China's door of openness in the energy sector will not be closed.

The "seven essentials" for opening a household—firewood, rice, oil, salt, sauce, vinegar, and tea—place "firewood" at the very top. From the perspective of everyday life, firewood has always been the primary source of energy. Over time, Chinese households have steadily upgraded their energy sources, transitioning from burning firewood to using coal, and now even shifting toward oil and gas. "No more tending stoves or scraping away coal ash—just turn on the valve, and with a 'whoosh,' you’ve got instant heat. It’s clean, convenient, and safe. Who’d want to lug around that old coal stove anymore?" says Zhang Nan, a resident of Shunyi District in Beijing. Behind this energy transformation lies not only the rapid development of China’s energy companies as they strengthen themselves, but also the vital role played by international energy cooperation and China’s ongoing commitment to opening up to the world. Since the reform and opening-up policy was introduced—and especially in recent years—China has continuously expanded its openness in the energy sector.

Release date:

2018-05-28

  The "seven essentials" for opening a household—firewood, rice, oil, salt, sauce, vinegar, and tea—place "firewood" at the very top. From the perspective of everyday life, firewood represents energy itself. Over time, Chinese households have steadily upgraded their energy sources, moving from burning wood to using coal, and now even switching to oil and gas. "No more tending stoves or scraping away coal ash—just turn on the valve, and with a gentle 'whoosh,' the fire is lit! It’s clean, convenient, and safe. Who’d want to go back to setting up a coal stove these days?" says Zhang Nan, a resident of Shunyi District in Beijing. Behind this energy transition lies not only the rapid development of China’s energy companies as they strengthen themselves, but also the vital role played by international energy cooperation and China’s ongoing commitment to opening up to the world.

  Since the reform and opening-up policy, especially in recent years, China's energy sector has seen continuously expanding openness to the outside world:

  ——Deepening policy dialogue in the energy sector. Over the past five years, China has established 56 bilateral energy cooperation mechanisms with relevant countries and participates in 29 multilateral energy cooperation frameworks, signing more than 100 cooperative agreements.

  ——Energy infrastructure connectivity has been strengthened. A series of influential projects, including the China-Central Asia Gas Pipeline Lines A/B/C, the China-Kazakhstan Crude Oil Pipeline, the China-Russia Crude Oil Pipeline, and the dual-track pipeline, have been successfully implemented.

  ——The level of smooth energy trade has improved. In 2017, China imported 420 million tons of crude oil from countries including Russia, Saudi Arabia, Angola, Iraq, and Iran, representing a year-on-year increase of 10.1%. Additionally, natural gas imports reached 94 billion cubic meters from nations such as Turkmenistan, Australia, Qatar, Malaysia, and Indonesia, up 26.1% from the previous year. Meanwhile, coal imports totaled 250 million tons—netting an increase of 3.2%—from countries like Indonesia, Australia, Mongolia, and Russia.

  Despite such extensive international energy cooperation, China's oil and gas supply remains relatively tight. For instance, at the end of last year, the natural gas shortfall within PetroChina's system alone reached 4.8 billion cubic meters, significantly impacting daily life for residents in some regions.

  Businesses are also being affected by the gas shortage. "After switching from coal to gas, our production capacity remained the same, but in 2017, our gas costs were more than 6 million yuan lower compared to 2014. However, fluctuations in gas supply and seasonal shortages have somewhat impacted the stability of our production," said the production manager of a tofu products company in Zhejiang.

  Perhaps someone might ask: Can China really achieve energy self-sufficiency? In response, energy experts offer this explanation: Over the past 40 years of reform and opening up, while China's energy production has surged dramatically, the country's soaring economic growth and continually improving living standards have driven energy demand to rise far faster than energy output. As a result, it’s now increasingly difficult for us to rely solely on our own resources to meet energy needs—as we once could. Moreover, in today’s global economy, open cooperation has become an irreversible trend. To address China’s current energy challenges, while continuing to prioritize domestic development, deepening international energy partnerships is undoubtedly the only viable path forward.

