Rajan Wilcox
China's energy portfolio consists mainly of domestic coal, oil, and gas from both domestic and foreign sources, with small quantities of uranium. China has the third-largest coal reserves in the world, which it has historically relied on to meet its domestic energy needs. In 2019, coal supplied about 58% of China's total energy consumption. China is also the world's largest crude oil importer and the second-largest consumer. China's oil imports come from countries like Saudi Arabia, Russia, Iraq, Angola, and Brazil. China has diversified its oil portfolio by investing heavily in Africa, offering economic development loans to African states in exchange for favorable access to oil reserves. China has also focused on increasing domestic gas production, with particular attention given to developing unconventional reserves such as shale, coalbed methane, tight gas, and methyl hydrate.
| Characteristics | Values |
|---|---|
| Coal reserves | Third-largest in the world |
| Oil reserves | Oil self-sufficient in 1963 |
| Oil imports | Largest crude oil importer |
| Oil consumption | 58% of total energy consumption in 2019 |
| Oil suppliers | Saudi Arabia, Russia, Iraq, Angola, and Brazil |
| Gas | Small quantities of uranium |
| Gas imports | LPG fuel from Australia |
| Gas imports | Gas pipeline from Central Asia |
| Gas imports | Gas from Africa |
| Nuclear power reactors | 53 |
| Nuclear energy generation | 50,769 MW |
| Renewable energy | 70% of electricity from fossil fuels |
| Renewable energy | 1,000 gigawatts of solar power by 2026 |
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What You'll Learn
China's third-largest coal reserves
China holds the world's third- or fourth-largest coal reserves, which have historically been leaned on to satisfy its domestic energy needs. In 2020, China’s proved coal reserves were estimated at 143 billion tonnes, or 149,818 million tons, accounting for about 13% of the global total. This is equivalent to 35 years of production at current rates. China is the largest producer and consumer of coal and coal power in the world, producing approximately 4.71 to 4.8 billion tons of coal per year, over half of the global total. China operates approximately 4,700 coal mines as of 2021, with average production capacity above 1.1 million tons per annum.
China's coal consumption is closely linked to the country's industrialization. Between 2002 and 2013, coal accounted for 77% of the increase in primary energy demand, driven mainly by coal consumption in the cement, chemical, and steel sectors. In 2020, 60% of coal was used for electricity and heat generation, with industry accounting for an additional one-third of demand. In 2021, 62.6% of China’s power generation came from coal, with a slight decrease to 59% in 2024. China had 1100 GW of installed coal-fired power capacity in 2021, more than half of the world’s total.
In recent years, China has reiterated the need to "give full play to coal's role" in meeting the nation's "basic energy needs." The Chinese government’s renewed emphasis on coal dates back to at least October 2019, when Premier Li Keqiang highlighted the role of coal in the country's "new energy security strategy." China's 14th Five-Year Plan emphasizes coal production as a means of ensuring supply security, with a goal for the country's "comprehensive energy production capacity" to exceed 4.6 billion tons of standard coal equivalent.
Despite China's vast coal reserves and production, the country is also turning to nuclear power and renewable energy sources to decrease its reliance on fossil fuels. China has emerged as the world’s single largest investor in clean energy transition, investing $266 billion in energy transition measures in 2021. In accordance with the 2016 Paris Agreement, China committed to making non-fossil fuel energy 20% of its energy supply by 2030 and to peak CO2 emissions by 2030.
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Oil self-sufficiency achieved in 1963
China's energy portfolio consists of domestic coal, oil, and gas from both domestic and foreign sources, as well as small amounts of uranium. China has the third-largest coal reserves in the world, which it has historically relied on to meet its domestic energy needs. In 1949, the Yumen Oil Field was the only domestic oil field capable of supporting industrial production, but it fell short of meeting the country's oil requirements.
In the 1950s and 1960s, China made significant discoveries of major oil deposits, including the Daqing oil field in Heilongjiang, which became the backbone of Chinese oil production for several decades. By 1963, the Daqing oil field was producing nearly 2.3 million tons of oil, and China achieved oil self-sufficiency. This was made possible by the transfer of Soviet oil extraction technologies before July 1960, which aided in the development of domestic reserves.
However, rising domestic demand caused China to become a net oil importer by 1993 and the world's largest oil importer by 2013. China's crude oil imports have been steadily increasing, with an average of 10.1 million barrels per day in 2019. China has diversified its oil sources by investing in Africa and securing maritime energy shipments, with over 80% of its maritime oil imports passing through the Strait of Malacca.
China has also been transitioning towards cleaner energy sources to reduce its reliance on fossil fuels. It has become the world's largest investor in the clean energy transition, investing $266 billion in energy transition measures in 2021. China has committed to increasing the share of non-fossil fuels in its primary energy consumption and plans to bring its installed capacity of wind and solar power to over 1.2 billion kilowatts by 2030.
