The world China’s energy revolution has made

Written by Albie Gavshon

Edited by Sami Firdose

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A graph of global GDP over the last two thousand years can tell us a lot about global politics  over the last twenty.[1] China’s return to commanding a hefty share of global production has, in part, corrected the historical anomaly that was Western dominance in the world economy. 

Figure 1: Global GDP shares through history in terms of purchasing power parity. Deutsche Bank.

The ‘great divergence’ between Euro-American and Asian economies had its genesis in an energy revolution in Britian.[2] Britain, through to the 1860s, was the global leader in mining coal at scale for industrial production.[3] China, though possessing abundant coal, used it for heating rather than mining for industrial use.[4] Britain’s energy revolution co-constituted, with its empire in the New World, the state’s global dominance: as Britain industrialised by mining coal, it imported food and exported people to mitigate the destabilisation that rapid economic transformation entailed.[5] Meanwhile, China, absent both coal-driven industrialisation and maritime power, entered into its ‘century of humiliation’. In the decades before and after Mao proclaimed, ‘the Chinese People’ to have ‘stood up’, another energy revolution, in oil, was to propel the United States and the USSR into global predominance, maintaining, for the time being, the oddity that was Western economic dominance.[6]  

In light of these trends, it is not surprising that China’s rise and the unfurling conclusion of the Western-dominated period constitutes an energy revolution of its own. Appositely, a historically unprecedented increase in coal production has been the most prominent energy change underlying Chinese growth. China consumes 30% more coal than the rest of the world put together.[7] In 2024, it produced 26,245 terawatt hours’ worth of coal, compared to the United States’ historical peak at a mere c.6,000.[8] Coal, though, is not the only game in town. China has, since the early 2000s, become the world leader in renewable energy and green electrification. By some estimates, China has 50% more production capacity for solar panels than is thought to be necessary for the entire planet to achieve Net Zero by 2050.[9] Like any other, the Chinese economy also requires oil and gas which, because it lacks significant domestic reserves, places it at as the largest importer of petroleum globally.

Figure 2: Global coal production measured in terawatt-hours. Our World in Data.

The rest of this article proceeds to explore how China’s energy revolution has made the world as it is today. First, I examine how China’s surging demand for hydrocarbons has escalated geopolitical tension and contributed to inflationary pressures. Second, I discuss how China’s emissions and green energy development inflects geopolitics and changes the calculus on climate, placing China at the core of both the climate crisis and its potential resolution. I then argue these trends mean European states need to treat resilience to energy shocks as a core imperative, which requires integrating with China on renewables. More broadly, I suggest, the concentration of carbon emissions and renewable energy sources in China forces us to recognise a shift in agency away from the West.

I: China’s hydrocarbon demand and its discontents

In the 1970s, the United States began to normalise relations with China with the assumption it was an oil-rich state, a potential ‘new Middle East’.[10] Because this reality did not materialise, the low energy prices which characterised the benignity of the 1990s had to come to an end. As China’s economic growth accelerated, it became a net oil importer in 1993, with its oil consumption doubling between 1997 and 2006.[11] The world economy, facing stagnating production, could not cope with Chinese demand. Oil prices surged in the first decade of the millennium.

Figure 3: West Texas Intermediate (WTI or NYMEX) crude oil prices per barrel, 1990-2008. Macrotrends.

The end to the low prices of the 1990s refixed the United States on controlling hydrocarbons in the Middle East, prompting Beijing to begin its long-term effort to mitigate the vulnerabilities of importing oil and gas via maritime chokepoints, most notably the Malacca Strait.[12] China formed pipeline agreements with Russia, acquired Gwadar Port in Pakistan and built a naval base in Djibouti to protect oil flows from the Mediterranean Sea to the Indian Ocean.[13] With the relative inefficacy of Obama’s ‘Pivot to Asia’ counterbalance and the return of the United States’ oil dependency after the conclusion of the domestic shale boom, energy competition between the United States and China has sharpened in the 2020s. Threatening China’s ability to import discounted hydrocarbons looms over Trump’s interventions in Venezuela and Iran, as does balancing Beijing’s ability to choke the supply of resources like rare earths.[14] The disruption to flows from these states drives China closer to Russia, which already accounts for 20% of its crude imports.[15] 

