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China Member Committee

The China National Committee aims to promote sustainable energy development in China, as a part of the World Energy Council's energy vision. As a member of the World Energy network, the organisation is committed to representing the Chinese perspective within national, regional and global energy debates. The committee includes a variety of members to ensure that the diverse energy interests of China are appropriately represented. Members of the committee are invited to attend high-level events, participate in energy-focused study groups, contribute to technical research and be a part of the global energy dialogue.

Energy in China

china, critical uncertainties, action priorities

Comparing 2019 and 2020 results, China’s energy leaders reconfirm uncertainties around US Policy associated with Trade Barriers, while adding new uncertainties about Middle East Dynamics, Cyber Threats and the Hydrogen Economy that all seen as having greater impact. Action Priorities continue to build around decarbonisation and digitalisation issues, with great attention put on innovation as a development strategy.

US Policy is a key critical uncertainty for China given the unresolved trade disputes with the US and imposition of trade tariffs by both sides. In December 2019, the US and China reached a phase one trade deal that was subsequently signed in January 2020. However, the agreement is a preliminary compromise deal and the trade relationship between the world’s two largest economies remains a key uncertainty for the Chinese economy and the energy sector.

Trade Barriers uncertainties are closely related to concerns over US policy. The imposition of trade tariffs by Washington on thousands of Chinese goods hit exports with a knock-on effect on the Chinese economy. The IMF expects a moderate economic slowdown in 2019 due to uncertainty around trade tensions and other risks. China’s energy demand growth slowed to 1.1% p.a. in 2019, less than one fifth of its pace in the last 22 years (5.9% p.a.) according to BP. Since China is the world’s largest oil importer, global oil demand was also impacted.

Hydrogen Economy emerges as a Critical Uncertainty with increased impact with China focusing increasingly on hydrogen for mobility as a preferred alternative to batteries. In 2018, the subsidy for fuel cell passenger vehicle was US$29,700 for each car, and US$44,500/ US$74,300 for each small sized truck and bus/ mid-large sized truck. Additionally, several municipal governments in China are heavily subsidising both refuelling stations and the price of hydrogen.

Coal is one of three emerging Action Priorities for China. Although the country is trying to replace coal with lower carbon fuels and renewables, it remains a large coal consumer. This is a challenge to the government’s efforts to implement its ‘Blue Sky Plan’. To address this, China is implementing measures such as switching to gas and deploying renewable energy.

Sustainable Cities are the second Action Priority, which the Chinese government is fostering through a low-carbon cities programme. China is creating new urban planning clusters of urban living where home, work and services are concentrated in one area as a way of reducing emissions from transportation.

Electricity Prices are the third Action Priority. The Chinese government cut electricity prices for small and medium sized industrial and commercial consumers by 10% for the second time in 2019. Addressing price volatility is a key focus during ongoing electricity market reforms, which not only aim to improve system efficiency, but also to deliver sustainable investment and social benefits.

China is looking to the future with an eye to be the leader in renewable energies. China is hoping to deal with this over-dependence on fossil fuels partly by rebalancing the economy away from energy-intensive industries. In recent years, through a combination of subsidies, policy targets and manufacturing incentives, China has spent more on cleaning up its energy system than the United States and the European Union combined. China is also upgrading its regulatory structure. The government is using technology, innovation and power-market reform to break the monopoly of the grid.

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