The world is watching a high-stakes energy drama unfold in the Middle East.
Tensions in the Persian Gulf threaten to close the Strait of Hormuz, through which 20% of the world’s oil and LNG pass. Global energy prices have surged sharply: East Asian LNG up 87.7%, Brent crude 79.3%, and European LNG 58.7%.
For industrial economies, these spikes mean soaring production costs, power supply strains, and severe damage to export competitiveness.
Amid the chaos, one major economy stands out for its strong resilience: China.
As the world’s largest importer of oil and gas, and a top user of the Strait of Hormuz, China has avoided the worst of the global energy storm. This is not luck. It is the result of long-term strategic planning, structural energy reforms, and a robust power grid that buffers its manufacturing sector.
China maintains a balance between high oil and gas imports and low overall external energy dependence.
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While crude oil import dependence reaches 73% and natural gas 40%, China’s overall external energy dependence — measured by primary energy consumption — stands at around 16%. This balance comes from a decades-long effort to build a domestic-backed, diversified energy system.
First, coal remains the cornerstone of China’s energy security.
China is the world’s top coal producer with sufficient reserve capacity to offset supply gaps. Oil and gas together account for only 26% of China’s total primary energy consumption, far lower than in most industrialized economies.
Only 6.6% of China’s oil and 0.6% of its natural gas come directly from the Persian Gulf. Meanwhile, China’s strategic petroleum reserve covers more than 100 days of net imports, providing a strong buffer against short-term supply disruptions.
Second, China’s low-carbon transition is strengthening energy resilience.
Renewable energy — including hydropower, wind, and solar — now accounts for 34% of electricity generation. Nuclear power contributes another 9%. This diversification reduces exposure to price volatility in any single fuel source.
In an increasingly electrified world, electricity cost and reliability have become central to industrial competitiveness.
The share of electricity in global final energy consumption has risen from 17.6% in 2010 to 21.2% today. Stable, low-cost power directly shapes a country’s export advantage.
China’s core strength lies in its power grid being largely decoupled from global oil and gas markets, supported by a regulated pricing system.
Coal accounts for 58% of electricity generation, with nearly all coal sourced domestically. Gas-fired power makes up only 3.2%, and oil-fired power less than 1%. Global fuel prices have very limited direct impact on China’s electricity costs.
Unlike Europe’s marginal pricing system — where gas prices set electricity rates even with a small share — China controls industrial electricity prices. This keeps costs predictable and stable for manufacturers.
By comparison, Japan, South Korea, and Taiwan rely on LNG for 34%, 29%, and 43.3% of their electricity respectively. They face intense cost pressure from global price spikes.
China’s manufacturing sector, which makes up 25% of the global total, benefits from consistent domestic power supply.
It should be noted that China is not fully insulated from international energy markets.
Global oil and gas prices still transmit indirectly through chemical raw materials, logistics, and imported equipment. Coal price fluctuations, renewable energy intermittency, and cross-provincial grid coordination also create real pressures for power supply and cost control.
The ongoing energy turmoil is remaking the global manufacturing and trade map.
East Asian industrial economies are under heavy pressure.
South Korea’s annual energy costs could rise by $30 billion. Taiwan’s electronics industry faces blackout risks on top of supply chain problems. Vietnam, Thailand, and India are also squeezed.
Thailand uses LNG for 68% of its electricity. India relies on LNG for 20% of its natural gas demand. Their export sectors — from textiles to electronics — are losing competitiveness.
Germany, Italy, and other European countries have not fully recovered from the 2022 energy crisis. High electricity prices erode profits and push some industries to relocate, weakening their competition with Chinese goods.
The United States is relatively insulated but not a direct rival.
As a natural gas self-sufficient economy and net exporter, the US is less affected. However, the two countries compete in limited manufacturing sectors, so America’s energy advantage does not directly challenge China’s position.
China has repeatedly shown strong resilience during global crises.
During the COVID-19 pandemic, China was the first major economy to recover. Its global export share rose from 13% to 14.9%.
After the outbreak of the Russia-Ukraine conflict, China’s “new three goods” — electric vehicles, lithium batteries, and solar panels — drove 29% of export growth. Stable energy and power costs supported this performance.
If the Strait of Hormuz remains blocked for a long period, China’s manufacturing stability will become even more attractive. Its 2026 export growth could exceed the projected 4.0%.
Still, risks remain.
A prolonged energy conflict could trigger a global recession and weaken external demand. Higher global energy prices and domestic transition costs will eventually affect consumer spending.
Long-term challenges also include energy transition costs, grid investment, and regional energy balance.
China’s response to the current energy turbulence shows the value of a resilient energy system.
A domestic-resource-based structure, diversified supply, and a controllable power grid help China hedge external risks and turn crises into opportunities to strengthen industrial competitiveness.
This is a lesson for other regions, especially Africa, where energy security remains fragile.
Prioritising domestic energy resources, diversifying supply sources, and building reliable power infrastructure are not just sustainability goals. They are core strategies for industrial survival and economic security.
China’s model cannot be copied mechanically due to differences in resources, institutions, and development stages. But the logic of self-control, diversified balance, and bottom-line protection is universally valuable.
In an uncertain global energy future, countries that build resilient energy systems will be best positioned to thrive.
*Roxette Mikela Pazvakavambwa is an independent commentator focusing on industrial policy, international trade, cultural differences, and macroeconomic strategies.