The low oil and gas prices of the 1990s staved off more than geopolitical competition. In keeping inflation low during a period of economic growth, the benign energy environment suppressed latent contradictions in the global financial and monetary systems. With the explosion of oil prices that China’s rise contributed to, inflation returned, driving interest rate increases that failed to achieve their intended effect because of the insulation of the international financial system from central bank decisions.[16] Consequently, in the early 2000s, lending, interest rates, and inflation all increased at once, abetting the 2007-2008 financial crisis.[17] Taking a schematic view, China’s demand for oil spelt the end of the non-inflationary consistently expansionary (NICE) era that had subsisted since the early 1990s.[18] Whilst American fracking supressed prices in the 2010s, a return to high energy prices in the 2020s (driven more by supply constraints, including Russia’s invasion of Ukraine) has destabilised national economies, increasing the cost of living and constricting public spending.[19]  

II: Decarbonising whilst leading global emissions

Whilst reducing dependency on imported hydrocarbons, China’s renewables drive has also created tensions by putting the United States on the backfoot. In 2021, President Biden came into office with an unprecedented policy agenda favouring decarbonisation. But, lacking a congressional majority, the administration passed its flagship laws by framing them in terms of hostility to China, whilst also reducing subsidy commitments, thereby making successful ‘catch up’ less likely.[20] The Inflation Reduction Act, the first piece of major climate legislation in the United States, carried due to its overtly ‘green protectionist’ stance, entrenching the policy shift which Trump began in 2018, when he imposed steep tariffs on Chinese solar panels to advantage American manufacturers.[21] 

Meanwhile, China’s green energy advantage puts Europe in an awkward position. European states require Chinese technology for the success of their energy transitions, but integration risks inflaming relations with Washington and providing China with geo-economic leverage. Offshore wind is paradigmatic of this tension. As Chinese firms can build the most efficient turbines, they are well-positioned to facilitate Europe’s programme.[22] Yet, in Germany, a turbine supply deal with the Chinese company Mingyang has recently been scrapped in the midst of security concerns. The European Commission is also currently investigating Chinese turbine firms for breaches of competition rules.[23] 

Beyond its destabilising consequences, though, what is most revolutionary about China’s energy trajectory is how it has changed the dynamics of the climate crisis. It has long been known that the burning of coal to fuel China’s growth has significantly driven the hockey-stick shaped acceleration of emissions over the past decades, making policymakers sceptical about the prospects of China aiding carbon neutrality. Indeed, the exemption of China (and India) as non-Annex 1 countries was the overriding reason the United States refused to ratify the Kyoto Protocol of 1997.[24] Even after Xi gave assent to the 2015 Paris Agreement, experts doubted whether China’s green energy build-out would continue, predicting that over-capacity and the influence of the fossil fuel industry would lead regulators to wind back support for wind and solar projects.[25] It was expected that China would have to be cajoled by the wider international community into making further commitments on climate.[26] 

These expectations proved to be sorely misplaced. In 2020, Xi unilaterally committed China to climate neutrality by 2060 in a speech to the UN General Assembly. As central and local government doubled down on subsidies and easing credit, in 2023 and 2024 approaching two thirds of newly installed wind and solar capacity was accounted for by China alone.[27] In 2025, over 50% of new cars sold in China were EVs.[28] 

