global warming, the expansion of nuclear power would at least slow the increase in emissions.
Yet inside and outside the country, the speed of the construction program has raised safety concerns. China has asked for international help in training a force of nuclear inspectors.
China must maintain nuclear safeguards in a national business culture where quality and safety sometimes take a back seat to cost-cutting, profits and outright corruption — as shown by scandals in the food, pharmaceutical and toy industries and by the shoddy construction of schools that collapsed in the Sichuan Province earthquake last year.
China and U.S. Hit Strident Impasse at Climate Talks
(NYT) Chinese negotiators have said little during formal negotiation sessions here, where they have been working in partnership with the developing countries. They have made clear that they do not expect money from the industrial powers to help make the shift to a more energy-efficient economy. But they will not accept any outside monitors to ensure that they are indeed making the changes that they have promised to reduce the amount of carbon dioxide and other pollutants emitted per unit of economic output. (BBC) In one hopeful sign, China has indicated it will not accept any money from a fund being set up by the West to help poorer nations tackle climate change. The possibility had upset many in the United States, who feel Beijing is now well-enough off to pay to clean up its own act.
(Bloomberg) — China may spend $700 million to help fund expansion of Costa Rica’s Refinadora Costarricense de Petroleo SA oil refinery. China is seeking to strengthen political ties with the region, Juan Lindau, a political scientist specializing in Latin America at Colorado College, Colorado Springs, said today in an e-mail. The two nations also are negotiating a trade accord. “China sees Costa Rica as a launching pad for all of its economic interests in Central America, not to speak of the more general vicinity,” he said. “China is boundlessly interested in Latin America’s resources.” More
China’s Ties With Iran Complicate Diplomacy
(NYT) China relies heavily on Iran’s vast energy reserves — perhaps 15 percent of the world’s natural gas deposits and a tenth of its oil — to offset its own shortages. The Chinese are estimated to have $120 billion committed to Iranian gas and oil projects, and China has been Iran’s biggest oil export market for the past five years. In return, Iran has loaded up on imported Chinese machine tools, factory equipment, locomotives and other heavy goods, building China into one of its largest trading partners.
China scholars say that the relationship is anything but one-sided. Iran has skillfully parceled out its oil and gas reserves to Chinese companies, holding exploration and development as a sort of insurance policy to retain Chinese diplomatic backing in the United Nations.
China seeks big stake in Nigerian oil
A Chinese state-owned oil company is in talks with Nigeria to buy large stakes in some of the world’s richest oil blocks in a deal that would eclipse Beijing’s previous efforts to secure crude overseas
The pendulum swings against the pit
Another attempt to control dirty and dangerous small coal-mines
(The Economist) IN THE northern province of Shanxi, one of China’s biggest coal-producing regions, a once-booming private mining industry is being taken over by the state. Hundreds of small coalmines are being closed down or merged into larger, government-owned businesses. The aim is to end a coal-digging free-for-all that is blamed for a blighted environment and hundreds of deaths every year. It will not be easy.
Tom Friedman: In October, Applied will be opening the world’s largest solar research center — in Xian, China. Gotta go where the customers are. So, if you like importing oil from Saudi Arabia, you’re going to love importing solar panels from China. Full story
China Oil Deal Is New Source of Strife Among Iraqis
When China’s biggest oil company signed the first post-invasion oil field development contract in Iraq last year, the deal was seen as a test of Iraq’s willingness to open an industry that had previously prohibited foreign investment.
One year later, the China National Petroleum Corporation has struck oil at the Ahdab field in Wasit Province, southeast of Baghdad. And while the relationship between the company and the Iraqi government has gone smoothly, the presence of a foreign company with vast resources drilling for oil in this poor, rural corner of Iraq has awakened a wave of discontent here. The result has been a local-rights movement — extraordinary in a country where political dissent has historically carried the risk of death — that in the past few months has begun demanding that at least $1 of each barrel of oil produced at the Ahdab field be used to improve access to clean water, health services, schools, paved roads and other needs in the province, which is among Iraq’s poorest.
