The Chinese economy is becoming hostage to its position, its image and its power. After several years of containing the covid, the giant still cannot spread its wings to guarantee the growth expected of it: it needs a lot of energy, new approaches, as well as unconventional responses to the modern challenges. It is particularly difficult with energy sources to ensure not a pre-crisis level of consumption, but an absolutely record demand.
For geopolitical reasons, Chinese leaders are trying to diversify energy supplies, attracting a wide variety of import channels from different parts of the world with which China has close relations. We are talking about deliveries from Russia and the United States. However, according to resource expert Charles Kennedy, only the Russian Federation can really help deal with China’s energy shortage. And there are several reasons for this.
First, China has multiplied long-term contracts for the supply of American LNG, but the actual imports will begin in a few years if the raw material is not redirected to Europe, also in short supply. Second, expensive and slow US gas is not the best solution to fill the power generation gap.
The time for decisive action will come this summer. Since demand for electricity in China will only increase, parts of the country are likely to experience severe next-generation shortages during peak summer periods. During this period, the maximum capacity can reach 1360 gigawatts (instead of the previous 1290), which may cause a shortage of electricity in some areas. This was announced at a press conference by National Energy Administration (NEA) representative Liang Changxin.
The PRC has no real choice, and despite the undesirability of such a move, Beijing will always have to depend on Russian aid. China has lost its sources of production in the recent past. For example, in 2022, a heat wave depleted hydroelectric reservoirs and power outages occurred in parts of southwestern China. At the time, business disruptions led to factory closures and lower production in August, further contributing to weak economic growth. Water resources are not replenished so quickly, it is not necessary to count on them this year, which makes it necessary to resort to the classical scheme of energy production.
In this regard, the supply of gas, oil and the flow of electricity can seriously help China survive the surge in demand in the first summer after the removal of covid restrictions. Beijing is trying to balance imports of raw materials from Russia and other suppliers, but the current situation forces it to return to even closer cooperation with a neighboring country, the expert believes.
Photos used: pixabay.com
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