III: Facing up to change

What does all this mean for European states like the United Kingdom, caught up as they are in both geopolitical competition and the green transition? Most directly, it means policymakers need to focus on building more resilience to energy shocks. In the 2000s, China’s rise showed that the scarcity of hydrocarbons sends destabilising ripples across the world economy. Since the pandemic, price shocks have returned with a vengeance, driving inflation that has damaged standards of living, wrought havoc on public finances and expanded social inequalities. One might think, with the renewed emphasis on energy security in policy discourse, that Europe would have been well-prepared for the energy disruption that the United States’ ongoing interventions in the Middle East have triggered. And yet, European gas reserves are currently at record lows. When the bombing campaign on Iran began, German natural gas inventories were at only 27% of capacity, compared to an average of 64% of capacity for the same time of year since 2023.[29] Two weeks prior, the German economic minister declared this to be no reason for alarm.[30] By way of contrast, Beijing has been accelerating purchases for their strategic reserves for over a year, anticipating disruption to flows from the Middle East.[31] 

Whilst greater resilience to shocks is sorely needed, stockpiling is a limited fix. More crucial is insulating energy sources from geopolitical competition and supply-demand fluctuations. One option is drilling domestically. The Trump administration, the Tony Blair Institute for Global Change and the chief executive of National Gas have all variously called for the UK to expand its North Sea fields in the name of energy security.[32] Notwithstanding environmental implications, expanding fossil fuel production is unlikely to make a sizeable dent in Europe’s energy vulnerability: extracting all proven UK reserves and resources would only meet around 1% of European annual gas demand each year to 2050.[33] The entirety of the EU’s proven reserves, as of 2020, would only meet seven and a half months of oil demand and a year and a half of its gas demand, at 2024 consumption levels.[34] More viable is expanding renewable production and electrification. Electrifying transport and heating systems could halve EU fossil import dependency by 2040; developing new renewable capacity in line with existing 2030 targets would reduce the sensitivity of electricity prices to gas prices by 40% relative to 2024.[35] 

The world that China’s energy revolution has made requires resilience to oil and gas shocks. The benign geopolitical and macro-economic conditions which, in the 1990s, were cast as immutable achievements of globalisation, no longer hold in a multipolar international order. But China’s energy revolution cuts both ways. Europe has a path out of dependence on flows of hydrocarbons by expanding renewables and electrifying. The transition to a green energy order requires integration with China due to its technological leadership, which inevitably carries the geopolitical risks of aggravating the United States and providing Beijing with strategic leverage. These risks might be mitigated more readily than those of retaining fossil fuel dependency. In the case of offshore wind, for instance, regulators are adopting a hybrid approach where Chinese firms set up local factories for blades and towers, whilst shipping core components from China.[36] European policymakers could also shore up strategic vulnerability by, for instance, reciprocating Beijing’s requirement that Western manufacturers relinquish remote control of their China-based turbines.[37]

More broadly, China’s energy revolution forces Western nation-states to reevaluate the extent of their agency in tackling climate change. China is the epicentre of the carbon emissions fuelling the climate crisis, the world-leader in the technologies which promise to reduce them, and both a model and necessary partner for Europe’s drive to carbon neutrality and energy security. Euro-American actors can no longer lead the charge against climatic risk, even if the immense political will required wasn’t lacking. The greatest consumer of fossil fuels in history has, unilaterally, achieved leadership on green energy and appears to be reaching peak emissions, all the while preserving an impressive growth rate.[38] For the global north, at least, China’s energy revolution has made sure the climate crisis is also a knowledge crisis.[39]

Bibliography:

[1] Tooze, 'After Escape: The New Climate Power Politics', e-flux journal, no. 114 (December 2020).

[2] Pomeranz, The Great Divergence: China, Europe and the Making of the Modern World Economy (Princeton University Press, 2000).

[3] Ibid: 16.

[4] Ibid: 63.

[5] Ibid: 26.

[6] Thompson, Disorder: Hard Times in the 21st Century (Oxford University Press, 2022): 16.

[7] IEA, Coal Mid-Year Update 2025 (IEA 2025).

[8] Energy Institute - Statistical Review of World Energy (2025); The Shift Data Portal (2019) – with major processing by Our World in Data.

[9] Yang, Yang, Butler-Sloss and Graham, ‘China Energy Transition Review 2025’ (Ember, 2025).