  In fact, this choice is also determined by China’s own energy endowment. Zhang Shaoqiang, Chairman of the China Coal Processing and Utilization Association, explained: "Among China’s proven fossil fuel reserves, coal accounts for more than 94%, while oil and natural gas make up only about 6%." The biggest drawback of relying primarily on coal as an energy source is the environmental pressure it creates. "Natural gas is a green, clean, low-carbon energy source, and promoting the 'coal-to-gas' transition is clearly the right direction—there’s widespread consensus on this point," said Zhou Dadi, Executive Vice Chairman of the China Energy Research Association. He added that, from the perspective of adjusting the energy structure, reducing coal consumption is an irreversible trend. Therefore, at a time when the global share of oil and gas is steadily rising, China should strengthen its international cooperation in the energy sector and gradually refine and optimize its national energy mix.

  How can we deepen international cooperation in the energy sector? A relevant official from the International Cooperation Department of the National Energy Administration stated: "It is essential for us to continuously expand our channels for importing energy resources, tailored to our own development needs, in order to ensure a steady, clean, and ample energy supply that meets the growing demands of people for a better quality of life." From a global perspective, countries exhibit complementary strengths in terms of energy resource endowments, production capacity, technology, and equipment development. By strengthening energy partnerships with nations around the world, China enables countries to leverage their respective advantages, fostering mutual benefits and win-win outcomes. Moreover, China’s proactive opening-up in the energy industry has not only boosted global economic and energy growth but also contributed significantly to the advancement of the worldwide energy landscape.

  How can we ensure energy security under open conditions? Wang Zhongying, Deputy Director of the Energy Research Institute under China’s National Development and Reform Commission, believes that while strengthening international cooperation is essential—especially given the need to build on domestic foundations—we must first tap into domestic potential to boost reserves, stabilize production, and even increase output. At the same time, diversifying energy import sources is crucial. Last year, China imported 94.63 billion cubic meters of natural gas, a 26.9% increase from the previous year. As a result, the ratio of imports to domestic production expanded from 0.4:1 in 2012 to 0.6:1 today. By 2017, China had already surpassed South Korea to become the world’s second-largest importer of liquefied natural gas (LNG), trailing only Japan. With the accelerated construction of LNG receiving stations, China’s LNG imports have diversified significantly—from initially relying almost exclusively on Australia—to now sourcing from more than 10 countries worldwide. Looking ahead, China’s natural gas imports are expected to continue growing substantially over the coming period, thanks to vast untapped import potential—including U.S. shale gas.

  Wang Zhongyang introduced that the U.S. Energy Information Administration (EIA)’s “2018 Annual Energy Outlook” projects U.S. natural gas production to reach 920 billion cubic meters in 2020, 1.07 trillion cubic meters by 2030, and 1.14 trillion cubic meters by 2040. With U.S. natural gas output soaring significantly, the country is rapidly transitioning from a net importer of natural gas to a net exporter. “Deepening energy trade between China and the U.S. and stepping up efforts to expand energy imports from the United States will not only help improve Sino-U.S. trade relations but also enhance our nation’s energy security.”

  "Of course, although our country has a huge demand for natural gas imports, and the U.S. also boasts significant export potential, China and the U.S. are geographically distant. Whether we can substantially scale up our natural gas cooperation will ultimately depend on the economic viability of future LNG projects," said Wang Zhongying.

  A relevant official from the International Cooperation Department of the National Energy Administration stated that China will not close the door to openness in the energy sector. Instead, it will further expand its opening-up efforts, fostering international energy cooperation on a broader scale, at a higher level, and with greater depth. This includes promoting greater convenience in energy trade and investment, continuously improving the business environment, and building a more open, stable, and sustainable global energy market—while also advancing international energy capacity cooperation.