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China's largest crude oil importer status
China holds the third-largest coal reserves in the world and has historically relied on them to meet its domestic energy needs. However, China has emerged as the world's largest importer of crude oil, surpassing the United States in 2017. In 2023, China imported a record-breaking 11.3 million barrels per day (b/d) of crude oil, a 10% increase from 2022. This increase in crude oil imports can be attributed to several factors, including independent refineries in northeast China, higher refinery runs, expanding refinery capacity, and the availability of discounted crude oil from Russia due to sanctions.
China's crude oil imports come from various regions, with Russia, Saudi Arabia, and Iraq being the main sources in 2023. Russia became China's top source of crude oil imports that year, supplying 19% of its total imports. China has also diversified its oil portfolio by investing in Africa, offering economic development loans to African states in exchange for favourable access to oil reserves. South Sudan, for example, contributes a minuscule amount to China's total oil imports, but 23.1% of its oil exports went to China in 2018.
China's increasing refining capacity supports the country's transportation fuel needs and its growing petrochemical industry. The country has been building inventories of strategic petroleum reserves, which has contributed to its rise in crude oil imports. Additionally, China has reformed its refining sector by reducing restrictions on imports and exports, further boosting its crude oil imports.
China's commitment to reducing its reliance on fossil fuels is evident through its investments in clean energy alternatives. In 2021, China was the world's largest investor in the clean energy transition, allocating $266 billion towards energy transition measures. China has also turned to nuclear power, operating 53 nuclear power reactors as of January 2022 and aiming to increase its nuclear energy capacity by 2025.
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Diversification of oil portfolio
China has the third-largest coal reserves in the world, which it has historically relied on to meet its domestic energy needs. However, China has also been the world's largest contributor to carbon emissions, with coal contributing over 65% of rural household emissions in 2015. Recognising the need to transition to cleaner energy sources, China has emerged as the world's largest investor in clean energy transition. In 2021, the country invested $266 billion in energy transition measures, accounting for over a third of the global total.
China has also diversified its oil portfolio by investing heavily in Africa. Africa only possesses about 9% of the world's proven petroleum reserves, but China has offered economic development loans to African states in exchange for favourable access to oil reserves. For instance, China has considerable oil investments in South Sudan, from where it imported 23.1% of the country's oil exports in 2018.
Securing maritime energy shipments is another critical energy security priority for China. Over 80% of Chinese maritime oil imports by sea pass through the Strait of Malacca. China has also turned to nuclear power to decrease its reliance on fossil fuels. As of January 2022, China operated 53 nuclear power reactors, generating a total of 50,769 MW of energy. China's national economic blueprint, the 14th Five-Year Plan, outlined plans to increase the installed capacity of operating nuclear power plants to 70,000 MW by 2025.
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China's commitment to net-zero carbon emissions by 2060
China has the third-largest coal reserves in the world and has historically relied on fossil fuels to satisfy its domestic energy needs. However, China has also emerged as the world's single largest investor in clean energy transition. In 2021, China invested $266 billion in energy transition measures, accounting for more than one-third of the global total.
In 2020, China's leader, Xi Jinping, made a surprise commitment to drastically reduce emissions and reach carbon neutrality by 2060. This was the first time China had publicly declared a timeline for action on carbon neutrality. Xi Jinping pledged to strictly limit the increase in domestic coal consumption and increase the share of non-fossil fuels in primary energy consumption to around 25% by 2030. China also signed a joint declaration with the United States at the 2021 UN Climate Change Conference in Glasgow, which included measures for cooperating on climate-related issues, such as reducing methane gas emissions.
To achieve carbon neutrality, China has adopted a three-step strategy. First, achieve carbon peak by 2030; second, rapidly reduce carbon emissions by 2045; and finally, reach deep decarbonization levels and achieve carbon neutrality by 2060. China is turning to nuclear power and renewable energy sources to decrease its reliance on fossil fuels. As of January 2022, China operated 53 nuclear power reactors, generating a total of 50,769 MW of energy. China has also diversified its oil portfolio by investing heavily in Africa, offering economic development loans to African states in exchange for favorable access to oil reserves.
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Frequently asked questions
China has the third-largest coal reserves in the world and was oil self-sufficient in 1963. However, since 1996, Chinese oil production has decreased while demand and imports have increased. China is now the world's largest crude oil importer.
China's energy portfolio consists mainly of domestic coal, oil, and gas from domestic and foreign sources. China has diversified its oil portfolio by investing heavily in Africa. It has also constructed an oil pipeline from Kazakhstan and started construction on a Central Asia–China gas pipeline.
China has committed to achieving net-zero carbon emissions by 2060, with carbon emissions peaking in 2030. The country has also pledged to increase the share of non-fossil fuels in primary energy consumption to around 25% by 2030. China is turning to nuclear power and renewable energy sources to decrease its reliance on fossil fuels.
China's future oil reserves, such as the Tarim Basin, are difficult to extract due to technological limitations and are not currently cost-effective. China's energy security involves securing long-term access to sufficient energy and raw materials, with a focus on diversifying its sources to reduce reliance on imports.
