Transcript To What Extent Will China`s Dependence on Energy Harm it`s

To What Extent will China’s
Dependence on Energy Harm
its Potential to become The
Economic Superpower?
Shfya and Hissa
https://images.angelpub.com/2012/01/1227
9/china-energy.jpg
Thesis: This presentation will argue that China’s dependence on energy will
eventually lead to environmental issues and economic uncertainty and thus can
harm it potential to become the economic superpower.
● Area: 9.6 million sq km
● Population: 1,367,485,388
● Government: Socialist Single-Party
State
● GDP (PPP): $19.51 trillion
● Currency: Yuan Renminbi
(2015 est.)
(2015 est.)
http://www.lib.utexas.edu/maps/middle_east_and_asia/asia_east_pol_2004.jpg
Profile
China’s Global Status
Potential to Become an Economic Superpower:
IMF rated China as #1 economic superpower in
the world
Produced 17% of world GDP (2014)
China’s performance is inspiring to
medium/low income countries
Factors of success:
Politics
International trade
Growth rate
http://i.telegraph.co.uk/multimedia/archive/03556/440818_China_sm
oge_3556923b.jpg
Trade
Top Imports:
Top Import Partners:
U.S.A: 18%
Oil: 11.8%
Hong Kong: 14.6%
Machines, engines, pumps: 9.3%
Japan: 6%
Medical, technical equipment: 5.9%
South Korea: 4.4%
Ores, slag, ash: 5.7%
https://www.porttechnology.org/ima
ges/uploads/news/seatrade_global.
jpg
Electronic equipment: 25.7%
Germany: 3%
Double-digit increase in economic growth
Creating new jobs and raising living standards
Geography:
Agricultural land: 54.7% - located to the east,
explains population distribution
90% of the population concentrated in the
southeast; every factory or highway built
displaces prime agricultural land
Natural resources:
http://www.lib.utexas.edu/maps/middle_east
_and_asia/china_agricultural_86.jpg
Shift from agriculture to industrial development is a
product of circumstance:
http://2.bp.blogspot.com/GrAhSsEMR-M/Ui7UOieMVI/AAAAAAAAKR0/aCsmmdpNUM/s1600/population_distribution.jp
Resource Scarcity
Energy
Shift from an agricultural base to an industrial
powerhouse
Largest energy consumer in the world
Oil consumption growth = 43% of
world’s consumption growth (2014)
Rapidly increasing energy demand
Coal = 66% of total energy (2012)
Petroleum and other liquids: 20% of
total energy consumption (2012)
China’s energy consumption structure vs. the world
Data Source: BP
(2011)
Coal
China is the world’s top producer,
consumer, and importer of coal.
Half of global consumption
Contributed to the economic growth
From an exporter to importer
Results
China is the leading CO2 emitter (8,106
million metric tons of CO2 in 2012)
Oil
● China became the largest global net
importer of oil in 2014, surpassing
the United States.
● Average net total oil import 6.1bbl/d
in 2014.
● The International Energy Agency
expects China's imports of oil to
triple by 2030.
● Import dependency increased from
30% in 2000 to 57% in 2014 (EIA)
Crude Oil Imports
Diversify its sources of crude oil imports
However, the Middle East largest source of crude
imports (3.2 million bbl/d (52% in 2014)).
Global oil supply disruption in 2011/2012:
-Sudan/South Sudan production dropped from
260,000 bbl/d in 2011 to zero in 2012
-Libya 2011.
Energy Security
Energy Security is risky and uncertain
China depend on foreign imports:
Half of the imports from the Middle East meaning
some political instability
Long distance (the Straits of Malacca, Hormuz, and
Suez )
Any disruption means slowing down the economic
growth in China.
https://www.technologyreview.co
m/i/legacy/0107_note_energy.tif.j
pg?sw=1180
Energy Security
11th Five Year Plan
12th Five-Year Plan
Some policies that would:
diversifying energy resources by increasing
production of natural gas and nuclear power.
2. exploring to find more new energy resource
locations at the global level; diversifying import
3. Increase the role of the Chinese navy to protect
Chinese tankers:
Changi, Singapore
However:
It is very difficult to change energy supply and demand
structure.
●
●
●
1.
http://navaltoday.com/wp-content/uploads/2014/07/U.S.-Navy-ShipsArrive-at-Changi-Naval-Base.jpg
Energy Diplomacy
Chinese leadership adopted an “energy
diplomacy” strategy.
US’s influence sphere vs China’s energy
diplomacy.
China’s foreign policy and new
challenges.
http://globaleconomicwarfare.com/wpcontent/uploads/2013/05/russia-china-syria-afp670.jpg
Environmental Effects
World’s leading CO2 emitter
8106 mmt (2012)
Projected ⅓ rise in carbon emission,
peak in 2030
Increasing pollution
Heavy industry requires high power
Air pollution
Acid rain, smog, global warming
Health issues
https://static-secure.guim.co.uk/sysimages/Environment/Pix/columnists/2009/12/4/1259949641345/COP15
-China-and-carbon-ai-001.jpg
Solutions
Innovation:
Moving toward a high tech industry.
Important for energy dependency and
development and growth in the future.
China must generate two to three percentage points
of annual GDP growth through innovation (the
$3 trillion to $5 trillion a year to GDP by 2025)
From an “innovation sponge” to “into a global
innovation leader”
Some obstacles for Innovation:
1.non-existent intellectual property protection.
2. corporate cultures that don’t support risk taking.
3. Improving higher Education system.
http://www.mckinseychina.com/wpcontent/uploads/2014/01/innovation669x350.jpg
Renewable Energy
Renewable energy law - 2005
Achieving sustainable development
$52 billion in clean energy investment
(2011)
Source for energy security
Energy:
Hydropower
Wind power
Solar power
https://web.archive.org/web/20160419162245im_/http://climatenexus.org/sit
es/default/files/china3.png
Conclusion
Sources
https://www.eia.gov/beta/international/analysis.cfm?iso=CHN
http://www.worldstopexports.com/chinas-top-import-partners/
http://www.scmp.com/news/china/article/1294075/chinas-transformation-industrial-powerhouse-eating-away-resources
http://www.worldstopexports.com/chinas-top-10-imports/
http://www.scmp.com/news/china/article/1294075/chinas-transformation-industrial-powerhouse-eating-away-resources
https://yearbook.enerdata.net/#energy-consumption-data.html
http://www.brookings.edu/fp/cnaps/papers/tang2006.pdf
https://www.researchgate.net/publication/237428477_China's_Global_Oil_Diplomacy_Benign_or_Hostile
http://asiasociety.org/files/pdf/Delivering_Environmentally_Sustainable_Economic_Growth_Case_China.pdf
http://www.brookings.edu/research/papers/2005/12/globaleconomics-mckibbin
http://www.economist.com/node/10853534
Sources
http://rc41.ipsa.org/public/Santiago_2009/China.pdf
http://www.brookings.edu/~/media/research/files/papers/2011/7/china-energy-zhang/07_china_energy_zhang_paper.pdf
http://www.worldscientific.com/doi/suppl/10.1142/9668/suppl_file/9668_chap01.pdf
https://www.iea.org/media/freepublications/security/EnergySupplySecurity2014_China.pdf
https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html
http://www.huffingtonpost.com/nake-m-kamrany/chinas-rise-to-global-eco_b_6544924.html
http://www.telegraph.co.uk/finance/economics/12116018/How-China-became-the-global-threat-everyone-saw-coming.html
http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/gauging-the-strength-ofchinese-innovation
http://www.mckinsey.com/global-themes/asia-pacific/a-ceos-guide-to-innovation-in-china