1 September 2009
CHINA [is] IN OIL SANDS DEAL
(FP) China, using its significant financial firepower, snapped up majority stakes in two oil sands projects yesterday in a way experts say illustrates the energy-hungry country’s strategy to convince Canada it can be a palatable and necessary partner in the huge crude reserves buried in northern Alberta.
Securing China’s oil supply From Saudi Arabia to Sudan
(IIAS The Newsletter) Despite China’s endeavours to keep away from oil, it is indisputable that in the coming decades, it will remain a crucial energy source for the nation. Likewise, during the last 20 years, China’s oil supply has relied heavily on imports, with import volumes outstripping output. China’s future oil imports are dependent on the Middle East and Africa, with countries in those areas, such as Saudi Arabia and Sudan, serving as chief sources of China’s oil supply. But cooperation must inevitably involve the restructuring of geo-political relations.
Despite environmental concerns, China plans dams
Arguing that hydroelectric power provides the easiest route to energy for people living in Tibet, officials in Lhasa say that China has begun scouting sites for potential dams. Although China has sought to reassure people that the dams would not harm biodiversity, critics argue that China has not done due diligence on the issue concerning all the different, subtle roles rivers play. The Guardian (London) (10/14)
Paulson eyes Sino-US energy pact
Hank Paulson called on the US and China to step up their co-operation on energy and the environment at the beginning of a two-day session of talks under the bilateral strategic economic dialogue.
China on brink of electricity shortfall
By Jamil Anderlini and Geoff Dyer in Beijing
(FT) China faces its worst power shortage in at least four years as soaring coal prices and government-set electricity tariffs force dozens of small power plants to shut down rather than face mounting losses.
Nearly half of China’s provinces have started to ration electricity as the country enters the peak summer season, facing what analysts describe as its worst coal shortage.
China’s problems mirror those of other Asian countries, where the rising price of fuel and other commodities has had an impact on governments that traditionally subsidise everything from the cooking kerosene used by the poor to the electricity used by industry. Companies in Indonesia, for example, have complained of rolling blackouts and action by the government to force them to shift factory production to weekends.
The emerging power shortages have important implications for both inflation and growth, about which Beijing is to publish fresh figures on Thursday. Second-quarter GDP growth is forecast to have dropped to 10.1 per cent from 10.6 per cent in the first quarter.
27 May 2008
(Stratfor) China is facing higher energy prices at a time when the U.S. economy is weak and the ability to raise prices is limited. As oil prices increase costs, the Chinese continue to export and, with some exceptions, are holding prices. The reason is simple. The Chinese are aware that slowing exports could cause some businesses to fail. That would lead to unemployment, which in turn will lead to instability. The Chinese have their hands full between natural disasters, Tibet, terrorism and the Olympics. They do not need a wave of business failures.
Therefore, they are continuing to cap the domestic price of gasoline. This has caused tension between the government and Chinese oil companies, which have refused to distribute at capped prices. Behind this power struggle is this reality: The Chinese government can afford to subsidize oil prices to maintain social stability, but given the need to export, they are effectively squeezing profits out of exports. Between subsidies and no-profit exports, China’s reserves could shrink with remarkable speed, leaving their financial system — already overloaded with nonperforming loans — vulnerable. If they take the cap off, they face potential domestic unrest.
China’s Quest for Energy Security
(Rand) China’s two decades of rapid economic growth have fueled a demand for energy that has outstripped domestic sources of supply. China became a net oil importer in 1993, and the country’s dependence on energy imports is expected to continue to grow over the next 20 years, when it is likely to import some 60 percent of its oil and at least 30 percent of its natural gas. China thus is having to abandon its traditional goal of energy self-sufficiency — brought about by a fear of strategic vulnerability — and look abroad for resources. This study looks at the measures that China is taking to achieve energy security and the motivations behind those measures. It considers China’s investment in overseas oil exploration and development projects, interest in transnational oil pipelines, plans for a strategic petroleum reserve, expansion of refineries to process crude supplies from the Middle East, development of the natural gas industry, and gradual opening of onshore drilling areas to foreign oil companies. The author concludes that these activities are designed, in part, to reduce the vulnerability of China’s energy supply to U.S. power. China’s international oil and gas investments, however, are unlikely to bring China the energy security it desires. China is likely to remain reliant on U.S. protection of the sea-lanes that bring the country most of its energy imports.