[10] Kazushi Minami, 'Oil for the Lamps of America? Sino-American Oil Diplomacy, 1973–1979', Diplomatic History, vol. 41, no. 5 (November 2017), pp. 959–984.

[11] Thompson, Disorder, 72, 129-130.

[12] Ibid: 72-74.

[13] Ibid: 78-79, 88.

[14] Thompson, “The Coming Rare Earths War." UnHerd, 14 July 2025.

[15] White, "China to Lean on Russian Oil as Iran Crisis Chokes Supply," Financial Times, 4 March 2026.

[16] Thompson, Disorder, 135-139.

[17] Ibid: 135-139.

[18] Ibid: 136.

[19] Ibid: 276. United Nations, 'Global Impact of War in Ukraine on Food, Energy and Finance Systems' (UN Global Crisis Response Group, 2022).

[20] Tooze, 'Great Power Politics: What was Bidenomics?', London Review of Books, 21 November 2024.

[21] Milman, 'Donald Trump's Tariffs on Solar Panels Threaten Tens of Thousands of Jobs', The Guardian, 24 January 2018.

[22] Meidan and Hove, 'Chinese Participation in Europe's Offshore Wind Sector: The Good, the Bad and the Unknown' (Oxford Institute for Energy Studies, 2025).

[23] Ibid.

[24] Tooze, 'After Escape’.

[25]Shen and Xie, 'The Political Economy for Low-Carbon Energy Transition in China: Towards a New Policy Paradigm?', New Political Economy 23/4 (2018).

[26] Tooze, Shutdown: How Covid Shook the World's Economy (Viking, 2021): 224.

[27] IRENA, Renewable Energy Capacity Highlights 2025 (IRENA, March 2025); author's compilation in Tooze, 'Chartbook 386: How China's Powerslide is Driving the Global Green Electricity Transition', Chartbook, 19 May 2025.

[28] Graham, 'The EV Leapfrog: How Emerging Markets are Driving a Global EV Boom' (Ember, 17 December 2025).

[29] Maguire, 'Europe's Skimpy Gas Storage Under Scrutiny as Qatar Halts LNG Flows', Reuters, 4 March 2026.

[30] Tooze, 'Chartbook 437: Unseasonal War (2): Europe, Gas & Yet Another February War', Chartbook, 5 March 2026.

[31] Meidan, 'The Drivers of China's Crude Buying Binge', OIES Energy Comment (Oxford Institute for Energy Studies, February 2026).

[32] Langengen, 'Why Britain Needs an Energy-Strategy Reset' (Tony Blair Institute for Global Change, 13 February 2026). 'UK Must Increase North Sea Drilling to Boost Economy, Says US Ambassador', Sky News, 3 November 2025. Butterworth, 'UK Needs More Gas Storage Sites as Risk of Energy Shortage Looms', The Times, 23 February 2026.

[33] Lord Deben (Chairman, Climate Change Committee), letter to Kwasi Kwarteng MP on 'Climate Compatibility of New Oil and Gas Fields', 24 February 2022.

[34] Aylett and van Rij, Why Renewables and Electrification Hold the Keys to EU Energy Security (Chatham House, January 2026),

[35] Rosslowe, 'Shockproof: How Electrification Can Strengthen EU Energy Security' (Ember, 16 October 2025). Simon and Anadon, 'Power Price Stability and the Insurance Value of Renewable Technologies', Nature Energy, vol. 10 (2025), pp. 329–341.

[36] Meidan and Hove, ‘Chinese Participation in Europe's Offshore Wind Sector’.

[37] Ibid.

[38] Myllyvirta, 'Analysis: China's CO2 Emissions Have Now Been Flat or Falling for 18 Months', Carbon Brief, 11 November 2025. Dembicki, 'The Convenient Disappearance of Climate Change Denial in China'. Phillips, 'Climate Change a Chinese Hoax? Beijing Gives Donald Trump a Lesson in History', The Guardian, 17 November 2016.

[39] Tooze, 'Electrostates, Petrostates and the New Cold War', LRB Autumn Lecture, New School, New York City, 27 October 2025.