The current energy shock may feel sudden, but for China, it is anything but unexpected. Long before tensions escalated in the Middle East, Beijing had already begun reworking its energy strategy to withstand exactly this kind of disruption.
According to a report by The New York TimesChina steadily built up oil stockpiles, expanded renewable energy at scale, and pushed technological shifts to cut reliance on imported raw materials. Together, these moves have begun to reshape its vulnerability to global supply shocks.
At the centre of this strategy was a clear policy shift driven by the ruling Communist Party, which views industrial strength as a pillar of national security. “You have seen more top-down industrial policy, more guidance from the central government to develop certain strategic sectors,” said Heiwai Tang of the University of Hong Kong, as quoted in the report.
HOW CHINA IS REDUCING OIL RELIANCE
Energy security became the linchpin. Over the past decade, China has aggressively reduced its dependence on oil in key sectors. It is now the world’s largest market for electric vehicles, sharply cutting demand for gasoline and diesel. At the same time, it has leaned on coal and domestic production to replace imported petrochemicals used in manufacturing.
Government-backed investments have been central to this shift. The report notes that China now uses domestic coal to produce chemicals such as methanol and synthetic ammonia, reducing the reliance on foreign inputs that once powered its factory boom. Even as it remains the world’s largest importer of oil and gas, Beijing’s consumption patterns are changing. Demand for refined oil products has declined for two consecutive years, with some experts suggesting overall oil consumption may have peaked.
China’s concerns over supply disruption are not new. The report traces this back to early fears over maritime chokepoints such as the Strait of Malacca. In 2004, Beijing created an emergency petroleum reserve and has continued to expand it, especially in recent months.
This long-term planning appears to be paying off. As the Strait of Hormuz faces disruption — a critical route for oil flowing to Asia — China has shown greater resilience than many other economies, the report said. Meanwhile, countries like Vietnam and the Philippines, facing shortages, have turned to Beijing for support. “China stands ready to strengthen coordination and collaboration and jointly address energy security issues,” a Chinese foreign ministry spokesman said.
SELF-RELIANCE ACCELERATED BY GEOPOLITICAL TENSIONS
The push toward self-sufficiency accelerated during the first term of Donald Trump, whose trade and technology confrontation with China prompted deeper strategic shifts.
“Everything that Trump does triggers even more self-reliance from Beijing,” said Joerg Wuttke, a longtime industry executive in China, as cited by the report.
By 2020, China had formalised this direction in an official roadmap published in Qiushi, calling on industries to insulate the country from external shocks and “develop technologies faster than competitors overseas.”
Analysts say this period marked a turning point. “Trump 1.0 was a very clear rupture that changed China’s geopolitical calculus,” said Lauri Myllyvirta, noting that it “reactivated old fears” about supply chain vulnerability.
COAL AS A BRIDGE, RENEWABLES AS THE FUTURE
One of the more striking aspects of China’s strategy has been its dual approach. While investing heavily in solar, wind and hydropower, it has also doubled down on coal as a short-term alternative to oil in petrochemical production.
The scale is significant. Coal use in chemical production rose sharply between 2020 and 2025, surpassing total coal consumption in the United States, according to the report. Chinese officials have described coal as a temporary bridge, but in the current crisis, it is proving effective. For example, while global fertiliser prices have surged due to the war, China’s domestically produced supply — largely coal-based — has remained significantly cheaper.
Even before the latest escalation involving Iran, China had already secured a dominant position in several supply chains, including chemicals and industrial materials.
“The Chinese most likely will see this as encouragement on the path to self-sufficiency,” said Johanna Krebs of the Mercator Institute of Chinese Studies, summing up a strategy that appears increasingly validated by global instability.
The conflict has exposed vulnerabilities across global energy markets. But for China, it has also highlighted the payoff of years of quiet, state-driven preparation.
– Ends
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