China’s Energy Security Policy and Its International Implication
Hongtu ZHAO, China Institutes of Contemporary International Relations
Africa, China, the United States, and Oil
By David Shinn, Adjunct Professor, Elliott School of International Affairs, The George Washington University
(CSIS Africa Policy Forum) Two Chinese academics wrote last year in the Far Eastern Economic Review that “energy security is already playing an increasingly important role in Sino-U.S. relations, intensifying friction on regional issues.” They cited, for example, policy disagreements between the United States and China over Sudan. Although Sudan is not a source of crude for the United States, it supplies about 7 percent of China’s imports. China also has significant energy investments in Sudan. As the United States tries to isolate or punish countries like Sudan, China has concluded that they are important to its energy security and the rapid growth of its economy. The two Chinese academics argued that the legitimacy of the Chinese Communist Party depends on this continuing strong and sustained economic growth.
Pursuit of the Pariah: Iran, Sudan and Myanmar in China’s Energy Security Strategy
Beijing is on the hunt for energy, willing to trade economic and military aid; access to China’s markets; and diplomatic support at the UN for the energy it needs. In the process it is pursuing relations with pariah states that the US seeks to marginalise. This gives rise to a tension that is at odds with China’s so-called ‘new diplomacy.’ It is important for Australia and the rest of the world that these two energy hungry states adopt a co-operative energy security strategy but there are significant hurdles in the way.
Grappling with Rapid Energy Demand Growth
(Brookings) China’s blistering economic growth has made access to adequate energy supplies an increasingly important priority. It is the world’s second largest consumer and third largest producer of primary energy. From 2000 to 2005, China’s energy consumption rose by 60 percent, accounting for almost half of the growth in world energy consumption.
The country is able to meet more than 90 percent of its energy needs with domestic supplies—largely because of abundant coal reserves and a coal-based economy.
However, it imports almost half of the oil it consumes. Self-sufficient in oil as recently as 1993, China became the world’s second largest consumer of oil behind the United States in 2003. A year later it was the number three importer of oil after the United States and Japan. Between 2000 and 2005, China was responsible for about one quarter of the growth in world oil demand, but only accounted for less than 8 percent of global consumption. However, imports are projected to account for 60–80 percent of China’s oil consumption by 2020.
China invests heavily in Sudan’s oil industry
Sudan is China’s largest overseas oil project. China is Sudan’s largest supplier of arms, according to a former Sudan government minister.
(Energy Bulletin) LEAL, Sudan, Dec 23, 2004 — On this flat and dusty African plain, China’s largest energy company is pumping crude oil, sending it 1,000 miles upcountry through a Chinese-made pipeline to the Red Sea, where tankers wait to ferry it to China’s industrial cities. Chinese laborers based in a camp of prefabricated sheds work the wells and lay highways across the flats to make way for heavy machinery.
Only seven miles south, the rebel army that controls much of southern Sudan marches troops through this sun-baked town of mud huts. For years, the rebels have attacked oil installations, seeking to deprive the Sudan government of the wherewithal to pursue a civil war that has killed more than 2 million people and displaced 4 million from their homes over the past two decades. But the Chinese laborers are protected: They work under the vigilant gaze of Sudanese government troops armed largely with Chinese-made weapons — a partnership of the world’s fastest-growing oil consumer with a pariah state accused of fostering genocide in its western Darfur region.
China’s transformation from an insular, agrarian society into a key force in the global economy has spawned a voracious appetite for raw materials, sending its companies to distant points on the globe in pursuit of them — sometimes to lands shunned by the rest of the world as rogue states. China’s relationship with Sudan has become particularly deep, demonstrating that China’s commercial relations are intensifying human rights concerns outside its borders while beginning to clash with U.S. policies and interests.