During the China-US trade war, the energy sector has never been a major battlefield for both countries' game. Recently, with the growing intensification of trade sanctions on China by the United States, China's energy security has attracted widespread attention. Confronted with the potential danger of Western countries to the energy supply chain, China has gradually realized the strategic goal of energy self-sufficiency relying on diversified layout, new energy technology innovation and industrial chain independence, especially in the field of new energy has played a leading role in the world.

Classic energy security: diversified supply and reserve

China has been a long-time importer in the tradition of energy but has, through the upgrading of various systems, been able to check threats from all sides.

China relies mainly on the Middle East, Russia and others for crude oil imports. During the first half of 2023, China imported 52.6 million tons of crude oil from Russia, increasing by 27.3 percent year on year, and Russia is China's largest crude oil supplier. In addition, the stable supply of Middle Eastern countries such as Saudi Arabia and Iraq has also enhanced China's energy import security.

Optimization of the natural gas supply chain: While the United States was the primary source of China's liquefied natural gas (LNG) earlier (8.2% of China's imports), the trade war has compelled China to rechannel demand towards Russia and others such as Turkmenistan. China-Russian natural gas co-operative projects account for $100 billion, with pipeline transportation and long-term purchases.

China is also eliminating its excessive dependence on a single country by increasing its reserve of oil and promoting the use of clean energy. For example, the self-sufficiency rate of coal has reached more than 90%, and the stability of electricity supply has been significantly enhanced.

Second, new energy industry: from follower to leader of the world

The emerging energy industry is the key to China's response to the trade war and pursuit of energy independence.

Solar panel industry dominates the global market: China's photovoltaic module production levels over 70% of the world's, exports in 2023 exceeded trillion yuan, even if the United States slapped tariffs, Chinese photovoltaic companies by the construction of Southeast Asia, Latin America and other emerging markets, still maintain competitiveness. Although the "double reverse" investigation of Chinese photovoltaic exports to America is temporary in its impact on exports, China has accelerated domestic substitution due to technology upgrades and cost advantages.

Leading new energy vehicle market: China's production and sales volume of new energy vehicles was world first for over ten years, exports in 2023 exceeded one million, and power battery manufacturing capacity reached about 76% of the globe. BYD, Ningde Times, and others have evaded US trade barriers successfully by building factories overseas and localizing the supply chain.

Breakthrough in energy storage and smart grid: Technological breakthroughs have been made in China's lithium battery and hydrogen energy storage, and the capacity of new energy storage installed will surpass 30 GW by 2025, and the coverage rate of the smart grid has reached 95%, guaranteeing consumption of new energy.

Third, core technology autonomy: break the "neck" link

The US blockades on critical technologies such as semiconductors and rare earths have caused China to accelerate the process of making its fundamental technologies self-reliant.

Domestic substitution of semiconductors: With the United States' prohibition on exporting chips, China has increased research and development investment, like Huawei, SMIC and other giant firms in research of AI chips, automobile level chip continues to make enormous breakthroughs. China's domestic rate of chips has remained over 90% in 2024, gradually cutting off its dependence on the United States.

Monopoly of the rare earth industry chain: China controls approximately 90% of the world's rare earth processing, and began to restrict exporting rare earth processing technology from 2023, directly targeting the high-tech industry in the United States. While the United States is wishing to coordinate with Australia and Vietnam in extracting rare earths, it is difficult to overcome the technical bottleneck within a short term.

Autonomous high-end equipment manufacturing: In wind energy and nuclear energy, China's independently designed 10 MW offshore wind turbines and third-generation nuclear power plants have been commercially operated, reducing dependence on European and American technology.

International cooperation and countermeasures: Building an offensive and defensive energy system

Through multilateral cooperation and countermeasures, China has strengthened its pivotal position in energy security.

"Belt and Road" cooperation on energy: to build energy corridors with the Middle East and Central Asia, such as China-Pakistan Economic Corridor oil pipeline, East route project China-Russia natural gas pipeline, to ensure safety for energy transit channels.

Precise countermeasures: China has levied export restrictions on key items such as mepropionic acid and graphite in response to US sanctions and implemented the Anti-Foreign Sanctions Law to protect domestic enterprises' interests.

Foster international green cooperation: After joining the Paris Agreement and backing the Global Development Initiative, China has enhanced new energy technology cooperation with the EU, ASEAN and other regions of the world, including upgrading cooperation on revising foreign trade agreements with Serbia and Singapore, and expanding access to green products.

The accelerating trade war between China and the United States indicates the fragility of energy security in globalization to us, but at the same time, it also provides an opportunity for Chinese transformation. By the "traditional energy security foundation, new energy breakthrough, technology independent upgrading, strengthening.".