The Power of China

In 2023, China was both the largest producer and importer of coal, and the largest importer of oil. It’s also the largest importer of lithium, and controls 60% of the world’s lithium mining capacity.

There are those who sharply criticize the PRC’s expanding use and production of fossil fuels. In 2022 alone, China produced more than 4.8 billion tons of coal and consumed just under 5 billion tons, making up 53% of global consumption. In that same year, it permitted four times more coal plants to be built on Chinese soil than in 2021—equivalent to two new coal power plants per week, and six times the number of plants starting construction throughout the rest of world.

Others criticize energy’s role in China’s foreign policies and partnerships. In 2023, the PRC imported 11.3 million barrels of crude oil per day, 10% more than the year before. It imports large quantities of discounted oil from Russia in the face of efforts by the US and Europe to economically isolate the Kremlin. It also imports vast quantities of oil from Iran. As part of its Belt and Road Initiative, which some say too often strangles developing nations with unsustainable debt, more than 60% of China’s energy financing has gone toward nonrenewable resources.

But the PRC is also criticized for its ambitious production of renewable energy and technologies. China spent $250 billion per year between 2021 and 2023 on renewable energy—about one third of all such energy investments worldwide, and more than all developing nations combined. In the solar energy sector, the PRC achieved massive growth in 2023—installing more solar panels than the US ever has. In fact, over the past two decades, China’s share of global production of solar panel components has increased from zero to 85%. This growing dominance has led to calls in the US for steep tariffs and restrictions on Chinese-made solar technology.

Still more criticism is aimed at the PRC for its pursuit of critical minerals at the heart of the world’s transition to a new energy future, especially around advanced battery technology. China is not only the largest importer of lithium, which is essential to most new battery innovations, but it is also the world’s third-largest producer. On top of domestic production, the PRC has acquired approximately $5.6 billion worth of lithium assets in countries like Chile, Canada, and Australia over the last decade. The Chinese banks who finance critical minerals mining and processing are moving aggressively and show little aversion to either political instability or poor living standards in client countries. On the other hand, US legislation passed in 2022 offers incentives to electric-vehicle manufacturers to buy minerals domestically or from countries with whom the US has free-trade agreements. Even with the US government’s aggressive actions aimed at developing and supporting US and US-aligned critical mineral sectors, the PRC’s share of cobalt supply—also essential for electric vehicle batteries—rose over the last few years, reaching 44% of global output in 2023.

Finally, the PRC is also receiving criticism in the West for its production and sale of products that are part of the new energy transition—like electric vehicles—at what the US and Europe have termed unfairly subsidized low prices. On June 12, the European Union announced plans to impose additional tariffs of up to 38% on electric vehicles imported from China as part of their strategy to safeguard the region’s manufacturers, following similar tariffs proposed by the Biden administration. As said by US Treasury Secretary Janet Yellen, the US is worried that China’s unfair competition in the sector “distorts global prices” and “hurts American firms and workers, as well as firms and workers around the world.”

In other words, the PRC has been criticized for consuming and producing too much in fossil fuels. It has been criticized for how it’s securing the resources necessary for renewable energy production. And it’s been criticized for underpricing and subsidizing many of its products that are part of the world’s energy transition.

While the PRC is certainly deserving of criticism for its single-minded pursuit of energy dominance, perhaps WE should be a little more “single-minded” ourselves.